The No Surprises Act of 2020 went into effect in January, delivering a message to doctors and hospitals that enormous, unexpected charges after the fact are no longer acceptable — and leaving many providers wondering how this sweeping legislation would affect their bottom line.
This might be a boon for consumer financing alternatives, which have proliferated in recent years because installment plans and payment arrangements provide people who know what they owe a way to deal with rising healthcare costs.
CareCredit, like other financing options in the market, works like a regular credit card as long as it is used for healthcare.
Synchrony Senior Vice President and General Manager of Health Systems Shannon Burke said that the company has quickly expanded to include adjacent health services — cosmetic, vision, and audiology — and crossed over to cover other specialties, along with primary care and now wellness — and crossed over to cover other specialties by 2018.
Burke feels that, given the present economic and health concerns, now is a good moment for hospitals and providers to embrace healthcare financing.
“If we only assume that $400 billion will be paid or owed out of pocket, that’s a lot of money there,” Burke remarked.
Increasing Demand
Given the amount of news and attention paid to America’s stumbling healthcare payment system, Burke is surprised that financing still appears to be a novelty.
It’s easy to forget the last time (if ever) a physician or medical provider gave you a financing option at the point of service or through an online patient portal. Most consumers say “never,” and that must change if providers are to earn any substantial portion of the $400 billion.
With almost 13 million active CareCredit cardholders and the firm intending to develop in the future, Burke admitted that the total addressable market (TAM) for healthcare finance dwarfs that figure.
“That was primarily due to the lack of coverage on the specialist side.” “It was evident that money was a factor,” she explained. “It is [this] progression that is so crucial for people to realize why they need to think about finance.” I just found myself with a significant out-of-pocket expense. It is just what happens now, even if it is not voluntary.”
Furthermore, she claims that the lack of payment choices in healthcare, at least until recently, is illogical in light of the pandemic digital change.
“If I find myself with a large debt,” Burke explained, “I want a mechanism to pay for it.” “I see everywhere else in my life, and I should see it everywhere else in my life.”
Believe in the Balance
Burke said that an awareness and education component is still in the works to increase CareCredit’s 13 million members.
Despite working in healthcare finance for many years, she comes from a generation that was taught, “‘This is a dialogue that happens aftercare with the back-office employees that I contact on the 800 number.” She’s come to learn that this is a different conversation.
