Buy Now, Pay Later Options Help Fill Dental-Care Gap

Millions of Americans can’t afford to turn that frown upside down due to the high cost of dentistry, giving dental buy now, pay later (BNPL) plans ideal conditions to win new users.

Not only does this put dental care within economic reach in a badly strained economy, but it also gives dental practices a new revenue stream, enabling them to accept patients who otherwise couldn’t afford their services.

Dental Economics reported in July that because roughly 74 million Americans lack dental coverage, “In theory, a practice could be turning away hundreds of patients a month due to high costs and limited financing options. But some lenders are expanding on the buy now, pay later (BNPL) pay-in-four concept by providing fair, fixed-rate loans for dental providers to offer patients, helping reduce financial stress if a routine teeth cleaning turns into a root canal.”

This aligns with PYMNTS research finding that Americans are not getting needed medical interventions, including dental, due to cost. According to the study “Access Channel: How Healthcare Financing Keeps Patients Engaged,” a PYMNTS report with research sponsored by CareCredit, a full third of U.S. consumers have gone without medical care, citing cost concerns as the principal reason.

Get the Study: The Access Channel: How Healthcare Financing Keeps Patients Engaged

CareCredit was founded as DenCharge, providing consumer financing for pricey procedures like root canals, caps and crowns. This grew into a broader healthcare line of credit concept. Hurt by the pandemic as much or more than other medical practices, the truly painless dentists of 2022 are those offering crucial treatments in affordable installments.

The need is attracting new BNPL players, as seen in June news from installment financing FinTech Sunbit, whose product also covers veterinary care, among other areas.

Per that announcement, Sunbit provides financing for procedures costing up to $10,000 with terms anywhere from six to 12 months.

“Sunbit powers the application process and manages the collections process,” the company said. “The dental office gets paid right away, contributing directly to the cash flow of the business without the risk of a patient defaulting on the loan.”

Extracting Dental Payments Pain

A leader in healthcare financing, Rectangle Health has seen more dental practices catching on to the revenue bump and patient benefits that payment options bring to the dental chair.

“If a little eBay store, so to speak, can facilitate online payment easily, the dental practice in town or the orthopedic practice in town has the same ability,” CEO Dominick Colabella said in an interview with PYMNTS’ Karen Webster. “They have the same tools.”

According to the PYMNTS study, “Connected Healthcare: What Consumers Want From Their Healthcare Customer Experiences,” a collaboration with Rectangle Health, patients are switching providers, seeking dentists offering digital payment options including installments and other forms of financing.

In that study, 56% of respondents “expressed significant interest in payment plans, and patients across all demographics report interest in covering bills that insurance will not pay for with affordable payments. The difference between the amount that would cause patients living paycheck to paycheck and those earning above $100,000 annually to seek out affordable installment payments for medical bills differed by less than $800.”

Read the Study: Connected Healthcare: What Consumers Want From Their Healthcare Customer Experiences

As more consumers seek out the care they avoided during the pandemic — with dental visits high on that list — more are becoming aware of and curious about blooming BNPL terms.

In April, healthcare BNPL firm Opy did its own survey, finding that 71% of patients would “regularly use BNPL over traditional payment methods, such as credit card, debit, or cash when visiting the dentist. The trend was even higher for pet owners, as 86 percent stated they too would opt for BNPL over traditional payment methods. These findings are mainly due to BNPL’s payment flexibility and fixed rates.”

Opy added that “of all participants surveyed, the bulk of the respondents indicated that payment flexibility is the most desirable feature of BNPL,” with 43% of dental patients and 43% of pet owners citing this inclination when it comes to paying for dental care.

See also: Rebuilding Healthcare Payments on a Foundation of Wellness, Access and Affordability