Flipping The Script: Care Now, Pay Later (CNPL) Does For Doctors What BNPL Did For Retailers

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The idea of spreading payments over time is not new in healthcare — certain practitioners, such as orthodontists, have successfully offered buy now, pay later (BNPL)-like plans for 20 years. But the idea has not been widely adopted across the healthcare industry. That is starting to change, though, according to Rectangle Health Chief Technology Officer Mike Peluso, as more healthcare practices are seeing the mutual benefits of offering this type of option — only with a slight modification.

“I don’t like to use the words ‘buy now, pay later.’ I like to use the words ‘care now, pay over time’ or ‘care now, pay later,’” Peluso said in a recent chat with PYMNTS. “Receiving care and paying for it over time has been in healthcare for years.”

By any name, Peluso said, patient financing of expensive procedures is a payment practice whose time has come. Because as much as BNPL programs have taken the credit industry by storm and injected much-needed purchasing confidence into retail, meeting the need for healthcare is vastly different from enabling the commercial desire to buy material items, he noted.

“[Healthcare] is not even a ‘want,’” he said. “We all want to buy a new TV. We all want to buy a new cell phone. But you need care. You need a colonoscopy. You need braces.” Simplicity in BNPL-style arrangements will make them winners for healthcare providers and patients, he stated.

Peluso explained that financial institutions (FIs) may come into healthcare to offer the “true buy now, pay later that you see elsewhere, but it doesn’t have that patient-friendly experience.” The true win will be in patient financing with care.

Research Shows Patients Want the Option

The recent Healthcare Payment Experience study of 2,000 patients conducted by PYMNTS and Rectangle Health showed that 63 percent of consumers had an extraordinary interest in healthcare payment plans, but less than half were actually offered plans — even though nearly one in five patients said they experienced financial hardship from medical bills. With those findings in mind, Peluso said Rectangle Health is determined to close the gap between what patients want and what practices are offering.

“It’s really about adoption,” he said. “When a patient goes to an office or interacts with a medical office website, there is no reference to payment plans. There’s no reference to how to use them. There’s no reference to how to set them up there. It’s sort of a blank idea in healthcare.”

Simply enabling an office manager to convert a $1,000 bill into 10 payments of $100 — without going through banks or credit checks — or doing something similar online will produce better outcomes for both sides.

“Everybody wants it. It’s just not served up in a great way for everybody to use it,” Peluso said, noting that the “second hurdle” is to get offices to see the benefits and understand how CNPL works, and then actually launch it. “Having things like payment plans is very beneficial to the office and to the patient,” he said. “They’re beneficial to the office because they create a consistent cash flow, and they’re beneficial to the patient because they [allow them] to receive care now and pay for it over time.”

 A Big Benefit of Going Contactless

Clearly, smooth and predictable cash flow is what every business wants, and when the source also improves the customer or patient experience, it’s a win-win. According to the PYMNTS-Rectangle Health study, bad digital experiences were shown to threaten as much as 10 percent of overall provider revenue, and could lead to costly levels of dissatisfaction.

“I think the solution is offering as many payment options as possible for those patients,” Peluso said — including the ability to make payments over time and to pay via text or online, in addition to in-person. “Making it available everywhere to those patients is going to create a better experience and make those patients want to come back.”

There’s also the dual benefit that contactless payments bring to practice management in the form of greater automation and efficiency. “The thing to remember about contactless is that it’s not just touch-free — it’s also a lot more automated,” Peluso said. “If I can make it so you can enter all your data on your phone or from your house, I’ve not only made it contactless or touch-free, but I’ve also automated the process. I’ve removed the manual procedure.”

As much as COVID has presented the healthcare industry with unmatched challenges, it has also made practices become more efficient. Whether that means less time sitting in waiting rooms or searching for credit cards at checkout, these now-normalized automations and efficiencies allow practitioners to focus on what they do best.

“All of this functionality around payments and automation will make [providing good, safe care to patients] easier to do, so the revenue cycle becomes more efficient,” noted Peluso.

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NEW PYMNTS DATA: BUY NOW, PAY LATER CONSUMER STUDY 

About: Buy Now, Pay Later: Millennials And The Shifting Dynamics Of Online Credit, a PYMNTS and PayPal collaboration, examines the demand for new flexible credit options as well as how consumers, especially those in the millennial demographic, are paying online. The study is based on two surveys, totaling nearly 15,000 U.S. consumers.

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