Synchrony Financial's Senior Vice President and CareCredit CFO Chris Morris spoke to Becker's Hospital Review on what CareCredit can do to help a hospital overcome its revenue cycle challenges.
Question: Can you start by talking about your background and work at CareCredit?
Chris Morris: I have worked in the technology and financial services industries for my entire career. I have been with Synchrony for 14 years and spent the last 10 years as CareCredit’s CFO. I have all the typical responsibilities of a CFO, but I spend most of my time working as a business partner with our CEO, Dave Fasoli, and our sales and marketing leaders. There is high demand for our services, and CareCredit is a great brand. It’s been a rewarding place to work.
CareCredit is one of three business platforms within Synchrony, the market leader in issuing private label credit cards. CareCredit has roughly $9 billion of loans outstanding, $2 billion in revenue, more than 11 million cardholders and an acceptance network encompassing more than 210,000 providers and retail locations.
Q: What is the most challenging part of the revenue cycle for hospitals?
CM: I will focus on getting paid by the patient, since that is a growing concern for hospitals and healthcare providers, and the issue with which I have the most experience. The growth of healthcare consumerism and the “patient as payer” are two of the biggest challenges facing the industry. In general, we’re seeing patients today bear a much greater responsibility for the costs of their care than has been the case historically. For providers, collecting payments from patients is one of the more challenging aspects of the revenue cycle. The process ties up a lot of resources, and unfortunately, not all bills get paid.
Patients often do not have adequate funds on hand to pay for healthcare, so providing financing options for this growing out of pocket expense makes sense. CareCredit has focused on solving this problem for healthcare providers for more than 30 years. We offer a non-recourse solution, so we take on the risk of loss, along with handling all billing and collection associated with the financing. We’re also a compliant solution, which helps provide peace of mind to both providers and patients.
Since we focus on patient financing and payments, we have developed expertise in all aspects of the lending process. When evaluating applications for credit, we have robust algorithms and proprietary scorecards to help us optimize our ability to meet the amount requested. When it comes to transactions, we have developed tools to help us detect and prevent fraud and securely process purchases and payments. On a less technical but equally important note, we maintain dedicated call centers for provider and cardholder inquiries and our customer service reps are trained to be aware of the sensitive nature of conversations involving health and financial information. All of this enables us to partner effectively with hospitals and other care providers who want to provide a flexible payment option to their patients, but lack the specific expertise, time, or resources to develop these kinds of solutions themselves.
Question: What can providers do to improve patient collections?
CM: There are three stages when hospitals and providers can collect payment from the patient:
- Pre-encounter
- Day of service
- Postprocedure billing
The most progressive providers discuss payment options during the pre-encounter stage, either at the time of the initial consultation, or even beforehand. These providers often have marketing available to make patients aware of financing options. This is successful because these providers recognize the availability of financing can help attract patients and make it easier to move forward with the full recommended treatment. According to our own survey data, 66 percent of providers said offering CareCredit increased the number of patients accepting the complete treatment, and 47 percent said their revenue increased after offering CareCredit1.
Another effective stage to collect payment is at the time of service. Payment is made at the time of service when the patient is not under duress due to medication or discomfort. Financial policies requiring all or some payment at the time of service are not always possible, but can be ideal for elective or planned procedures, where out-of-pocket expenses can be reasonably estimated.
Lastly, billing after the procedure is the traditional way to get paid. Many times, the provider elects to wait until after insurance adjudication to determine the patient’s portion of the bill. We find that write-offs are twice as high in these cases, when payment is not requested until the postprocedure billing stage2. Even at this stage, providing financing options can vastly improve collections while providing a service to your patient base.
As cost estimators that calculate insurance contribution improve and point-of-service payment solutions become more prevalent, providers will be able to collect more payments in advance or at the time of service, rather than later in the revenue cycle. Collecting payment as early as possible during the patient’s journey is the best way to improve collections.
Q:What is CareCredit doing to innovate and continue meeting providers’ and health systems' needs?
CM: Most of our innovation focuses on making the payment process simpler and easier for both patients and providers. For example, we recently released a new version of our Quickscreen service. Planned procedures are scheduled in advance, so providers can send us a list of their upcoming appointments, and we can quickly screen the list and tell each provider which of their patients are good candidates for financing.
We also have a solution called CareCredit Direct, which is web-based software that can be downloaded to a dedicated tablet or PC for patients to learn about promotional financing options. They can even apply for the CareCredit credit card right from the waiting room, and receive a credit decision immediately. These features directly respond to shifting expectations for a more retail-like healthcare environment, providing greater flexibility to consumers, protecting patient privacy and relieving the burden on providers to manage billing and collections paperwork.
References
1 Healthcare Payments Benchmark, August 2018, conducted for CareCredit by Chadwick Martin Bailey
2 Based on CareCredit’s own internal analysis
For more than 30 years, CareCredit has provided a valuable financing option for healthcare treatments and procedures insurance typically doesn't cover either in part or in full. Cardholders can also use the CareCredit health, wellness and personal care credit card to pay for deductibles, co-payments and other out-of-pocket costs. Providers who accept CareCredit receive payment in two business days.