People of all ages require access to healthcare services, but not everyone engages with providers and insurers the same way.
Tim Donovan, senior vice president and chief marketing officer for CareCredit, took the time to speak with Becker's about how the healthcare experience of patients differs by generation, and how CareCredit can cater to these varied needs.
For more than 30 years, CareCredit has provided a valuable payment option for healthcare treatments and procedures insurance typically doesn't cover, either in part or in full. Cardholders can also use the CareCredit health, wellness, and personal care credit card to pay for deductibles, co-payments, and other out-of-pocket costs. Providers who accept CareCredit receive payment in two business days, and it’s non- recourse.^
Editor's note: Responses have been lightly edited for length and clarity
Question: What are some of the biggest differences in how each generation researches, chooses, accesses, and pays for healthcare?
Tim Donovan: The use of and comfort with technology can be a major difference among generations. While there are baby boomers who are extremely tech-savvy, and not every member of Generation Z is constantly connected, in general it's fair to say that younger people may be more comfortable with technology. Technology may also play a more integral role in more aspects of their everyday lives. In terms of healthcare, for example, we’ve found that millennials are very inclined to go online for information, using Google searches and sites like WebMD and Wikipedia at significantly higher rates than older consumers.* Millennials are also more likely to use online payment portals than non-millennials (61 percent vs. 39 percent), and they are more open to using telehealth services.
Generational differences also appear in some other interesting areas. Millennials are more likely than Generation X or baby boomer patients to ask family members or colleagues for input on healthcare, and they're much more likely to consult their friends. In terms of paying for healthcare, millennials are more likely to pay with a debit card or cash, while older patients more often pay with a credit card. Millennials are also more likely to have additional spending or savings accounts for healthcare purchases, such as an HSA, FSA, HRA, or HIA. When we look at Generation Z, which represents the youngest, and one of the largest, cohort of consumers, this shift away from traditional payment methods is even clearer. In one of our studies, fewer than half of the Gen Z respondents had a credit card (43 percent), checking account (42 percent), or savings account (39 percent), but 61 percent reported using PayPal, and 21 percent used peer-to-peer payment apps like Venmo and Cash App.
Q: What advice would you give providers to help them serve each generation effectively?
TD: I think providers need to be aware of generational differences, but it's also important not to overemphasize them. The examples I just shared are real points of distinction, but there's also a lot that patients of different generations have in common. For example, attitudes about personal health tend to be fairly similar across the generations, though older patients may be less satisfied with their health and consider it more important. Interestingly, even spending on healthcare for oneself and family members is fairly consistent among patients of all ages. However, millennials do spend the most, and they outspend Gen Xers and baby boomers on care for their pets by a good margin.
The key with any patient is earning his or her trust. Acknowledging personal preferences and tailoring your approach can help with this, but I think the most vital factor is simply communicating clearly and honestly. Patients want to be heard and understood, and they want to know you’re able and willing to help them. Consider offering solutions like innovative payment options, or a range of ways to communicate, such as text, email, and online chat in addition to phone calls. Regardless of the communication channel, it's important to be transparent, empathetic, committed, and a good listener.
Q: In what ways do millennials and Gen Z have the potential to drive disruptive change and innovation in the healthcare industry?
TD: I've mentioned the technology angle, but the bigger story may be sheer force of numbers. The aging, retirement, and increasing healthcare needs of baby boomers is a major story in the industry right now. However, millennials and Gen Z are an even bigger cohort, and it looks like they’re engaging with the healthcare system earlier and in more ways than previous generations. This positions them to drive profound change on a large scale. We're not just talking about an interest in technology, or expectations that it will play a role in their healthcare experience. They actually have the demographic and spending power to demand that those expectations are met. I can't fully predict how that dynamic will evolve in the years to come, but I do know that we need to pay attention to younger patients if we want to understand what the future of healthcare looks like.
Q: What aspects of healthcare cause the most confusion for patients? Do levels of understanding and points of confusion vary across the generations?
TD: These are important questions, and the results are pretty interesting. We've found that the top four sources of confusion are the same across all generations: coverage, insurance plan options, cost, and billing. Among those topics, though, there’s some variation by generation. For instance, insurance coverage is the biggest question mark for everyone, but it's especially concerning for Gen X—35 percent of our survey participants cited it as their biggest source of confusion or difficulty. More than a quarter of baby boomers chose insurance plan options as the most confusing aspect of healthcare, but just 10 percent named cost as their top challenge, likely reflecting the experience of transitioning to Medicare. For millennials, cost is a bigger concern, presumably due to significant out-of-pocket expenses, an earlier career phase, life events like marriage and children, and so on.
Out-of-pocket expenses are the driving force behind a major, growing trend: healthcare consumerism. Simply stated, patients today are paying a lot for healthcare, and they want more clarity and control related to that investment.
They may expect things like transparent pricing, clear financial policies, on-demand access to account details, more information available via more channels, and options for how and when to make payments. These can be big shifts from the status quo in many cases, but I think they’re necessary shifts. We try to help providers in many of these areas, and I can say that the transition is often easier than people might expect. It can be a win-win for patients and providers alike.
Q: In this dynamic, evolving environment, how can CareCredit help both providers and patients?
TD: Our product is a dedicated health, wellness, and personal care credit card providers can offer and accept as a way to pay for treatment, medication, equipment and supplies, and other out-of-pocket expenses. This can help address both cost concerns and the desire for more flexibility, as it allows cardholders to pay for care without spending cash up front or tying up cards they may use for other expenses. We offer promotional financing options with deferred interest for purchases of $200 or more, or reduced interest for purchases of $1,000 or more, so cardholders can move forward with care today, and make monthly payments over time.** In addition to offering an appealing payment option, providers benefit by receiving payment in two business days, with no liability if the cardholder delays or defaults on payment.^
We also support providers and patients with a number of value-add solutions, tools, and technology. Pay My Provider is an easy solution that enables online payments, for example, and CareCredit Direct is a self-service interactive experience patients can use in a provider location to learn about CareCredit, apply for a card, or make a payment.
Online, we have an online payment calculator, an acceptance locator that gets an average of 1 million searches per month, and a portal where providers can do everything from processing applications and transactions to ordering marketing materials and getting digital assets for their websites and social media channels.
At the end of the day, I think how we help is less about individual solutions, and more about the fact that we've been dedicated to helping patients get the care they want and need for more than 30 years. As a Synchrony solution, we're also drawing on the expertise of the nation's largest provider of private label credit cards in the United States based on volume and receivables† and have more than 80 years of experience in retail finance. This combination positions us well to help both providers and patients in the transition to healthcare consumerism. There may be challenges and change still ahead for our industry, but I'm confident we can navigate them successfully and make things better for all involved.
* CareCredit Generational Health Research Study, Q3 2018.
** Subject to credit approval. Minimum monthly payments required. See carecredit.com for details.
^Subject to the representation and warranties in the CareCredit Agreement with Participating Providers, including but not limited to only charging for services that have been completed or that will be completed within 30 days of the initial charge, always obtaining the patient’s signature on in-office applications and the cardholder’s signature on the printed receipt.
† Nilson Report (June 2017, Issue # 1112) - based on 2016 data.