Why You Should Outsource Patient Financing

By Michael Wong, M.D.

Disclosure:  Michael Wong is a cofounder of Walnut. Walnut is a modern and ethical option for providers looking to offer patient financing. Find out more at hellowalnut.com 

In my last article, I highlighted all the amazing reasons why it is crucial for a medical or dental practice to offer patient financing. However, this still leaves many questions left unanswered. 

For example, you may wonder if you can just offer patient financing in-house and take care of the collections yourself. This is a route that many providers take. There are some clear advantages to this strategy. Mainly, it offers full control of the terms as well as who gets approved for a payment plan. 

But there are also some major drawbacks as well, which can actually raise your overhead or lower your revenue. That would be undoing all the great benefits of patient financing! Luckily, some of these can be mitigated with outsourcing. There are many options including Walnut, Care Credit, United Medical, Prosper, etc. But instead of looking at each one specifically, let’s broadly see how outsourcing your patient financing can help.

More efficient revenue cycle

When you offer your own payment plans, you bear the responsibility of the debt. This isn’t ideal when up to 40%of self-pay accounts become delinquent. Even if the patient pays on time, having a long payment term is inefficient. While your practice waits, you are making no interest on any of the debt. Meanwhile, overhead costs, (rent, payroll, equipment, etc.) continue to add up. 

By trying to do right by your patients, you can accidentally put your practice in a cash crunch. If you outsource financing to a company that pays you upfront, you can provide all the benefits while reducing your accounts receivable and increasing cash flow.

Better patient satisfaction 

We know how cut-throat private practice can be. You want to stay on your patient’s good side both from a professional and medical standpoint, and to maintain a great public brand. One bad review can really hurt. Your relationship with the patient can quickly be strained if they have to receive phone calls from your office staff reminding them of their outstanding balance. 

This puts providers on a tightrope - having to balance patient satisfaction and debt collection. By outsourcing your financing, you let another company take that responsibility. This puts you favorably back in the patient’s corner.

Note: Be careful of what financing option you offer! For example, CareCredit was hit with a class action lawsuit for their lending practices. Offering a poor choice may be worse than not offering one at all!

Better marketing

We had previously demonstrated that patients not only look for financing, but they expect it. Third-party financing can be a great marketing tool. By offering your patients a better option, with special financing promotions, you get a leg-up on your competitors. However, the opposite can be true! If your competitors offer great financing and you don’t, your patients may be more likely to switch to that practice.

Less legal headache

While it may seem simple to just offer a payment plan to your patients, there are actually many local and state regulations governing lending! If that isn’t enough, these compliance requirements vary state by state. Oh, and they do change year-to-year without much notice.

If that sounds exhausting, I don’t blame you. By outsourcing, you can leave the legal jargon and return your focus back to your patients. 

Better staff utilization

Be kind to your office staff and office manager! They don’t like chasing down patients any more than patients like getting harrassed. By removing your office from the financial burden of financing, they are free to focus on more effective and productive tasks. 

In addition, many financing options have dedicated customer service teams - saving you and your office from a barrage of emails or phone calls at all hours of the day.


Every practice and patient base is different. Feel free to experiment with your own in-house financing vs outsourced. Hopefully this article provides some more insight on the latter. Ultimately, you will have to weigh the pros and cons and decide what is best for your office. Good luck!


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