The End of the Public Health Emergency: 3 Things on the Health Payments Horizon

During the past few years of the pandemic, we’ve seen considerable changes in the healthcare payments landscape. Now, with President Biden announcing a decision to end the public health emergency (PHE) in May, more changes are on the horizon.

Public health experts say we can expect the virus to become part of everyday life, and we know the FDA and the CDC are working with drug companies to develop new vaccines that adapt to future variants. In short – the need for more vaccines, treatments, and tests is not likely to go away after May.

  1. Impacts to Coverage

As part of the PHE, many COVID-19-related tests, vaccines and treatments were made free for all Americans. When the PHE is lifted, the out-of-pocket cost for any one of these services will fluctuate based on a variety of factors – whether a person has Medicaid, private insurance, no insurance at all, and where their home is located, to name a few.

The loss of Medicaid reimbursements previously covered under the PHE will have an impact, particularly on patients and providers in lower-income and rural areas. The Center for Healthcare Quality and Payment Reform estimates that more than 200 rural hospitals are already at risk of closing.

  1. The Evolving Patient Payments Landscape

Meanwhile, according to the Kaiser Family Foundation, about half of US adults say they have difficulty affording health care costs – and about 40% say they have delayed or gone without medical care in the last year due to cost. Synchrony’s Lifetime of Healthcare Costs research found that while most guessed that they spent an average of $850 per year on healthcare costs (not including paid premiums), in reality, their actual expenses were closer to $2,100 annually – nearly 145% higher than respondents estimated.

The Lifetime of Healthcare Costs study also found that preparation for healthcare costs also varies somewhat by generation. Half of younger generation respondents – Millennials and Gen Z – were most likely to delay care due to costs, while only a third of Boomers reported they’d do so. The majority of Millennials and Gen Xers -- 65% and 60%, respectively -- reported they were not financially prepared for their most costly out-of-pocket healthcare expenses. This number fell to more than 40% for Boomers and 23% for members of the Silent Generation.

The main takeaway: Costs are preventing people from getting the care they want and need, and they can often be higher than expected. Regardless of their age, patients have become the “payer” in many cases. In recent decades, the cost of healthcare has continued to transition to the patient with rising premiums, co-pays and changes in health plans’ models. When surveyed about healthcare cost preparedness, as part of our Lifetime of Healthcare Costs research, only 20% of patients had a dedicated savings account for unexpected medical expenses, and nearly half of those who were setting aside finances for future healthcare needs admitted their funds would likely be insufficient should a major crisis emerge.

These trends put more financial responsibility on the individual. With the end of the PHE on the horizon, we can expect this trend to continue.

  1. How Providers Can Stay Nimble

On the provider side, there are numerous implications. Namely, the fact that putting more of the onus of payment for care on patients can result in additional complexities in revenue cycle management (RCM).  Research has shown that patients are often unprepared for rising healthcare costs and are not always presented with alternative payment options, leading to delayed collections for providers. Uncertainty surrounding what treatments can be financed as well as where, when and how to seek financial assistance for necessary medical care, have led patients to delay costly procedures or forego them altogether.

Partnering with a third party, such as Synchrony, can help expand payment options for patients, provide education around potential costs and payment plans to payments, and help decrease time to payment for providers. By educating patients about care costs and payment options, having a seasoned partner that can help maximize patient satisfaction and empower individuals to seek the care they need, when they need it, can be critical for preventing higher medical costs in the future due to untreated conditions. Synchrony’s CareCredit credit card is a convenient and reliable solution offering flexible financing options for qualified consumers. It fulfills the evolving needs and expectations of patients, empowering cardholders to pay for the healthcare they need in a way that works for themselves and their families.

With costs increasing, and both patients and providers already navigating a complex financial landscape, we’ll continue to see an increased need for financial flexibility – and the continued need for tools that remove financial barriers to planning for, receiving and paying for care. As the PHE comes to a close, one thing is very clear – this need will not be going away anytime soon.

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