Buyer's Guide to Patient Financing

We understand that patient financing is just a small part of your day. You'd like to make an informed decision in as little time as possible; we'd like to help.

How It Works

Patient financing really isn't rocket science. Practices refer patients. Patients apply and get approved. Loan documents get printed and signed. We send you your money. You move forward with treatment. Pretty simple. As with most things in life, the devil is in the details!

• Presenting payment options
  The design of your payment options and the way they are presented is the single biggest factor that determines your success in efficiently collecting the revenue for your practice. Springstone℠ offers detailed advice and explanations about the best ways to design payment options. Staff can tap into verbal skills training in Springstone's Education Center, so they can be comfortable and confident discussing payment options with patients.
• The application process
  Springstone offers a convenient online process for your staff and patients. Applications, loan status, fee confirmation, and printing loan documents can all be handled through the secure log-in area of the website. Applications can also be taken by phone when it's more convenient for you.
• Fee confirmation
  Your staff can confirm treatment fees with a click of the mouse via the new Practice Center screen in the secure practice log-in area of the Springstone website.
• Printing loan documents
  Documents can be printed via the Practice Center screen of the Springstone website. Patients can also print their own loan documents, sign them and return them directly to Springstone if the practice prefers.
• Receiving payment
  Once your staff has printed the patient's loan documents, the patient signs them and they are faxed back to Springstone. Payment is completed by direct deposit in 24-48 hours. You can see up-to-the-minute status as to whether a loan has funded on the Practice Center screen on the website. Also you receive an e-mail with detailed information on each transaction so accounting is never a concern.

The Downside of Interest-Free Financing

Is interest-free financing a good deal for your practice? On the surface it might appear to be. Staff like offering it because it's easy to talk about. Interest-free financing is a form of promotional financing, (i.e. you are paying extra so the patient gets a deal they could never get if you were not subsidizing it). Unfortunately, interest-free financing is not always a good deal for patients or practices.

"Why are we doing this anyway?" You offer patient financing to make treatment more affordable, right? So it is important that the monthly payments for patient financing options are low enough to be considered affordable.

With relatively short terms (3, 6, 12 and 18 months), interest free isn't affordable for many patients. For case fees up to about $3600, 18-month financing can provide affordable monthly payments (about $200 per month). That is if you are willing to pay the 13-14% administrative fees! If you want to lower your administrative fees by drawing the line at 12 months or 6 months, monthly payments become much less affordable, defeating the original purpose of the financing.

Impact on word of mouth referrals - The more subtle problem is that if your patients are ever late with a payment or only pay the amount shown on their monthly statements, they won't pay off the loan balance by the end of the interest-free period. Bang! Retroactive interest back to day one at 23% or more! (It costs how much?!)

As they say, there is no free lunch. All financing has a cost associated with it. Guess who foots the bill for interest-free financing? You do! Administrative fees typically run 9.9% for 12 months. And 13% or more for 18 months! That's a lot more than non-promotional financing.

Who chooses this option? If you think about it, you know who often chooses the no-interest option. Your cash patients! Makes sense, right, since the monthly payments are typically so high? Patients who would have been happy to pay by credit card (with less than 2% fee) now cost you 9.9% or more. Are they really coming to your practice because of interest-free financing? If not, why pay so high a fee?

Springstone offers attractive, traditional financing (rates as low as 5.99%). There are no promotional rates to lure your cash patients in. And the administrative fees are a lot lower (7.5% or less).

With Springstone, patients win by getting low monthly payments at low fixed rates that fit their budget. Practices win by providing true affordability to increase case acceptance. You don't have to worry about your "cash patients" using financing when they have the cash. Why would they pay interest when they don't have to? You only pay administrative fees for the patients who don't have the cash and might not go forward with treatment without this option.

What 1.9% Financing Really Costs You

Promotional teaser rates, such as 1.9% are another patient financing product that might not be so good for your practice. Again, you are subsidizing the rate for your patients, but who is benefiting?

Does 1.9% financing increase case acceptance by providing greater affordability? Well, it depends on who can qualify for it. The truth is, not many of your patients can qualify for 1.9% financing. Only those with near perfect credit—about 5% of the population and guess what? They have the cash to pay you and could just as easily pay by credit card for an admin fee of less than 2%. So who benefits from 1.9%? Well the patient finance company of course. They get to grab a few of your cash patients for an admin fee 5 to 6% higher than you needed to pay. And these patients were already going to accept treatment--they have the money.

Springstone offers low fixed rates starting at 5.99%. Very attractive rates to encourage patients to accept treatment, but not low enough to lure your cash patients into costing you unnecessary administrative fees. That is the Springstone partnership approach: win-win.

Patient-Customized Rates

When fixed-rate patient financing was introduced in the early 90s, rates were solely based on the term the patient chose. This was simple to present, but meant that patients with a range of credit histories who chose the same term, say 36 months, all got the same rate and the same monthly payment. In actuality, those with the best credit scores were subsidizing those with poorer scores--not the ideal system.

Springstone can now give each patient a customized rate based on the term they select and their specific credit rating. It actually helps approve more patients, and it gives everyone the lowest rate for their credit worthiness.

Why Loan Size Matters

Many loan processing costs are fixed. While there are some additional risks with a larger unsecured loan, it doesn't cost twice as much to process a $10,000 loan as a $5,000 loan. So why pay twice as much? Springstone gives practices a discount for larger loans. How's that for refreshing?