Healthcare financing
I. What is healthcare financing?
Healthcare financing encompasses both patient financing (helping consumers pay for medical expenses) and provider financing (helping healthcare organizations fund operations and growth). The market addresses a significant affordability crisis with roughly 100 million Americans that carry healthcare debt, creating demand for financing solutions that work differently than general consumer lending.
The regulatory complexity runs deeper, reimbursement cycles create unique cash flow challenges, and point-of-sale decisioning happens in medical offices rather than bank branches.
II. What makes patient financing operationally complex?
Point-of-sale decisioning creates unique operational pressure. Patients apply for financing during check-in or checkout, expecting instant approval decisions while standing at the reception desk. This requires real-time underwriting automation and APIs integrated directly into medical practice management systems. Modern solutions like Loan on Card can provision funds instantly to mobile wallets at the point of sale.
For specialized treatments like fertility care, where costs often exceed $20,000, flexible payment structures aren't optional. Different financing models serve different needs:
Revolving healthcare credit cards. CareCredit operates across hundreds of thousands of provider locations using deferred interest promotions—pay the balance in full by the promo period end, or face retroactive interest from the purchase date. This model offers network-wide acceptance but comes with higher merchant fees.
Fixed installment plans. Platforms like Cherry offer true 0% APR options (no deferred interest traps) with soft credit checks and practice-specific approvals. Installment loan structures provide predictable payments for both patients and providers.
Buy now, pay later. Affirm and others bring BNPL structures to healthcare, splitting larger bills into smaller installments with transparent terms.
Collection rates reveal the challenge. With typical patient balances ranging $1,000-$5,000, providers struggle to collect even half of total patient obligations. Evolving state-level medical debt reporting restrictions further complicate underwriting strategies.
III. How does provider financing work?
Medical equipment financing helps healthcare providers acquire costly devices like CT scanners, MRI machines, and X-ray systems, using the equipment itself as collateral. These capital investments can run into six figures per unit.
Practice loans fund expansions, partner buy-ins and buy-outs, and general working capital needs. Delayed insurance reimbursements from Medicare and Medicaid create persistent cash flow gaps that lines of credit help bridge for short-term payroll and supplies.
Employer-sponsored healthcare benefits have emerged as a distinct model. Some platforms offer 0% interest employee financing as wellness programs, though these require significant workflow automation to operate efficiently—without it, administrative complexity quickly overwhelms small teams.
IV. What regulatory challenges affect healthcare financing?
Medical debt reporting creates a patchwork regulatory environment. The CFPB finalized a medical debt rule in January 2025 that would have removed medical debt from credit scores entirely, but a federal court vacated it in July. While the federal rule no longer stands, several states including New York, Colorado, and California maintain their own bans on medical debt reporting. Major credit bureaus have already voluntarily removed paid, small, or recent medical debts. Lenders now face state-by-state variation where underwriting approaches must adapt based on geography.
Price transparency enforcement continues accelerating, with regulators scrutinizing how providers communicate costs and financing options. For many consumers, affordability ranks as the most important factor in their healthcare experience.
Compliance automation has moved from nice-to-have to necessity for navigating state-specific medical debt reporting rules. HIPAA considerations add another layer when patient data flows through financing platforms.
V. What technology do healthcare lenders need?
Point-of-sale integrations require real-time decisioning APIs that connect directly to medical practice management software. Patients expect approval decisions within seconds, not minutes. Flexible payment structures must support promotional financing periods, conditional re-amortization, and true interest-free options alongside traditional amortization.
Merchant portal tools give providers visibility into patient enrollments, payment status, and performance reporting. Robust loan servicing infrastructure handles healthcare-specific requirements like promotional financing mechanics, soft credit check workflows, and regulatory guardrails for medical debt reporting compliance.
Depending on your needs, modern lending platforms should be able to support high-volume patient financing (smaller loan amounts with quick decisioning) and large-scale equipment financing (six-figure purchases with different underwriting requirements) within a single infrastructure.
VI. Bottom line
Healthcare financing represents a growing market with substantial operational complexity. Point-of-sale decisioning requirements, a patchwork of state-level medical debt regulations, and the persistent affordability crisis affecting millions of Americans create challenges that distinguish healthcare lending from other verticals. Technology infrastructure needs to handle both instant approvals for smaller patient loans and structured underwriting for six-figure equipment purchases, requirements that general-purpose lending platforms struggle to support effectively.