From the first glance at this innovative mobile payment solution, one can quickly recognize the disruptive force this platform would have in the payments space. No one can disagree that Square carved out a unique niche market by successfully eliminating the friction traditionally found in accepting payments. The model worked perfectly in markets traditionally underserved, but what about Healthcare?
Is Square the best Healthcare Payment Solution for Therapists?
Before answering that question, let’s first look at precisely how Square disrupted payments:
- Square made the process of onboarding new accounts very simple and even eliminated the need for personal info and credit checks. This was critical for seasonal merchants or people with bad credit.
- Square didn’t charge for the hardware for accepting payments and turned smartphones into credit card terminals.
- Square streamlined pricing, and eliminated many of the erroneous fees typically found from merchant processors; Monthly fee, PCI fees, Assessment fees, etc.
- Square made the process of accepting credit cards intuitive and easy
The original market for Square were merchants that found it difficult or expensive to accept payments. Early adoptors were the Farmers Market vendors, Appearal at concerts and Artists selling their creations. Over time though, the Square model has infiltrated many industries and has become the defacto leader for places like Coffee Shops and small boutiques.
But what about Healthcare Providers? To explore this question, I’ve interviewed hundreds of Private practice owners, as well as experts in the field of building successful medical practices. The first, Author Paul Potter, Author of “Cash Therapy Practice: Professional Freedom in the New Healthcare Economy”. The second, Dr Joe Simon, Author of “Private Practice MBA; The Rise of the Medpreneur”. The results were astounding, and unanimous.
Following are some of the key variables that answer the question, “Is Square the best healthcare payment solution for therapists?”
- Pricing: Based on actual data gathered from over 500 medical practices, Over 60% of all Healthcare transactions are paid by a Debit card, either linked to a personal checking account, or a HSA/FSA account. Traditional merchant processors will charge less than 1% for that transaction. Compared to Square’s flat rate pricing of 2.75%, a medical provider processing $15,000 per month in total volume, with 60% of that processed via a traditional Debit card, will yield a cost savings of $157.00 per month or greater!
- Pricing Continued. The remaining 40% of Healthcare transactions are typically consumer credit cards, with traditional merchants charging around 2.00%. Compare that to Square’s 2.75% and you can quickly calculate the advantage of a traditional account over Square.
- Hardware: Perhaps due to Square’s lead, or the competitive landscape of payment processing in general, most processors are now offering free equipment with merchant accounts. But, beware of contractual terms that lock you in to a term with penalties for leaving early. These are ugly realities in payments, so it is important to read your contract and understand what you are signing. Reputable Healthcare payment providers offer free hardware with no termination penalties.
- Healthcare Payment Solutions: With rising patient responsibilities, medical providers are looking for intuitive methods for managing payment acceptance and collect from their patients. For Cash Based Therapists, no show rates and cancelations are increasingly being tied directly to an individuals ability to pay their medical bills. Offering a flexible payment plan, or extending the payment beyond the term of care, helps patients manage the costs and get the much needed therapy.
- Payment Plans – Another proven method for capturing payment from patients is securely storing credit card data for future patient responsibility. Combined with a clear financial agreement, as well as a payment solution that encrypts and tokenizes credit card data, storing card data for any remaining patient balance is proven to be the quickest and most effective way to capture remaining patient responsibility.
- Online BillPay – Enabling patients with the ability to pay their medical bills on your website is proven to increase patient collections and decrease time spent by staff in processing payments, or returning phone calls from patients wishing to pay their bills. Think about it, when you open your mail and are ready to pay your medical bills, it is typically after hours. Enabling this self-service function will drastically increase patient satisfaction and increase collections.
- Are you seriously going to hand over your phone?!? Let’s face it, handing your phone over to process payments is not professional. Period.
While Square may be an extremely effective payment tool for many merchants, medical providers have specific needs that are simply not covered. Improvement in collections, and enabling your patients to pay their medical bill on their terms, whether that’s at the time of service, on a payment plan, deferred payments or on your website, will yield happier patients and better outcomes. These are all proven methods that improve the quality of care provided at your office.
To learn more best practices in Healthcare Payment Solutions for Therapists, and how a healthcare specific payment solution could help your private practice, Sign up for a demo today!