price transparency, image of cash with stethoscope

Price transparency. Why is it so hard?

Trust. It is what every good relationship is built upon. Given this, many would agree that price transparency in the healthcare services field leads to trust and positive relationships between healthcare providers and consumers. This, in turn, should improve patient outcomes. Consumers have never truly known the price of their healthcare services in the United States while European countries have had price transparency for more than two decades.

The time for healthcare price transparency in the United States has arrived!

Now with some unlikely new players entering the healthcare space including Amazon, Walgreens, CVS Health, and Walmart, the secret pricing model that has held consumers hostage for so long is coming into the light in a literal race-to-market environment.

The new Walgreens “Find Care Now” platform lists cash prices for health care services” can connect you to local healthcare providers. In addition, many states are now requiring hospitals to post pricing online for their patients. This type of customer first approach benefits consumers by providing clear-cut pricing for various services.

The Walgreens application also helps direct patients on how to obtain the needed healthcare services at the appropriate most cost-effective environment. Also, it should prevent patients from seeking healthcare at hospital emergency rooms for issues that can be treated elsewhere. Providing “sensible alternatives to costly emergency room visits” as well as more specialized services like lab services or optometry just makes sense. However, this new approach to price transparency is not yet widespread.

Why is it so hard? 

The problem with providing full price transparency is caused in large part because prices can vary widely for the same procedure since every patient is different and complications can cause the cost of a service to rise significantly. SCL Health in Colorado helps to clarify this by posting an average cost for a procedure and a price range. “We did a range because there is so much variability and we did an average so folks would have both of those data points,” Christine Woolsey, the system’s senior vice president and chief communications and marketing officer said. “All of these prices can vary greatly depending on the medical needs of the patient and other services that they are prescribed.”

Technology 

Part of this new drive towards price transparency is the simple fact that it is made easier with technology. Today people have access to more information than at any time in the history of mankind. It only makes sense that the healthcare industry and the pricing of services would become more transparent. In addition to this plethora of healthcare information comes the consumer’s demand for automated price transparency tools. Expansive healthcare systems trying to increase market share in a competitive environment are eager to give consumers what they are seeking.

In many ways, the push for price transparency is becoming a prerequisite for providing healthcare. Many states now require participation in price reporting, including California, Texas, North Carolina, Colorado, and Florida. “In April, in an attempt to empower patients, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule requiring hospitals to post a list of their standard charges on the internet.”  So, if health care providers are not going in this direction yet, they soon will be. The shift appears inevitable.

Unfortunately, early studies show that consumers are largely not using the pricing tools yet…

Study after study has shown the same thing. Health plans report that use of their price transparency tools is limited, with many enrollees unaware they exist. The vast majority of plans now provide pricing information to enrollees, but only 2 percent of them look at it. Aetna offers a price transparency tool to 94 percent of its commercial market enrollees, but only 3.5 percent use it.

This underuse despite “about half of Americans search for price information before receiving care.” With this kind of disconnect, it’s clear there is a need for better awareness of the tools and education on how to use them.

It’s always better for your organization to be ahead of the curve and not behind it. Price transparency is becoming the new norm, and many consider it simply the right thing to do, and with today’s technology, it is much easier to educate consumers. Just make sure to spend time thinking about ways to bring awareness to your pricing tools and how to use them.

Sunlit Cove Healthcare Consultants

We provide management and consulting services to help healthcare businesses run efficiently. Navigating the dynamic and complex revenue cycle management is a challenge for many health plans, health care vendors, and providers. Our consulting services are available to assist with your day-to-day operations and provide expertise in growth and change management. We manage all aspects of your enterprise from the development of the revenue cycle management process to the completion of your business cycle.

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