We’ve written before about hospital pricing transparency, and though a number of advocacy groups, state governments, and think tank analysts have outlined the problem and proposed solutions — it persists. Is it even possible?

Is Hospital Pricing Transparency possible?

When it comes to hospital pricing transparency states want to see it, but few hospitals are able to implement true price reporting.

As Healthcare Finance reported last year, “The majority of states could be doing more to make price transparency the norm and enable educated healthcare choices for consumers, according to a joint report from the Health Care Incentives Improvement Institute and Catalyst for Payment Reform, two independent health policy groups.”

Most of the articles we read focus on consumer based pricing transparency where, say, a prospective patient can compare the cost of a hip replacement at local surgery centers.  But in a related article, RevCycle Intelligence has observed that in a three hospital test, where the price for tests were “transparent” to hospital staff, orders stayed the same or went up.  According to the journal that did the study (JAMA Internal Medicine), the study focused on answering the question, “Does increasing price transparency for inpatient laboratory tests in the electronic health record at the time of order entry influence clinician ordering behavior?”  The difference between clinicians and prospective patients in one phrase is “out of pocket expenses”, or deductibles.  So it is no surprise that the authors of the JAMA study conclude, “these findings suggest that price transparency alone may not lead to significant changes in clinician behavior, and future price transparency interventions may need to be better targeted, framed, or combined with other approaches.”

A recent survey conducted by the Pioneer Institute, as reported in the Lowell Sun, has found that “Learning the price of a medical procedure from Massachusetts health-care providers remains ‘a daunting and frustrating experience’ that ‘reflects poorly on the commonwealth’s providers and regulators,’ the Pioneer Institute found in a new report on hospital pricing transparency and variation.”  The article reports that the Pioneer Institute requested the undiscounted price of an MRI on the left knee of a self-paying patient, and also sought information on the discounts hospitals may provide to self-paying patients.

During the pricing transparency study investigators learned:

  • That “estimates ranged from $1,061.22 at Morton Hospital and Medical Center in Taunton to $8,447 at Massachusetts General Hospital in Boston.”
  • The time required to receive price information varied from five minutes to more than one week, and that “of the 21 hospitals surveyed last year, nine provided Pioneer Institute researchers with the cost of the procedure within the statutorily-required two days and 12 took longer than allowed by law.”

In the video below, Barbara Anthony, senior fellow at the Pioneer Institute, and former chief patient advocate for the state of Massachusetts explains the rationale behind her group’s advocacy of hospital pricing transparency.

Meanwhile the states keep driving for more transparency.  A story out of Ketchikan, Alaska this April in the SIT News details how, “the Alaska House of Representative passed legislation to empower consumers by requiring health care providers and facilities to post a list of the prices for the most commonly provided procedures.”

That’s the ongoing story, it seems — the states and the people want transparency while providers continually have trouble providing it.  Rick Abramson writing in The Tennesean, has one possible cut at an answer.  Reports Abrahmsen,  “Unfortunately, comprehensive and standardized quality information for MRI doesn’t really exist, at least right now. There are not enough reliable, understandable, consumer-friendly measures of MRI quality to bundle into a website like Healthcare Bluebook.  This is true for many other medical services beyond MRI. For much of health care, we just do not have the appropriate tools to measure quality. This deficiency persists despite the efforts of the federal government and private payers to tie health care reimbursements to quality metrics. And so, for many medical services, patients consulting an online provider comparison website will often find information only on price.”

When it comes to managing the hospital revenue cycle, the weather can seem a bit stormy lately!  Join us on May 24, 2017 for our webinar “Weathering the Storm: Best Practices for Patient Collections,” where Nick Davis, Product Manager for our Patient Access Modules will discuss best practices & tactics for successfully increasing patient collections.

We also know there are a lot of variables that factor into pricing estimation, because one of our Access Management modules focuses specifically on providing such estimates for hospital patients.  We know from experience that patients who are uneducated about their financial responsibilities are less likely to pay.  You can request a data sheet about this module here.

In closing, the Becker’s Hospital Review people at a subsite called “Becker’s Spine Review” have four insights for successful implementation of price transparency.  They report that the keys for revenue cycle teams are: developing a fee schedule; capturing patient information (up front); re-engaging with patients (tag self-paying patients in your database); and freeing up the front staff to do estimations.