Consumer loans and the idea of having credit has been around since at least 3500 BC. Today’s financing options are far more diverse but also more complicated. 

Two options many hospitals ask about when setting up patient financing are recourse and non-recourse programs. What is the difference, and why might your health organization consider one over the other? 

Recourse Programs

Recourse finance means that a loan would be sent back to the original creditor in case of default. In the case of our patient financing plans, the advantages for us to offer this type of program include: 

  • Offers a uniform program to your entire patient base.
  • No credit checking or credit scoring for the participants.
  • Patients have the option of low or no interest rates. 
  • The recourse percentage (number of accounts that are sent back to the hospital after default) stays under 8 percent.  

Non-recourse Programs

Non-recourse means that the hospital would send the patient account to the Financing Company. Once the patient has made their first payment, the hospital would be funded, the account would be closed, and the financing company would take full ownership. Some of the problems with this approach:  

  • Patients are given an interest rate based on their credit score.
  • Every patient is offered a different plan, which can be unfair.
  • The Financing Company can often get negative reputations for credit reporting. 

A recourse program is usually a better approach for hospitals than a non-recourse program. Recourse programs offer low or no interest, have a lower fee charged to the hospital, and have a better reputation.  

Many health organizations find it best to outsource these programs. Third-party partners have the necessary IT and Compliance procedures in place to handle high volumes of accounts. Their representatives are also knowledgeable about healthcare accounts and patient responsibility.
Horizon Health fund works in coordination with Professional Recovery Consultants, offering hospitals and health organizations a one-stop solution for financing and recovery. Learn more about our program.

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