Unlocking Healthcare Growth: How the Right Banking Partner Can Power Healthcare Financing

Elective medical procedures represent a massive market for healthcare providers – in the U.S., the elective medical procedure market was valued at $62 billion in 2022 and is projected to reach $120 billion by 2030. Procedures such as orthodontia, veneers, LASIK, and joint replacements drive bottom lines for healthcare providers, and providing financing options presents an opportunity to unlock further growth by making elective surgeries more affordable.

Studies have shown that nearly 10% of consumers considered elective care but opted out of it because of affordability, representing significant missed profits for healthcare providers. By embedding financing solutions into providers' existing workflow processes, they can make elective surgeries more readily affordable, improving both their own bottom line and their patients’ health, a true win-win scenario.

The need for healthcare financing options is clear, but working with a banking partner to provide these financing options is ultimately what will allow providers to unlock growth and ensure their financing solution is working to its fullest potential. By turning over the responsibility for financing to a financial institution or fintech, providers can alleviate the cash flow challenges and administrative burdens that come with complex billing cycles, delayed payments, and payment collections.

How Healthcare Financing Can Unlock Growth

The immediate bottom line benefits of healthcare financing are clear: more patients will choose to undergo elective medical procedures if the upfront cost is more affordable. Offering financing plans will allow providers to tap into the aforementioned 10% of consumers who consider elective procedures but ultimately opt out because of cost concerns.

The benefits of embedded financing solutions go well beyond getting more patients to go through with elective procedures, though. Eliminating the need to wait for full payment is perhaps the biggest benefit for providers who work with a financing partner. By receiving payment upfront from its financing partner, instead of having to wait for the patient to pay in installments or out of pocket, healthcare providers can accelerate their cashflow and kickstart business growth in the process.

There are back-end advantages to working with a financing partner as well – namely, reducing billing-related administrative costs that bog providers down. Approximately half of provider administration costs can be attributed to billing processes, adding up to billions of dollars spent on billing on an annual basis. Research shows that hospitals who turn over responsibility for financing to a banking partner saw these billing-related costs drop to just 12% of expenditures, freeing up additional funds for the business and allowing administrators to do their jobs more efficiently.

It’s clear that offering financing, particularly through a sponsor bank and fintech platform, pays dividends for healthcare providers: not only does it allow them to access more money upfront with access to the full payment, but it also reduces billing-related administrative costs. The growth potential is great, but providers need to know what makes a good banking partner to fully capitalize on financing offerings.

What Makes a Good Healthcare Financing Partner?

Sponsor banks provide the infrastructure, regulatory compliance oversight, and capital that power modern healthcare lending solutions – so being able to identify a good banking partner is critical for healthcare providers, or fintechs looking to serve providers.

For starters, experience is key: providers and fintechs should work with banking partners that have a dedicated team with a track record in partnering with healthcare finance companies. This track record shows a commitment to healthcare lending, making it more likely that the bank will understand and support the practice in years to come. In addition, because sponsor banks are responsible for maintaining regulatory compliance oversight of the fintech and its providers, an experienced team is more likely to be able to navigate healthcare financing regulations and remain compliant, ensuring a smooth partnership in the process.

Providers and fintechs should also seek out banking partners that deliver competitive, customer-friendly financing solutions. This begins with embedding financing at the point of sale. One study found that just 6.5% of patients would call back about a financing plan after they’ve received a bill, so working with a bank that can offer payment plans before or at the time services are rendered is critical. Additionally, providers and fintechs should target bank partners that can offer competitive interest rates and monthly payments that are adjusted to the financial budgets of each individual.

Finally (and most importantly), a great sponsor bank will take a personalized approach, creating tailored solutions that address customers’ unique needs. For providers and fintechs, a bank that takes a one-size-fits-all approach to healthcare financing should be considered a red flag: if the bank doesn’t take the time to understand what the fintech, the practice and its customers need, financing offerings will likely fall short.

Sponsor Banks: The Key to Scalable Healthcare Financing

By partnering with a sponsor bank, fintechs and healthcare providers can expand access to financing while mitigating risk. Choosing the right sponsor bank ensures scalable, compliant, and patient-friendly financing options that drive provider success.

A great banking partner fosters innovation in patient financing, ultimately driving growth for healthcare organizations. As an institution purpose-built for sponsor banking, Hatch Bank empowers partners to thrive by providing specialized, tailored financial solutions, deep industry expertise, and collaborative partnerships. Hatch’s partnership with HFD exemplifies our approach to healthcare financing: by providing flexible, patient-first financing, we’ve enabled leading healthcare providers such as Bosley and DECA Dental Group to further grow their operations .

Interested in learning more about how our team’s deep healthcare financing expertise can kickstart your business’s growth? Contact us here.

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