Soaring healthcare costs are enough to make you feel ill — or worse, stop you from seeking care altogether.
In its brief, 2021 and Beyond, the American Medical Association (AMA) stated that 30% of insured U.S. adults found it hard to meet their health insurance deductibles and premiums, adding that approximately half of them “reported they or a family member delayed or skipped needed healthcare or dental care in the past year due to cost.”
And for practices, unpaid medical bills reportedly hover in the range of $140 billion annually, according to a report in the Journal of the American Medical Association.
With medical costs increasing on both sides, financial innovation is the best treatment. Hanging in the balance is patient health and experience, shaped by a desire for transparency.
This touches all practices as patients are thinking and acting more like consumers.
In a conversation with PYMNTS, CareCredit CEO Alberto (Beto) Casellas acknowledged that “insurance costs are shifting, and the proliferation of high-deductible plans have made the patient the new payer.”
Out-of-pocket medical spend has reached a record $400 million annually — with a commensurate rise in collection costs for providers — and Casellas said it’s bringing about a new sense of “consumerism” in healthcare that’s reflected in an increasing number of payment options.
“Providers having conversations with patients about finances has been sort of [an uncomfortable] topic at the time of care or pre-care,” he said. “But consumers are beginning to get more savvy.”
Consumers now want more information about costs upfront — and payment flexibility too.
“I really want to be able to take care of my knee or be able to take care of my smile or be able to take care of my hearing in a way that satisfies me and makes sense for me,” he said. “And so we see that consumerism … trend moving that way.”
It’s consistent with PYMNTS research that found 47% of patients with out-of-pocket costs “do not know if their healthcare providers offer affordable payment alternatives. Among the 31% who were aware that their healthcare provider offered alternative payment options, more than half used them.”
Get the study: How Improving Billing Experiences Impacts Patient Loyalty
That’s a prescription for patient-consumer loyalty, and precisely what CareCredit is fostering.
Payment Options Getting Healthier
What’s emerging in the new paradigm is the need to discuss cost and treatment plans in conjunction and give patients payment options that suit their situation.
CareCredit’s healthcare credit card allows consumers to pay medical bills from a line of credit at its network of 250,000 providers that run the gamut from major medical to dentistry to veterinary.
“There’s an opportunity for physicians and providers to include these conversations [about cost] in conjunction with care management plans,” he said. “These conversations are not only a way to build … patient loyalty but also improve the outcomes that patients are looking for by delivering much stronger revenue cycle management and … less risk to the provider.”
Saying that “consumerism is here to stay” in healthcare, Casellas noted that “the traction that we see on our provider locator” evinces patient-consumer interest in not only having a dedicated healthcare credit card, but in finding providers who accept it.
CareCredit operates much like a standard credit card in that there’s an application process that not everyone gets through. That’s because the company is underwriting risk with every charge.
“We’re going to underwrite folks that … have the ability to pay,” Casellas said. “We want to make sure that folks can pay their bills from a standpoint of lending those dollars, but [also] giving flexibility for that consumer that may potentially be in a situation to be stretched at the moment and need the financing to be either flexible or have more alternatives” regarding how they pay for care.
Read also: Healthcare Billing Should Be Seamless, Frictionless and Transparent
Loyalty Among Healthcare’s ‘Repeat Customers’
As buy now, pay later (BNPL) becomes a payments success story accelerated by the digital shift brought on by the pandemic and related factors, more options are coming online for “care now, pay later” installments that help patient-consumers manage costs.
As for BNPL, Casellas said: “The amounts that we finance might be … hundreds of dollars, in the thousands of dollars. From that standpoint, perhaps BNPL may not be the choice in terms of that provider providing that offering because it’s a large amount.”
He said he believes that specialty credit cards that are easier for practices to work with and that help patient-consumers compartmentalize healthcare spend may be less friction-filled than installments.
To lock in increasingly important patient-consumer loyalty, the approach is working.
“Sixty percent of our sales now are really repeat sales, and what that means is that we used to be a one and done,” Casellas said. “Get this knee surgery … then you’re done.”
That means CareCredit cardholders who have a positive experience paying for LASIK surgery on one eye are more likely to return to that provider for a second LASIK procedure — and more likely to use the company’s provider network for dentistry, veterinary and related expenses.
“What we’ve been able to do, and really invest in our brand as well as in our product offering, is give that choice to the consumer to repeat the use of their card and be able to pay for those expenses,” he said.
See also: Healthcare Installment Options Proving a Curative for Common Payments Problems
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