“Despite state, provider and insurer efforts to shine a light on prices and quality in healthcare, some corners of the industry remain dark.” — from “Achieving transparency in healthcare“, in Modern Healthcare
Why are we still in the “dark” when it comes to healthcare pricing transparency? The article quoted above has some well-researched ideas about this, but in the end, their opening summation remains true: “Like Baylor, many other healthcare organizations, from providers to insurers, are working to increase price transparency for the services they provide, to varying degrees of success. The push to bring transparency to healthcare pricing and quality has been going on for years, but still, the industry undoubtedly remains one of the nation’s most opaque. The scarcity of price and quality information is often blamed for the high cost of care.”
Some states are performing better than others as a result of legislative action. Earlier, we reported about the state price transparency report cards that were in play, but only a handful of states did well. As the company behind the report cards (Catalyst for Payment Reform) states, there is no progress without objective measurement. Still, for those states that did score well, the evidence of transparency for consumers is in full view on websites like Compare Maine Health Costs and Quality. In the example below, the website was able to report the state average for a knee replacement surgery, then give actual costs of medical facilities across the state.
American Hospital Association Backs Healthcare Pricing Transparency
Meanwhile, Gainesville.com is reporting that “Florida hospitals are battling back against a pair of proposed ‘transparency’ rules requiring hospitals and ambulatory surgical centers to provide information to patients and prospective patients about potential costs of treatment.” The Florida Hospital Association is leading the fight against the transparency rules, so we wondered what the AHA — American Hospital Association’s — position on the matter might be. According to the AHA website, Community Connections, “With the rise in higher-deductible health plans and coinsurance, Americans are paying an increasingly greater proportion of their health care costs out of pocket. This means that consumer demand for meaningful and transparent price information will only continue to grow. To meet this demand, hospitals and health systems must take a critical look at where they currently fall on the price transparency spectrum and take steps to improve how they communicate pricing information with patients and their community.”
The AHA has also prepared a guide (PDF) on “Achieving Price Transparency for Consumers: A Toolkit for Hospitals”. In the kit, tactics are advocated to train staff to help patients understand procedure costs. At the SSI Group, we applaud this stance and are pleased to offer our own pricing estimation module as part of our Access Management toolset.
“My father had no idea how much my mother’s treatment would cost, how much of it would be covered by insurance, if there were alternative treatments that would be covered, or how we would pay for treatments that weren’t covered. Forget about negotiating — how could he negotiate about something whose price he didn’t know? No one explained the options for payment.” — from an opinion article by Anahita Nakhjiri in StatNews on, “If prices are kept hidden, consumers can’t take more responsibility for their health care costs”
The AHA guide also provides several health system examples like Baptist Memorial Hospital, which offers patients an “expense navigator”. According to their website, Expense Navigator is “an out-of-pocket medical cost estimator tool, as part of our effort to be a national leader in healthcare price transparency.” Using the tool, you can get a customized estimate for your care at Baptist Memorial Hospital-Memphis and other Baptist hospitals in West Tennessee, Mississippi, and Arkansas.
But HealthExec had a story this past August illustrating how most hospitals are lagging behind the leaders like Baptist Memorial. Citing the “2017 State of Consumerism in Healthcare” report from Kaufman Hall which reviewed 125 hospitals and health systems, they observed that “pricing was the area where the report found consumer-based strategies most lacking. The report found few organizations are implementing new price transparency efforts like listing prices on their website (22 percent), offering an out-of-pocket price estimate tool (20 percent) or contracting with cash market websites (2 percent).”
Does Healthcare Pricing Transparency Work to Lower Costs?
We found some research suggesting that patients do not use pricing tools much — yet. Still, more evidence shows this is an awareness problem, and that those with high deductible plans are ready and willing to compare price information. Smart Business reports that “a 2014 study published in the Journal of the American Medical Association found that allowing patients to access price information for several medical procedures before obtaining health care services could lead to lower health care costs. The study targeted medical claims paid by employers on behalf of their employees after a price transparency tool was made available to them. The costs for employees who utilized the price transparency tool were lowered by 14 percent for lab tests, 13 percent for imaging procedures and 1 percent for office visits, in comparison to employees who didn’t use the tool.”
So where are we on health care pricing transparency? Looks like things are continuing to move at a snail’s pace even though some states and hospitals are figuring out better ways to provide estimates for patients. Reports continue to surface showing how this positively affects the revenue cycle with consumers more likely to budget and pay for care with an accurate upfront estimate. We’ll check back on progress periodically.