At Becker’s 8th Annual CEO & CFO Roundtable in Chicago in November, CareCredit hosted an executive roundtable to discuss how providers are navigating the rise of consumerism and healthcare’s changing financial landscape.
Patients are forgoing necessary care services because of cost
According to the Federal Reserve Board, 40 percent of Americans couldn’t afford an unplanned expense of $400 and 20 percent had a major unplanned medical expense in 2018 with a median cost between $1,000 and $4,999.[ii] In 2018, nearly one quarter of Americans (24 percent) declined medical care due to cost.2
Alberto “Beto” Casellas, executive vice president and CEO of CareCredit, said, “Our studies have found that when patients don’t have options to pay for healthcare services, they either delay procedures or don’t have the procedures at all.”
Over the last five to six years, the rise in high-deductible health plans has increased patient out-of-pocket expenses, creating a barrier to healthcare services.
The CNO for a 180-bed medical center in the Southwest explained, “We’ve seen a steady decline in elective imaging and other elective procedures. We didn’t see increased acuity immediately in our acute care facilities. A lot of people decide to defer care, then they show up in the emergency department where they get whatever procedure they were deferring.”
The CMO for a Midwestern health system with more than 120 care sites and 3,000-plus employees said his organization offers staff a high-deductible health plan. Many choose it due to the low premiums. When people get sick, they go to the walk-in clinic which has a low copay. If they get referred to the emergency room, they often refuse the treatment because they don’t want a $300 copay. As a result, ER volumes have dropped.
With more financial responsibility, patients want price transparency
Finding out how much a particular procedure or care episode costs can be a vexing challenge for patients. Informed consumers want to know what they’re being charged. Unfortunately, many health systems aren’t equipped to provide patients that information.
The communication process is complex. Patients have to call multiple people, get put on hold and wait for calls. It’s easier to get an itemized bill from a car mechanic than it is to get one from a healthcare provider. Patients are asked to accept ambiguity in healthcare that they would never tolerate in other areas of their lives.
“If an educated Millennial wants to know the breakout of their healthcare costs so they can compare providers, we’re not prepared to answer that,” the medical center CNO said. “The only answer we have is the fee schedule, if we have access to that. We publish our CBMs now, but I don’t feel right saying, ‘Here’s your $110,000 line-item cost for a defibrillator.’ That kind of discussion doesn’t have winners.”
Patient credit solutions satisfy consumer needs and ensure prompt payment for providers
Even after they decide to seek care, many patients have trouble paying their bills promptly. According to Instamed, 73 percent of providers say that it takes more than a month to collect from patients.[iii]
CareCredit is a helpful alternative for both patients and providers. CareCredit is a third-party non-recourse[iv] payer that provides a credit card for consumers to pay for non-emergency, out-of-pocket health expenses. There are over 11 million CareCredit cardholders in the United States and it’s accepted at 230,000 enrolled provider locations.
“We’ve been in business for 30 years. CareCredit offers tools, resources and educational support,” Mr. Casellas said. “The company assumes the liability of consumers’ out-of-pocket healthcare expenses and providers get paid in two days.”
CareCredit offers multiple ways for patients to apply for a credit card. Patients can conveniently text to apply or scan a QR code on select print materials to start their application process. Providers can also help patients by walking them through the application process or refer patients to the CareCredit.com website. Some providers install the CareCredit Direct mobile app on iPads and let patients use those in the office. CareCredit determines a patient’s creditworthiness within seconds of completing the application.
Thanks to CareCredit, patients are able to seek care when they need it and complete their recommended treatment plans. This can lead to better health outcomes. CareCredit payment options can also improve the patient financial experience. The company has best-in-class Net Promoter Scores.
On the provider side, CareCredit increases cash flow and revenue, while reducing accounts receivable, bad debt and billing and collections expenses. CareCredit solutions can be tailored for all types of patient care, such as certain specialties, facilities and procedures. For instance, some health systems use CareCredit solely for elective patient procedures, while others use it for all types of patient expenses.
Conclusion
As healthcare costs continue to grow, many patients are struggling to pay for care and many health systems are struggling to achieve financial sustainability. Healthcare credit cards with promotional financing options are promising solutions to these challenges. Consumer interest in these options is growing since healthcare expenses are affecting their pocketbooks.
“We think that CareCredit presents an opportunity for certain parts of the population to take care of their healthcare in a new way,” Mr. Casellas said. “As out-of-pocket healthcare expenses continue to rise, consumers want options.”
[i] Centers for Medicare & Medicaid Services, National Expenditure Data, 2018 https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical
[ii] Federal Reserve, Report on the Economic Well-Being of U.S. Households in 2018, May 2019, https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm
[iii] InstaMed, Trends in Healthcare Payments Eighth Annual Report, published May 2018
[iv] Subject to the representations and warranties in your agreement with CareCredit including but not limited to only charging for services that have been completed or that will completed within 30 days of the initial charge, always obtaining the patient’s signature on in-office applications and the cardholders’ signature on the printed receipt.
