Educating patients about their payment options produces better health outcomes and bolsters practice revenue
Health care spending in the United States reached $4.5 trillion in 2022, positioning the country to have some of the highest health care costs in the world. Despite the total spend, health care outcomes for U.S. citizens are only on par with, and in many cases worse than our peer nations, where health care costs are about half of what they are in the U.S. Research has shown that patients consistently say managing their health care costs is challenging and out-of-pocket health care costs weigh heavily on their decisions to pursue care.
For example, our Consumer Healthcare Journey research revealed that as many as 53% of patients delay medical care due to cost. Likewise, our Lifetime of Healthcare Costs research showed that 46% of people who delayed care reported developing additional health problems as a result. So high health care costs not only impact patients’ financial well-being, but their physical well-being too. Fortunately, options exist to help ease the burden associated with high health care costs and more providers are investing in solutions to support their patients’ financial wellness.
For the last seven years, people in the U.S. have consistently answered no more than 50% of the TIAA Institute’s GFLEC Personal Finance Index questions correctly, and correct responses to questions regarding financial risk were as low as 35%. Patient understanding of health care expenses is important and because research has shown national financial literacy is very low, having discussions with your patients plays a key role in bridging this literacy gap.
How might high health care costs affect your practice?
Providers can feel the impact of high health care costs too. When people forgo care, practices may see decreased patient retention/acquisition, revenue cycle unpredictability and problems with staffing. When these issues arise, their effects ripple and compound. For example, effective revenue cycle management is necessary for keeping operations moving, hence disruptions to it can result in administrative burden for staff and contribute to burnout. We know increased levels of burnout in the health care industry have exacerbated staffing shortages, which may in turn negatively impact the quality of care practices are able to provide and further affect patient retention.
How providers can help drive change
Even people working in health care know how difficult it is to navigate the ins and outs of these expenses. Since patients are becoming the new payers, the complexities of health care payments coupled with low financial literacy means they often struggle to save, plan and budget for their health care needs. This knowledge gap does not have to exist, and providers can help fill in the cracks. While care teams should not take the place of professional financial advisors, your staff should be able to comfortably discuss managing costs with your patients.
Financial assistance programs, pre-tax savings accounts and financing plans can all help patients overcome financial barriers to care. These might all seem like obvious options to pursue, but poor financial makes it likely that many patients either are unfamiliar with these options or do not know how to access them. In fact, our Consumer Health care Journey research showed patients feel they have limited options when it comes to paying for their out-of-pocket expenses and say they would seek out more care if better options to pay for this care were available to them.
Because of this, it is a great idea for practice staff and physicians to proactively educate patients. Candid conversations around anticipated costs for care can help build trust between patients and their care teams, improving the overall patient experience. For patients who are looking to the future of their care, raising awareness around health savings accounts and flexible spending accounts might encourage them to reach out to their employers to learn more about setting up these accounts and what contribution matching, if any, is available to them.
Another helpful resource could be including phone numbers for insurance companies’ customer assistance lines or links to state and federal assistance programs on patient portals and alongside patient bills. Discussions around in-house and third-party financing are also important but should only be raised after all other options have been thoroughly explored.
All around, it is beneficial both to patients and practitioners to have greater access to payment options. For example, third-party partners can offer financing options aimed at helping reduce payment burdens as an alternative to in-house plans for practices that do not offer their own, or for patients looking for greater flexibility.
As health care access in the U.S. grows more complex, it is crucial that we provide avenues for people to pursue their health care without having to make sacrifices elsewhere.
Beto Casellas is executive vice president and CEO of health & wellness at Synchrony