Posted: by Bronte
Modern Subscription Healthcare and How it Can Benefit You
Building a healthcare practice can be hard enough without worrying about your client base, equipment maintenance, and processing transactions. Whether you’re just beginning or growing your practice, these are all things that you need to be on top of. While other hurdles can be managed with marketing and attention, accommodating new consumer spending takes a little more flexibility. A new trend in the industry is modern healthcare subscription. It may prove to help expand your practice and make your services financially accessible to your patients. While most people understand the concept of a subscription model, it may be hard to understand its applicability to the medical field. So how exactly does it work?
Types of Subscription Healthcare Plans
- Membership Medicine
- Concierge Medicine
- Direct Primary Care
Each of these three subscription types work in a similar fashion. Patients will pay a flat installment fee on a fixed basis (monthly, quarterly, annually, etc.) which covers the visits and procedures provided by their doctor. Depending on the practice, there may be a limit on the amount of visits that can be scheduled. For instance, if the doctor practices with children, an unlimited amount of visits would make parents feel comfortable and supported. While on the other hand, for a doctor practicing cosmetic alterations, such as Botox injections, defining a set amount of visits per month will incentivize customers to reschedule.
The primary difference between Concierge Medicine and Direct Primary Care (DPC) is that DPC normally does not take any form of insurance. In that case, the financial arrangement is worked out between the patient and doctor. Concierge Medicine does accept insurance for incidentals such as lab work, X-rays and prescription drugs. Due to the lack of insurance oversight, DPC’s tend to be less expensive than Concierge Medicine plans.
These subscription based healthcare services have some great benefits for both patients and doctors.
Subscription healthcare is generally more affordable. The biggest barrier to people getting proper health care is the prohibitively high cost. The subscription based model not only helps patients get the treatment they need, but due to routine visits allows them to focus on preventative care. Another side effect of the subscription membership framework is that visits usually last longer because of fewer patients overall.
The disbursement structure is more reliable because there are monthly payments rather than just on a patient-to-patient basis. Instead of seeing thousands of patients during very short consultations, doctors can spend more time and offer quality service. Doctors working with subscription models see about 1/5 the number of patients a traditional doctor would see annually. But the appeal comes with quality, not quantity, while also not accepting a reduction in revenue.
The Merchant Account Setup
If this model sounds right for your business, there are a few steps to take to get the ball rolling. The first of these is to get a subscription merchant account. These merchant accounts will essentially handle the technology and processing required to take recurring payments from your patients. Security and risk management is another benefit of partnering with a payment processor. Accounts structured like this will need mitigation procedures for these potential risks. Payment processors do the heavy lifting by setting up your online virtual terminal, providing mitigation procedures, and working with your bank.
While merchant accounts handle the subscription structure and security, a payment gateway is the consumer-facing terminal in which those payments are made. It’s essentially the software that links the payment from the customer to the business account. There are many gateway options, some providing services and options more suitable for subscription-based markets than others.
Subscription Healthcare is High Risk
Subscription credit card processing can add some additional risks to your merchant account. Because of the risk for chargebacks, a low credit history, and possible fraudulency, many banks view this business as high risk. In order to accept credit cards, you need to partner with a payment processor that handles high risk credit card processing. It will require more work and preparation on your end to fulfill the requirements imposed on you and your business. This may include higher fees, a reserve account, bank statements, and in some cases a cosigner.
Safety and Security
When it comes to online businesses, and subscription in particular, it is important to accept credit card payments safely and securely. Chargebacks and fraud are fairly common in the industry. By setting up a protection plan and staying compliant with industry standards, you give yourself a better chance at mitigating the negative impact on your business.
- Use an Address Verification System (AVS) to compare the address stored on the credit card used to the address in the credit company database. AVS is included in most payment processing services, but it is always good to double check and make sure it is compatible with your setup.
- Require a Card Verification Value (CVV) as another way to safeguard against fraud. The CVV is not stored in databases when entering card information. For this reason, it is virtually impossible for scammers to get a hold of.
- Having complicated password requirements for user accounts and software updates are two additional ways to prevent fraudulent purchases from going through.
Even while taking all of the above precautions, there are other ways for fraudulent transactions to go through. Abusing chargeback systems in order to get free services or merchandise is a common occurrence. Issues such as this are many times completely out of your control. Luckily, there are services that you can sign up for to keep an eye on payments and alert you when a chargeback is being issued before the bank can see it. Always have clearly displayed policies, your contact information, and a responsive customer service team to respond to issues before they affect your business.