More than ever, healthcare costs are placing financial strain on Americans. A recent Gallup/West Health poll found if given the choice, most Americans would rather freeze their healthcare costs than accept a 10 percent increase in household income.1
Part of the problem is rising out-of-pocket costs that patients aren't used to paying. During an interview at Becker's 9th Annual CEO + CFO Roundtable in November, Beto Casellas, CEO of CareCredit, from Synchrony, spoke about healthcare's affordability crisis and how providers can best address the financial and clinical issues caused by high out-of-pocket expenses.
Editor's note: Responses have been lightly edited for clarity and length.
Question: Healthcare affordability is a huge issue right now for Americans. How are high out-of-pocket healthcare costs affecting patients?
Beto Casellas: The most direct impact is on decisions about care. In many cases, patients are choosing to delay care, decline care altogether, or decrease care by moving forward with only part of the recommended care rather than the full treatment. A study this year by the Federal Reserve found that 24 percent of Americans surveyed declined medical care in 2018 due to cost.2 Our own research backs this up. A study we completed in 2019 found that 43 percent of patients surveyed said medical costs have changed their behaviors (e.g., leading them to delay, decline, or discontinue care).3
Rising out-of-pocket costs are also taking a toll in other ways, causing a lot of anxiety and stress in patients' lives. That same CareCredit study found that 27 percent of the patients we surveyed said medical costs are a source of stress.4 It's no wonder, given the impact medical bills can have on many individuals and families. When a single medical event could blow their budget and create severe hardship, concerns about healthcare costs can really take a toll on people and affect their clinical decisions.
Q: How have you seen high-deductible health plans affect the payment process for providers?
BC: Providers are having to collect a significant portion of healthcare costs directly from patients. We periodically survey providers in our network to learn what trends they're experiencing in cost and payments. The most recent edition of this study, completed just a few months ago, found that on average, 27 percent of providers' revenue now comes from patients' out-of-pocket payments.5 At the same time, we found that 59 percent of providers surveyed said "patients feeling they should not owe money" was their biggest concern related to billing.6 That suggests there's a sizable disconnect between what patients think they need to pay and what providers need to collect, which creates the potential for tension that could affect the provider-patient relationship and care delivery.
On top of this, there's the issue that most healthcare organizations are set up to focus on third-party reimbursement. Processes, systems, staff, and other aspects were all designed to collect from insurers, and the reality today is that collection needs to focus much more on patients. At best, this may mean a good amount of change, and at worst, it can be quite disruptive and challenging for many organizations, as well as those they serve.
Q: Is there a solution that can address the financial and clinical issues caused by high out-of-pocket expenses?
BC: High out-of-pocket expenses are requiring us to think of the patient as a healthcare consumers because they are approaching their healthcare purchases as consumers. They want things like price transparency, online product and provider research, comparison shopping, a personalized and positive shopping experience, good value for their investment, and appealing payment and financing options.
Any solution must include financial conversations because their financial experience is an integral part of the overall patient experience and it may even lend itself to clinical benefits as well. Financial conversations should come early and continue throughout their care journey — including when a patient is considering a service, choosing a doctor, attending a previsit appointment, going to the actual appointment or having a post-service conversation.
Q: How can providers give patients billing experiences that they've come to expect from retailers?
BC: Thinking about patients as consumers is a big piece. Healthcare consumers want to have basic flexibility and options when it comes to paying their bills. Typically, patients are billed 30 days after their care. Moving the payment conversation up to a patient's first interaction can help make their experience like other transactions they experience.
Providers can also offer financing options, like flexible payments and promotional financing. Even when a situation isn’t ideal or news isn’t welcome, when patients feel like they have the power to make choices can help. It may feel overwhelming for providers to create an Amazon-level customer experience, but with help from third-parties financing options, they have access to tools and resources that can help improve the patient’s financial experience at every touchpoint. Ultimately, it’s about helping patients feel informed and empowered with their healthcare purchase with a provider who supports their end-to-end financial experience.
1 Gallup, The U.S. Healthcare Cost Crisis Press Release, March 26, 2019.
2 Federal Reserve Board, Report on the Economic Well-Being of U.S. Households in 2018, May 2019.
3 CareCredit, Understanding the Medical Journey research, conducted by Chadwick Martin and Baily, Q2 2019.
4 CareCredit, Understanding the Medical Journey research, conducted by Chadwick Martin and Baily, Q2 2019.
5 CareCredit, Healthcare Payment Benchmarks, Sep. 2019.
6 CareCredit, Healthcare Payment Benchmarks, Sep. 2019.