The Benefits of Third-Party Financing

Choosing between unexpected health care expenses for a pet or ending that pet’s life is never easy. But pet health care costs are not trivial, and many owners do ultimately decide on economic euthanasia. This decision is difficult for both the pet owner and the practice team, particularly in light of the increasing medical and technological advances that make veterinary diagnosis and treatment more accurate and effective than ever before.

Veterinary Medicine Is a Business

The fact is that veterinary practices simply cannot afford to treat every pet whose owners do not have the funds to pay. Extending credit or offering payment plans through the practice is becoming less and less common, largely because practices are unwilling to take on the risk.

But other, less risky options are available for practices that want to offer clients some way to alleviate the sticker shock of pet health care. The benefits of all these options are twofold: pet owners can afford the care their pets need and veterinarians can focus on delivering the best possible care.

Here we explore third-party credit cards, payment plans and loans, which are welcome alternatives for many pet owners who do not have cash or credit available to them. Many of these companies offer brochures and online advertising displays to help practices educate their clients about these offerings.

Credit Cards

Private-label credit cards are offered by such companies as CareCredit, Wells Fargo and Citibank. Many pet owners are already familiar with these types of cards because they are also used to finance human health care, such as dental, vision and other services. The practice must be enrolled for clients to apply for the card.

CareCredit, for example, is a credit card with a revolving line of credit that can be used repeatedly to pay at any location within CareCredit’s network of enrolled providers. There are two basic financing options:

• Pet owners spending more than $200 pay no interest if the debt is paid in full within 6, 12, 18 or 24 months.
• If a longer term is needed, the client has fixed monthly payments for terms of 24, 36, 48 or 60 months until the debt is paid.

Clients can apply quickly and easily, and credit decisions are usually made instantly. Once the application is approved, the cardholder can use the card at the practice multiple times as long as the purchases are within the approved limit.

The approval rate for third-party credit cards is often higher than for typical credit cards. Clients who are not approved are likely a poor credit risk.

Payment Plans and Loans

Other common options for third-party financing include payment plans and loans. Companies that offer pet owner payment plans include Vetary, CareCap, VetBilling.com, and Wellfund. Loans can be obtained from companies such as Scratch, PetLoans.com, MedicalFinancing.com, and LoanHero.

Payment terms and APR vary among lenders; some require automatic withdrawal from the client’s bank account. Processing and convenience fees are often, although not always, paid by the borrower. Most of these companies do not require the practice to pay startup or subscription fees; others require the practice to pay a fee with each transaction. On the plus side for the practice, there are often no associated administrative tasks and the practice receives payment in full as soon as the service is rendered.

In most cases, in order for clients to take advantage of these offerings, the practice needs to be signed up as a partner. Once the practice is enrolled, clients can begin to borrow. In some cases the practice has the final say in whether to approve a client.

A Win-Win

Clients who can’t afford to provide adequate care for their pets hurt your bottom line. Because you both want what’s best for the pet, it behooves practices to offer clients third-party payment options as an alternative to shelling out hundreds or even thousands of dollars at one time. Practices that offer these financing options are able to focus their efforts on delivering care, not on whether clients can afford that care. Not only does the practice bring in more revenue because clients are able to pay for more and better care, but client retention and loyalty increase and health outcomes for patients improve.

Maureen McKinney, associate editorial director of Veterinarian’s Money Digest^TM and American Veterinarian^®, has written for HealthyPet magazine, vetstreet.com and the children’s magazine Animal Tales.