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Zero-Interest Loans: Are They Right for Your Hospital?

Zero-Interest Loans: Are They Right For Your Hospital?

Payment plans are a great option to allow your patients to pay their bills over an extended period of time. We here at The Midland Group have long advocated the benefits of giving your self-pay patients an interest-free payment option to incentivize them to pay. This, of course, has always been done over a short-term period but more and more hospitals are offering zero-interest loans to their patients. Are they right for your hospital?

Why Zero-Interest Loans?

Typically, charging interest on payment plans incentivizes patients to pay their medical bills off faster. This may not always be the case, however. When patients can make their payments on time, accruing more interest, making payments becomes more frightening.  This can scare many patients into skipping out on the rest of their payments.

Zero-interest loans can be just as successful, if not more so. No interest is less frightening to patients, taking the worry out of the process. The total of their bills is the amount they will be paying over their payment period, nothing more.

Zero-Interest Loans Help All Patients

While self-pay patients are the ones who most frequently struggle with paying off their medical bills, even those who have insurance can experience difficulties as well. These days, there is an increased prevalence of high-deductible plans, with the thought process that if patients have these pans, they will pay more attention to their medical bills.

Higher deductible plans, which are often marketed as “premium” plans, have led many patients into a false sense of security, though. When it comes time to pay the high cost of that deductible, insured patients are often unable to afford the total cost in one payment. This makes zero-interest loans attractive not only to self-pay patients, but to insured patients as well, and they can greatly help any who require more time to pay.

Partnering with a Third Party

Partnering with a third party vendor to offer zero-interest loans can also be of great assistance. In doing so, your hospital can receive some of the money up front. The vendor makes money off of this relationship as well, but even so, it can still be very beneficial. Zero-interest loan payment plans incentivize patients that might otherwise have gone into bad debt to pay their medical expenses. Thus, hospitals can now collect on that debt.

One important thing to keep in mind, though, is to communicate with your patients that you offer zero-interest loans. Many times patients don’t know that this type of plan is available. They should be made known, and it should be clear that the hospital is associated with the plan.

Increased Patient Satisfaction

Zero-interest loans not only help you get paid, but they also help your reputation. This type of payment plan eases the financial burden of patients, making their lives much easier. Their satisfaction is greatly increased and you are much more likely to create patient loyalty. Satisfied patients can also help you generate new business, because happy patients will recommend your hospital to their friends and family.


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