04. 16. 21

This episode features Mike Peluso, Chief Technology Officer at Rectangle Health. Here, Mike discusses the concept of Care Now, Pay later and why patient financing is so important – sharing key insights on how healthcare practices can adopt a payment plan strategy to help patients get the care they need, while practices benefit from steady, recurring cashflow.


Bryan Durman 0:00
Hi everyone, and thank you for tuning in to the Becker’s healthcare podcast series. I am Bryan Durman, senior director, client content and strategy with Becker’s hospital Review.

Today, I’m pleased to be joined by Mike Peluso, Chief Technology Officer of rectangle health. Mike, thanks so much for taking the time.

Mike Peluso 0:17
Thanks, Brian. Good to be here.

Bryan Durman 0:19
Great. So let’s let’s dive in here. The first question I have for you is, you know, we’ve seen a growing number of retailers, retailers of all sizes really, including very large well known retailers embracing buy now pay later options. Is healthcare embracing this in the same way? And if not, what’s the hesitancy about there?

Mike Peluso 0:37
So Brian, interesting question. But buy now pay later has actually existed in health care for years. Orthodontists use it in the dental space, hospitals use it in the large healthcare space, IVF clinics in the IVF space, they may use quite a bit of it. The recent “buy now pay later” surge is more about buying something from a retailer, think Amazon think Best Buy. And then having another third party, break those payments up into a smaller purchase. So you see your extended credit from a third party to buy something at Amazon or Best Buy and that really outlines buy now pay later. Again, healthcare has been doing payment plans for a long time. Buy Now pay later that’s resurgence in retail, really has driven the provider market to say, Hey, wait a minute. We were doing this all along? Is there a reason to do more of it? Now? Is there a reason to have a better process around accepting payment from patients and accepting large payments from patients? Looks like this buy now pay later thing is done for retail – can we do it for healthcare?

And the answer is yes. And it really drives a lot of convenience. And it creates a better patient experience and healthcare and in a patient survey, two out of three have actually said if a provider were to offer something like buy now pay later, or a healthcare provider or a dental practice or a hospital were to offer it, they would actually prefer it. So that I think it’s here, retail has done a really good job of exposing it, but it’s been here all along. And now a lot more folks are gonna start using it. Yeah, yeah, definitely. And I think that the concept that I believe, you know, rectangle is big on is sort of like it’s buy now pay later, but health care now pay later. Can you talk more about that bat concept and why it’s so important to meeting the needs of today’s patients and providers. Yeah, absolutely. Um, again, care now pay later is that buy now pay later model adopted for health care, but but the key word keyword is care. It’s all about care. Again, in buy now pay later, a consumer is buying a TV, right? In care now pay later or in health care. A patient needs care, they have to get care, it’s not optional. It’s it’s, it’s they need a root canal or they need a very expensive procedure. It’s, it’s again, it’s it’s to keep them healthy, it’s to keep them in some cases alive.

So it’s really about that care. And that care, unfortunately, has become very expensive. So the second part of care comes in when we think about providers, providers have to care for their patients. And they care for their patients in a way that not only makes them healthier, but also they care about their patients financial well being. They don’t want their patient to have to go out and get a loan for a root canal. Root canal could be a really expensive procedure. And they don’t want to have to do that, they want them to be healthy. So if you think about care, now pay later, that care is actually two pronged, it’s about receiving care, because patients need to receive care. It’s also about the provider, caring about their patient, and the provider having that relationship with the patient. It’s receiving medical care, and it’s having the ability to pay for it in a different way.

Bryan Durman 4:02
Yeah, I mean, I think you’ve outlined that so clearly like, right like it’s something that the patient absolutely needs. There’s something that’s very expensive, so it requires a different model. But I’m curious then, though, does embracing care now pay later require health systems and providers to make significant changes to their business model?

Mike Peluso 4:21
I don’t think it changes the model. It really doesn’t. Providers still need to provide care and patients still need to get care. That’s the business of healthcare. And that’s where healthcare is a lot different than retail because retail is sort of centered around profitability. Retail is centered around revenue. Healthcare is centered around driving care. I will say though, if it doesn’t change the business model, and it actually enhances it, and enhances it in two ways. The first way is it’ll actually allow more access to care. And that’s really a hot topic in the United States healthcare system is people need care and they want to go to the public.

