The cosmetic surgery industry has traditionally been a cash-pay business. For many practices, this model has helped to maintain strong profit margins and cashflow. However, as the popularity of and demand for cosmetic procedures has drastically increased in recent years, offering financing options has become a key growth strategy for many plastic surgery practices.
Here’s how to tell if offering financing options to your plastic/cosmetic surgery patients could be the right move for your practice.
Benefits of Offering Financing Options
There are a number of important benefits that partnering with third-party financing companies or offering in-house financing can have for your practice:
- Expand your patient base. Many potential patients who are interested in plastic surgery may not be able to afford the upfront cost in a cashpay system. Offering financing options allows these patients to move forward with treatment at a monthly cost they can afford, thus expanding your patient base.
- Increase patient acquisition and retention. The cosmetic surgery industry is becoming more and more competitive, making patient acquisition and retention strategies even more crucial to the growth of your practice. By offering flexible payment options, you increase the likelihood that a new or returning patient may choose your practice over another.
- Improve practice growth and revenue. An expanded patient base and increased patient retention ultimately translate to a higher number of treatments and revenue growth for your practice.
Drawbacks of Offering Financing Options
On the flip side, there are also a few drawbacks of offering financing options to consider:
- May reduce immediate cashflow. If you choose to offer in-house payment plans, you won’t see the upfront payments like you would in a cashpay system or when partnering with a third-party financing company.
- Third-party fees. Some third-party financing providers charge processing or other fees to doctor’s offices, which can add up with high volume.
- Administrative burden. Even when using a third-party provider, offering financing can increase administrative tasks for your staff.
Finding the Right Balance for Your Practice
Offering financing options in your plastic surgery practice can be a key strategy in your financial planning and growth trajectory. There are many options to choose from, including in-house payment plans with or without a down payment and working with one or multiple third-party financing companies. Some practices choose a combination of these options – and others have decided that a cashpay system still works best.
The right choice for you will depend on a number of factors, including the current financial health of your practice and your specific goals for growth and expansion. While there can be a few drawbacks to offering payment plans to your plastic surgery patients, many of these can be offset with the help of a private equity-backed partnership, which can help to reduce added administrative and financial burdens that can come along with this payment model.
At Olympus Cosmetic Group, we are a surgeon-led, private equity-backed network of some of the most elite plastic surgery practices in the country. If you are interested in learning more about how we select our partners, please call us at 561-614-8243 or get in touch online.
