Synchrony Health & Wellness CEO Beto Casellas speaks with Yahoo Finance's Anjalee Khemlani about health care costs and why it's so expensive in the U.S.
SEANA SMITH: Americans with employer-sponsored health insurance may still owe more than $320,000 in medical bills in their lifetime. That's according to a new study by financial services company Synchrony. Now, that number more than doubles to $700,000 for Americans who purchase their own insurance or who suffer from chronic illnesses. The study also revealing many people underestimate their annual health care expenses. Yahoo Finance's Anjalee Khemlani spoke with the CEO of Synchrony Health & Wellness about that survey and Synchrony's involvement in the financial side of health care. Let's take a listen.
BETO CASELLAS: We've been in lending for over 90 years. And in Care Credit, we've been doing it for 35 years with over 260,000 providers. So we have a unique perspective that we know about lending and financing, but we also know a little bit about health care and are very much in tune with what's going on in the market. And we thought it was important for us to bring forth a greater awareness around saving for health care.
Just like you look at mortgages, just like you look for college education, you save for those. Health care is a big expense. And the survey found out that Americans that are insured can spend up to $320,000 in a lifetime if they're insured in out-of-pocket expense. The other thing that was really brought forth this study was the fact that most surveys said that they were spending $850 a year on out-of-pocket expense, when in reality, they were spending $2,100.
So the fact that they're underestimating the expense of health care brings forth certain breakdowns around saving in advance, being able to pay for the care that you need when you need it, and being able to bring that forth a lot more into the eyes and minds of individuals out there to really get the care that they need when they need it, rather than delay the care. Because that's the consequence here.
ANJALEE KHEMLANI: Right, and we've talked about that, where people will not necessarily think about the fact that they should go for the care because the price of it, the cost of it to them and to their pocketbooks really hurts, even if they're insured. We've seen over the years, more and more of the burden is placed on the patient. And so those costs really start to add up.
Now, I know that Synchrony, like you said, has been in the lending business. Tell me about what sort of programs are out there as an option for patients who may not be able to immediately pay for things, but also don't want to go into debt, because we know medical debt is one of the highest, especially in this country.
BETO CASELLAS: Yeah. You know, we believe that the first thing about this study was to bring the awareness up. I think, what can we do about it? Number one, as consumers, obviously having healthy practice in terms of being able to eat well, going to the doctor, being able to do all that. That's all common sense out there that people should apply for. But I think in terms of the financing piece, it's really greater awareness on savings. And there are multiple options out there.
Health savings accounts, flexible savings accounts, those are things that now they're in open enrollment period, where companies right now are enrolling their employees. Important for people to think about HSAs. Important for people to think about FSAs. If you need to even save more, there's ways to perhaps save on a high yield savings account, which, like, Synchrony Bank does and other institutions do as well.
And so bringing that awareness of being able to say, you know, I'm going to save for health care. I'm going to save for my own health and wellness. I'm going to make health and wellness an important part of my life. And with it, I'm actually going to be savings against that. So if I have a future breakdown, I'm better equipped to be able to survive that or be able to say yes to whatever the doctor is telling me to do.
ANJALEE KHEMLANI: I'm going to be a philosophical one here. I mean, the idea that people have to think about savings the way that they do for college, right? We think about college as a way to better your life and better your career path. So if we're now saving for health care too, that's so much for patients to have to pay attention to. Isn't the problem also that the cost of care is too high? So--
BETO CASELLAS: Yeah, I mean, the cost of care is high, and it's one where it's very complex. There are multiple organizations around it, whether it's manufacturers, whether it's doctors, providers, consumers. The government is involved in all of this. And I think we all have to work together towards making that where it's going to be an evolution of all that.
The reality is, I think we need to provide more alternatives for consumers to make a choice. And so bringing forth patient financing solutions like Care Credit, being able to provide alternatives where you're able to save in a tax advantaged way like HSAs and FSAs, being able to save after-tax dollars in high-yield savings accounts, those are things that we can take control as individuals, as patients, as consumers, in being able to do that so that you can open up possibilities in the future for them to be able to get the care that they need when they need it.
ANJALEE KHEMLANI: So ideally, in an ideal world, if health care costs goes down, does Synchrony then not have a part to play in health care?
BETO CASELLAS: There is still going to be opportunities for doing things. People still want to care for their bodies, and there are multiple ways that, in the wellness category, that people want to do as they get more ingrained in what kind of procedures, what kind of practices they want to be involved. There is always an opportunity for paying out-of-pocket expense and choice for the consumer to be able to do that.
If you do that, then there is an opportunity for being able to bring flexibility of payment on that and paying over time for those individuals that want to pay over time and take the advantage of being able to pay every month versus a one-shot deal, which they may not be capable of being able to do that.