Analysis provided by Colleen Acunzo, Managing Partner of Acara Partners and co-founder of the med spa movement in the Unites States.
Offering financing options for patients in aesthetic medicine has become a norm in the industry over the last several years, often leading to business growth and patient volume increases for practices.
The Summer 2018 Aesthetic Business Institute’s Flash Poll establishes some interesting trends and benchmarks for patient credit. For example, it was found that 73% of those practices that do not offer patient financing fall into the category of “less than $1 million” in annual revenue (the lowest category offered in the survey).
Offering Patient Financing
Over 57% of aesthetic medical practices surveyed offer some type of financing to their patients. Within this majority that does provide patient credit options, 56% offered 12-month financing and 23% provided a 24-month option. Drilling down even further, it was determined that a popular option in this industry is 0% financing. Over 47% of those surveyed who do offer 0% patient credit do so with a 12-month option, 26% offer 6-month 0% financing, and 13% provide an 18-month option. There also were several variations and options for patients with the 0% opportunities. For example, one practice mentioned that they offer 12-month interest free financing if the patient spends over $1,000.
As for specific patient financing companies within the industry, Care Credit was the clear winner, being used by 86% of those surveyed (other companies mentioned as being utilized included Lending USA and Green Sky).
With these numbers in mind, the question becomes just how effective patient financing is for aesthetic medical practices. For a vast majority of those surveyed (67%), patient credit was responsible for 11%–25% of their annual revenue. To break this down even further, 40% of those practices providing credit options to patients claim this involves 11%¬–15% of their revenue.
“Patient financing provides an easy and budget friendly way to pay for cosmetic procedures that insurance doesn’t cover,” added Colleen Acunzo, Managing Partner of Acara Partners and co-founder of the medspa movement in the United States. “With no down payment and easy monthly payments, patients can choose from a variety of monthly plans that best suit their personal financial needs.”
Characteristics of Those Surveyed
For those who completed this ABI Flash Poll, 40% represented a med spa, 33% were from an aesthetic medical practice, 17% involved plastic surgeons, and 10% a cosmetic dermatology practice. In addition, 43% surveyed were from a practice that reported a gross revenue under $1 million, 23% were $1–$2 million, and 20% were $3–$4 million. As was mentioned earlier, it is important to note that this survey shows over 70% of those who do not offer patient financing in their practice earn the least amount of revenue (fit into the less than $1 million in annual revenue).