When you think of financial literacy, what comes to mind? Maybe your first thought is knowledge of the stock market and investments, or maybe it’s how to do your taxes, but the reality is less specific. Financial literacy is the ability to understand and effectively manage your financial resources. For you as a leader, this of course reflects how you choose to manage the costs of operations for your practice, but what about your patients? What does financial literacy mean to them and why should it matter to you?
With patients, financial literacy largely comes into play with their personal expenses and how they choose to budget, save and pay for their care within the context of insurance coverage, health savings accounts (HSAs), flexible spending accounts (FSAs) and other tools – all of which vary based on factors like employment status and coverage type. Unfortunately, we know that as the costs of healthcare have risen, patients are finding it harder to afford care regardless of their age, insurance status and income. The Kaiser Family Foundation found that about half of U.S. adults have difficulty affording healthcare costs.1 Likewise, the 2022 Lifetime of Healthcare Costs in the US (LOHC) study conducted by CareCredit, a Synchrony solution, found that 80% of patients don’t have a dedicated savings account for unexpected healthcare costs and even among those who do, nearly half (49%) say it’s not enough.2
Preparedness is evidently low, and providers have noticed, with more than half (59%) rating their patients’ financial literacy as poor, according to results from a CWH survey.
How does this impact your practice?
Healthcare unaffordability and a general lack of dedicated savings by patients means that when they are faced with high costs, they are left with very few options for payment. Unfortunately, the LOHC study found that this meant patients ended up voluntarily delaying or ignoring recommendations for care, with more than half (51%) of Gen Z-ers (Ages 18-27) saying they’d hold off on care even if it cost less than $1,000.2 Perhaps it’s not surprising that this demographic was also found to have the worst financial literacy, with more than two-thirds (68%) self-reporting that they do not have a good understanding of healthcare expenses.2
We know that when patients have to delay care, providers are impacted too. With costs being a significant factor for patients, your practice is directly affected when patients feel they don’t have the resources or options to pursue care. As a result, you could see shrinking patient pools and delayed time to payment. This coupled with the fact that many commercial payers already delay reimbursement for three months or more, means your practice can start to feel a financial squeeze.4
Your staff is your solution
Working with your team to ensure they understand the importance of discussing care costs with patients before, during and after their time at your practice can help patients accept your care recommendation. According to the International Journal of Environment Research and Public Health, increased patient engagement with their care teams can not only ensure patients receive quality care, but also can help providers build and maintain clientele.5 So what can you relay to your team to make sure these conversations are happening?
Prioritize transparency where possible
If it’s feasible, encourage your team to communicate expected costs from the time your patient enters your practice. Consider implementing policies for administrative staff to report any expected co-pays or past due balances ahead of care, so that patients don’t end up with a surprise bill down the line. Additionally, staff should feel comfortable communicating which procedures or treatments may cost extra or may not be covered by typical insurance before they discuss next steps with patients so that care plans can be adjusted from the get-go.
Provide educational materials
Many patients may not know where to start when it comes to discussing finances with providers, so providing educational materials for patients to take home to help facilitate these conversations may be a valuable asset. Pamphlets and handouts can go a long way in helping patients prepare for their next appointment by equipping them with the knowledge to reach out to their insurance companies, learn about public assistance programs or ask their doctors about flexible payment options.
Another helpful tool to have in the office is a conversation guide or questionnaire that staff can share ahead of an appointment to help patients start these discussions.
Discuss financial options
Teams can help patients address affordability concerns by discussing their payment options. Practice staff and materials available in the office should readily direct patients towards their state/federal assistance programs, HSAs/FSAs, health insurance, and financing options, both in-house and third-party. Offering payment solutions such as Synchrony’s CareCredit health and wellness credit card can allow patients to spread costs across monthly payments that help fit into their budgets. When patients understand their costs and financing options ahead of time, it can help them manage costs and help your practice receive timely payments.
As a financial solutions provider, Synchrony’s CareCredit offers a wide range of educational resources for consumers, such as information about the cost of healthcare procedures, solutions to pay for out of pocket care expenses, and opportunities to ask questions of care experts on the CareCredit Well U health and wellness blog. Resources for patients can be found at www.carecredit.com/well-u/ and while your team works on developing their own educational resources, patients can be directed there.
Having these financial insights and a flexible financing option at their fingertips can help patients feel empowered to make informed decisions, which can help them move forward with their care. All while helping improve financial literacy and helping build trust in your practice and care teams.
To learn more about how integrating CareCredit as a third-party financing partner can help empower your organization and your patients, visit www.carecredit.com/chiefhealthcare.
This content is subject to change without notice and offered for informational use only. You are urged to consult with your individual advisors and/or medical providers with respect to any information presented. Synchrony and any of its affiliates, including CareCredit, (collectively, “Synchrony”) makes no representations or warranties regarding this content and accepts no liability for any loss or harm arising from the use of the information provided. Your receipt of this material constitutes your acceptance of these terms and conditions.