What Is Medical Financing and How Can It Support Health Equity (Without Creating New Harm)?

If you spend any time in health equity work, you’ve heard the same pattern in a hundred different forms.

• A patient needs care.
• Care is available.
• The bill is the problem.

Without a doubt, cost is one of the most stubborn drivers of delayed care, skipped medications, not undergoing preventative treatments and avoidable complications. It also connects directly to the “real life” stuff we talk about at health equity conferences. Things that include unstable housing, food insecurity, job insecurity, and transportation challenges. When healthcare debt hits an already-fragile household budget, the ripple effects can last for years causing devastation to a family.

That’s why more clinics, hospitals, and specialty practices are exploring medical financing. It can help patients move forward with needed care. But it can also backfire if the terms are confusing, the interest is high, or the option is presented before lower-cost support is explored.

What About Medical Financing?

Medical financing is any arrangement that allows a patient to pay for healthcare over time via payments each month instead of paying the full amount upfront.

In practice, it usually shows up as one of these models:

Provider Payment Plans

The patient pays the provider directly in smaller installments (often interest-free, sometimes with fees).

Third-Party Financing

A financing company pays the provider (often quickly), and the patient repays the financing company over time. Approval may involve a credit check and may include interest depending on the plan and the patient’s profile.

“Point-of-Care” Monthly Payments

This type of loan is similar to what shoppers see in retail checkout flows, but for medical bills. It’s basically “pay monthly” or “pay over time.”

Why Medical Financing is a Health Equity Topic

Medical financing sits at the intersection of healthcare access and household financial stability.

KFF research has found that about four in ten adults report having some form of healthcare debt. Also, the burden is not evenly distributed across income, coverage status, race/ethnicity, and family situation.

In clinical settings, especially oncology, chronic disease management, and specialty care then cost stress can become its own kind of clinical risk. The National Cancer Institute even uses the term “financial toxicity” to describe the real harm patients experience when care costs end up creating financial distress.

From a systems perspective, CMS has also emphasized embedding equity into programs and policies over a long-term horizon. This includes attention  to social risk factors that worsen disparities.

Please remember that medical financing doesn’t replace coverage, affordability reforms, or social support. Instead, it often becomes the “last-mile” tool patients face when costs still land on them.

The Potential Upside

Medical financing can be helpful in very specific situations:

Reduce Delays in Medically Necessary Care

A patient who can’t pay a lump sum may still be able to manage an affordable monthly payment. That can matter for time-sensitive treatment plans.

Stabilize Provider Cash Flow Without Aggressive Collections

For providers, fewer accounts going into collections can mean less administrative strain and fewer patient relationships damaged by billing conflict.

It Can Create Space for Shared Decision-Making

When financing is presented honestly and in an easy to understand way, it can help patients choose among treatment options with realistic cost expectations because they don’t have to guess.

This is where health equity leaders should focus because financing can create new barriers if it isn’t designed with patient needs as the main consideration.

• Risk #1: Financing becomes the default instead of the backup. If the first solution to financial problems is  “apply for financing,” then patients may never learn about financial assistance policies, sliding scales, charity care, or alternative care pathways.
• Risk #2: Terms can be confusing, especially if a patient is stressed and upset. Patients are often making decisions while anxious, in pain, scared or overwhelmed. “As low as $79/month” can hide the real total cost if the repayment term is long or interest is high.
• Risk #3: Credit-based approval can reproduce disparities. If financing approval relies heavily on a good credit score, then the many patients most likely to need help may be the least likely to qualify, or they may qualify only under worse terms.
• Risk #4: Medical debt can spiral into broader financial harm to a patient. Even outside of financing products, medical debt has been a major consumer protection focus because of its impact on credit and borrowing.

If you’re evaluating medical financing for a health system, clinic network, or community-based program, here are practical safeguards that keep the program from drifting into harm:

Screen for Financial Assistance First

Before offering financing, patients should be screened for things like Medicaid eligibility support, hardship discounts, and other assistance that may be available.

Use Plain-Language Disclosure

Patients should understand the following:

• Total cost paid over time
• Interest rate (if any)
• When the interest rate applies
• Fees and late-payment consequences
• If approval involves a credit check

Ideally, you should always offer an interest-free pathway when possible. If your medical organization can support provider-managed payment plans for qualifying patients then that option can keep care accessible without turning healthcare into high-interest debt for your patients. .

Track Equity Outcomes, Not Just Repayment

Measure who uses financing by demographic and socioeconomic indicators (where appropriate and lawful), and look for patterns such as the following:

• Who gets approved vs. denied
• Who ends up in delinquency
• Whether financing reduces care delays
• Whether complaints cluster around confusion or pressure

Train Staff to Present Financing

The script matters. Take the time to talk through assistance options and payment plans we can talk through assistance options and payment options.

How This Fits the CMS Health Equity Conference Conversation

Medical financing touches multiple themes such as access, social risk factors, patient trust, and how policy shows up at the front desk.

If you’re building a session, poster, or community discussion, consider framing questions like:

• When does financing expand access, and when does it shift risk onto patients?
  
  
• What protections should be standard before a financing offer is made?
  
  
• How do we ensure patients hear about assistance options first?
  
  
• What metrics prove the program improves equity outcomes?
  

Bottom Line

Medical financing can be a bridge, but the design can also be a trap. If financing is transparent, offered after assistance options and monitored for equity impact, it can help patients get care without forcing impossible upfront payments for patients. However, if the process is confusing, depends on credit, or presented as the first (and only) solution, it risks creating financial harm, especially for the communities health equity work is meant to serve.