But there’s sort of this, this cost element that sometimes prohibits them. Care now pay later will actually allow them to access more care, again – $1,000 procedure, “I really don’t want to do it, I keep putting it off, I keep putting it off, oh, well, $1,000 procedure at 250 a month for four months, well, I can do that”. So, it really allows access to care. The other part that it does is it actually, for providers for physician offices, for dentists for hospitals, you name it, it, it actually allows them to have more reliability, when it comes to patient payment. Today, when a patient goes to a hospital, or when a patient goes to a provider office, it’s kind of the patient walks in and they receive care, and then they kind of leave that provider, it isn’t necessarily guaranteed payment, they’re going to send that patient a bill in the mail and it kind of hope for the best with with care now pay later with this sort of new model. And again, it’s not all that different. They can see the patient but they can know that they’re going to get that payment over time, and they’re going to get that payment in chunks from patients and once you get a terminal velocity of patients pay every single month, it really becomes a consistent sort of way to run your business. So I don’t think it changes the model. I think it enhances the model quite a bit.

Bryan Durman 6:22
Gotcha, gotcha. And then, you know, it sounds like you’re sort of making the case, right, that patients would consider leaving their current provider for another to gain access to payment plans. Is that sort of what you’re laying out here?

Mike Peluso 6:38
In some cases, I could agree with that, that a patient would go elsewhere. 43% of patients surveyed actually said they would go somewhere if there was payment plan capability or patient financing capability or, or digital payment type capabilities. But But I’m also a strong believer, you know, that provider patient loyalty is really hard to break, I love my dentist, a lot of people love their dentist, a lot of people love their their primary care provider, their pediatrician, you know, we would never think of going to another pediatrician in my family. So in those cases, I think it’s about that provider, then offering these types of tools, offering these types of dude digital access, and really using it as a way to enhance that loyalty and also retain their patients. I I agree some patients may go elsewhere. But I also like to say that there’s a lot of loyalty between a provider and a patient. And these digital tools and things like carrying out pay later should be used to support that loyalty.

Bryan Durman 7:42
Yeah, that makes a lot of sense. Do you have any tips for healthcare leaders perhaps preparing to adopt care now pay later? or different payment plans strategy? What tips would you give to folks who are probably early on in this journey?

Mike Peluso 7:57
Yeah, I would say look at the folks that have been doing it for a really long time. And I’ll pick on an orthodontist for a little while, you know, a braces was a very expensive procedure. It’s always been a very expensive procedure. So, you know, 1020 years ago, an Orthodontist said, Well, how do I continue to get patients in the door? And how do I continue to make nice straight teeth for my patients and sort of a light bulb went off for them. And this was years ago, I’m going to put focus on payment plans. I’m going to allow them to extend the payment out over time. And it’s really thriving in the orthodontist business and a lot of people wouldn’t go to an orthodontist that didn’t offer it, and there really are orthodontists that don’t offer it. Now, with the rising cost of healthcare and how so many people have, you know, $1,000 deductibles, a high dollar coinsurance is, it’s now almost necessary for all of healthcare to do what those orthodontists are doing so, my advice to providers is, this definitely works. It’s been done in, in various portions of healthcare, various portions of medical or dentistry for four years. Now that the high costs have hit just about the rest of healthcare, now it’s time for the rest of healthcare to adopt the same principle.

Bryan Durman 9:18
Makes a lot of sense. Mike, it’s been a pleasure speaking with you. Do you have any closing comments for our listeners today?

Mike Peluso 9:24
Yeah, I think it goes back to sort of one of the earlier questions. Again, it is all about care. As a provider, you want to deliver care, but you also want to care about your patients and care now pays later allows you to do that. Any digital payment function allows you to do that. It allows you to have a better relationship with your patient. The other thing to remember is this isn’t the only option. You don’t have to do just a payment plan or carrying out pay later. You can get a discount. You can do a payment plan that possibly aligns with that patient’s FSA HSA

You could you could even do, I know I spoke about him, you could even do bring in third parties to help with patient financing. There’s a myriad of things you can do. But the idea is making more about the care you as a provider, want to care for your patients, you want to deliver that care to your patients. So I think if we, we keep the patient in mind, and we keep the care in mind, and we do as much as we can to facilitate those two items. It’ll work out for the best for the provider.

Bryan Durman 10:29
Yeah, no, it just sounds like, you know, this financial experience is really a part of care. Right. It is, it is encompassed in the same thing, correct?

Mike Peluso 10:38
Yep. Absolutely.

Bryan Durman 10:40
Well, Mike, thank you so much for your time. It was a pleasure speaking with you.

Mike Peluso 10:44
Awesome, thank you.

Bryan Durman 10:46
I’d also like to thank rectangle health for sponsoring this episode. listeners. You can tune into more podcasts from Becker’s healthcare by visiting our podcast page at Becker’s hospital review.com

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