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Patient loan program supports expansion, increases staff efficiency

April York, Senior Director of Patient Financial Services, Novant Health
Craig Webster, Chief Information Officer, ClearBalance

It’s no secret that high-deductible health plans have drastically altered the reimbursement landscape. Essentially, we operate in a two-payer world. Centers for Medicare & Medicaid Services and private payers represent one arm of collections, while increasingly patients are a secondary – and critical – payer arm themselves. Revenue cycle processes should tune revenue cycle workflows to engage patients in financial counseling up front so they understand their portion of the care cost and the financing options available.

A few years ago, Novant Health, which is a multi-state integrated delivery network, needed to combat the upswing in high deductible health plans (HDHPs) that ultimately transfer more financial burden to consumers. Novant Health has seen an increase in patients with HDHPs for more than six years. Today, it’s not unusual for patients to have $5,000 to $10,000 deductibles.

As part of the solution, we converted in 2013 from an internal interest-bearing loan program to a zero-interest loan program offered by our vendor partner. As a result, we’ve improved patient satisfaction and cash collections. Novant Health reduced its recourse rate from 32 percent to an ongoing average of 9.6 percent, decreased payment plan collection costs by 20 percent and improved patient cash collections 15 percent as a result of cash acceleration. The loan offering is a component of Novant Health’s overall patient financing strategy that includes price estimates and transparency along with a consolidated patient bill.

To help patients prepare for their financial obligations, Novant Health’s pre-service and admissions team informs them of anticipated charges and when appropriate, explains the zero-interest loan program. The loan program enables financial counselors to elevate their conversation and offer patients reasonable payment options. By outsourcing long-term patient financing to a third-party, Novant Health’s revenue cycle staff can concentrate on the core business. This has been critical as Novant Health has increased its service area – and shared services offering – from the Carolinas into Virginia and Georgia.

Another consideration was the underlying technology platform of the financing service itself. Behind the scenes, it was important that the solution could grow as Novant Health expanded its market reach and work seamlessly with the existing electronic health record and financial solution system – both for the hospital and medical groups. The loan servicing platform works with Novant Health’s systems to manage account submissions, transactions, and reconciliation along with cash postings and billing indicators.

The zero-interest loan program eases financial conversations with patients and offers additional patient benefits. For example, the loan program’s web portal allows Novant Health financial counselors to be alerted if patients already have loans. If so, patients’ cost for the new care procedure can be added to their existing balances. Also, the loan program IT platform features a payment calculator that enables staff to inform patients of expected monthly payments. The calculator is customized so financial counselors have flexibility to set reasonable monthly payments within Novant Health’s payment guidelines. At minimum, a patient pays $25 per month for 60 months or less. This can be overridden with leader approval and based on circumstance.

The loan-servicing platform has a consumer identification functionality, which helps speed patient identification processes. This eliminates the need to use credit reports to verify individuals’ identities, a patient-friendly convenience.

The zero-interest loan program complements Novant Health’s larger consumer strategy of “making healthcare remarkable” with outreach to help patients understand what they owe and offering patients the flexibility to make their own choices about payment options and repayment methods. Patients have access to the loan program’s payment portal, which conforms to consumer expectations, such as 24-hour access to make payments and view their account information online.


The zero-interest payment program has been an important factor in helping Novant Health improve efficiency, overall patient pay recovery, and patient satisfaction. And it has the added benefit of enabling Novant Health to remain competitive and attractive to consumers who are evaluating hospitals based on cost, quality, and convenience. Novant Health has experienced positive results for patient loyalty: 92 percent of the health system’s patients are likely to return because of the zero-interest loan program and 86 percent will recommend Novant Health to family and friends.

Lessons learned

  • Leveage Vendor partnerships by insourcing what you do best and outsourcing what vendors do best.
  • Encourage collaboration – internally and among vendor partners.
  • Ensure continuous improvement for the revenue cycle such as considering how bundled payments impact workflow and net reimbursement.
  • Identify and quantify patient segments in partnership with marketing to design a communication strategy that meets the needs of a diverse patient population.
  • Continue to look for opportunities to drive patients to lower cost care options at the point of scheduling. Give the patient choice.
  • Adapt business practices to the new environment… rapidly.
  • Embrace the risk your patients are experiencing. 
  • Risk is increasingly being shifted to the least sophisticated purchaser of services; providers must own the responsibility for education