WakeMed's Zero Percent Healthcare Financing Solution.

Tens of thousands of patients are treated each year at Raleigh, NC-based WakeMed Health & Hospitals. The 970-bed health system includes three full-service hospitals, three stand-alone emergency departments, a children’s hospital plus a rehabilitation hospital and many outpatient care locations.  A portion of these patients leave with large medical bills and the stress of knowing they have no good way to pay for the expenses. 

To help patients pay their outstanding balances, the not-for-profit healthcare system historically made payment arrangements directly with patients, according to Holly King, WakeMed’s director of customer service and collections. 

“We put our patients and their families first and serve everyone, regardless of their ability to pay,” says King. “Even patients with insurance often struggle to pay their deductibles and out-of-pocket expenses.”   

For years, WakeMed watched its accounts receivable balance grow. By December 2019, the health system was self-managing approximately $14 million in outstanding balances through payment plans that gave patients up to three years to pay balances that could reach $10,000, $20,000 or more. Managing these accounts was an expensive and onerous task. That’s when WakeMed entered into a contract with CommerceHealthcare^®, a division of Commerce Bank, to begin a new approach.      

A win-win solution.

Under the contract, CommerceHealthcare^® agreed to purchase WakeMed’s portfolio of outstanding balances. Patients with existing payment plans would now send their monthly remittances to CommerceHealthcare^® instead of WakeMed. Beginning in 2020, newly discharged patients who needed more than three months to pay their balances would apply for Health Services Financing (HSF^®), a no-interest program offered by CommerceHealthcare^®. 

King says the switch to HSF^® has proven to be a win-win for all involved. 

“For our patients, we were looking for two things,” King explained. “First, we wanted payment terms that were flexible and allowed patients with larger balances more time to repay their outstanding balances. Second, WakeMed wanted a program that offered patients a self-enrollment option.” 

Additionally, King shared this “Asking for financial help is hard, and our patients appreciate privacy. If given a choice, many patients and their families would rather enroll in a payment plan online than set one up with a member of our customer service staff.”  

The HSF^® program from CommerceHealthcare^® met both those objectives. Repayment terms are determined based on the outstanding balance. To make them more affordable, patients owing more than $8,000 can have payment terms extended to as long as five years.  

Patients have the option of applying over the phone, in-person or through MyChart, an online platform that allows patients to access their health information, make appointments and interact with their healthcare providers. WakeMed was the first health system in the country to integrate HSF^® into MyChart^®, which is operated by Epic, a large medical software company.

“We have been challenged to think about how we do things and work to find a better solution for our patients,” King continued. “Commerce has been responsive to tweaking their system to accommodate our needs and make our patients’ lives easier.” One such workaround makes it possible for families with more than one payment plan to receive a single, combined invoice. 

Respecting patient privacy; improving cash flow. 

Since the HSF^® program’s kick-off in 2020, about 25,000 patients have obtained zero-interest loans through CommerceHealthcare^®. Three in four have had initial balances of less than $3,000 — roughly the amount of insurance deductibles. 

King says patients have also embraced the self-serve approach to accommodate patient privacy. For example, in May 2023, WakeMed received nearly twice as many applications through its online portal as through traditional customer service channels. 

As for WakeMed? The health system now receives payment for outstanding balances from CommerceHealthcare^® within days of a patient making an HSF^® loan. WakeMed’s internal patient debt load has been reduced to about $400,000. 

In addition to improving cash flow, WakeMed has significantly reduced the administrative costs associated with in-house program administration. King says, “The clear instructions on the self-serve option have helped reduce the call volume to our customer service staff.   

King credits the HSF^® program’s lower-than-average default rate to the efforts the WakeMed team makes to ensure patients understand what they are agreeing to and the longer repayment terms. 

“The team we work with at CommerceHealthcare^® are very responsive. They’re open, they’re honest and they’re flexible. The decision to switch to HSF^® has shown benefits to both WakeMed and most importantly, our patients.”