Price Transparency in Healthcare

Transparency is key in many factors in life. As consumers, we want the full spectrum of information when it comes to what we are buying, what it includes, and how much it will cost us. In healthcare, this is NO different. Price transparency in healthcare is important for many reasons, both to providers and patients. Before we dive into why price transparency in healthcare is so important, let’s define price transparency.

What is price transparency in healthcare?

The Association of American Medical College, or AAMC, defines price transparency in healthcare as the following “…readily available information on the price of health care services that, together with other information, helps define the value of those services and enables patients and other care purchasers to identify, compare, and choose providers that offer the desired level of value.”

They also state that value in healthcare is directly related to the quality of health care services provided to the patient in relation to the overall price of the services (AAMC). Price transparency is critical for consumers to assess the overall value of services to their overall satisfaction from their provider or clinic.

What are the benefits of price transparency in healthcare?

Price transparency has the ability to shift many things in your practice’s office – the affordability of healthcare, customer satisfaction levels, the emphasis on value, and more. Let’s get started.

Addressing Affordability

As a healthcare provider, how many times have you heard a patient ask, “How much will this cost?” If you haven’t heard it, it is like that another member of your staff has. It has likely been from a patient about to receive a substantial surgery, service, or procedure that they expect their insurance won’t fully cover. Without price transparency tools, the price of these services is often not available for these patients until week’s after a procedure is completed. By then, they are already hooked to pay that cost, often which they can’t afford.

Price transparency in healthcare allows for providers to inform patients of what the cost of procedures are prior to completion. Now, often this is a difficult request for providers seeing as overall cost is often dictated by the insurance carrier, part of the country, or even neighborhoods within an area the practice or patient is in. This hurdle is being addressed slowly, but it requires a provider and insurance carrier to work together to provide an accurate estimate.

For those working in hospitals, the Affordable Care Act made it mandatory for “chargemasters” to be published as of January 1st. These promote price transparency. This promotes affordability by making comparable health clinics in the region compete based on price which inevitably drives costs down. To add to this, consumers have the option to seek out affordable care options for themselves if the information is available. (Note: Physicians state that price transparency has often led to patient’s not receiving necessary care at all. It goes without saying this often leads to even worse health outcomes. On the other end of this, patients are aware of the cost they could incur and have the opportunity to plan and save money to have the procedure later (hopefully before an adverse health outcome occurs).

Patient Satisfaction

According to a survey performed by HealthEdge, 88% of consumers want providers to relay information regarding their overall financial responsibility. Whenever this information isn’t available, it can play into their overall satisfaction with their practice or provider. It is important to note here that most patients look for transparency for services that incur larger charges. This can include services like MRIs, CAT scans, surgeries, and other large scale procedures.

Lower satisfaction rates typically are a result from lack luster customer service, poor communication, lack of trust with their provider, and feeling like they are wastefully spending money. If price transparency conversations had been taken prior, all of these hard feelings towards a care provider may have been avoided. Then, the consumer could have made a decision on how to proceed with their own healthcare prior to receiving care. Technological tools like cost estimators could bridge that gap without providers having to put in extra work.

Promoting Value in Price Transparency

When presented with price transparency in healthcare, at times, patients opt to walk away all together from treatment. Many providers are able to work with patients when it comes to cost with sliding fee schedules, or payment plans. This enables patients to receive the care that they need while making payments that work with their budget. A practice able to show flexibility often shows that they care about their patients. This provides a patient with a better sense of value in the care that the practice is willing to provide them with.

Providing your patients with a sense of value in the care that you provide prior to services rendered can be a challenge. However, it is not impossible. What benefits will this bring them? What type of challenges will they no longer face? As an example, if a patient is going to receive hip replacement surgery, it is likely that over the course of several months that they will be able to move more freely and experience less pain. Explain that value to them and how their quality of life will improve. Price transparency in healthcare leans on providing value, and when prices are high, sometimes that means explaining how the benefits truly are going to provide an abundance of quality for the patient (and how you can supply that as their provider).

Is your practice looking into technological tools to improve price transparency in healthcare? Many clearinghouse partners have cost estimation tools that can help, check with yours today.

Are you looking for more information on price transparency or the tools that MicroMD has available for MicroMD Clients? Contact us today to find out more at 800.624.832. or visit us at micromd.com.