The Affordable Care Act (ACA) continues to send shockwaves through the healthcare ecosystem. Included in the turmoil are patients who are now facing increased budget pressures due to higher deductibles and out-of-pocket expenses. To help minimize the blow, many patients are seeking pricing information from providers — before a service is performed, just as they would in purchasing a consumer good or service.
Yet, the Pioneer Institute stated that, when it comes to price transparency, healthcare consumers face numerous obstacles in trying to make educated decisions about how much their care costs, despite the ACA’s price transparency mandates. In fact, according to the Public Agenda’s 2015 report, “How Much Will It Cost? How Americans Use Prices in Health Care,” most patients do not know how or where to seek this data despite this demand. Among the report’s findings are the following:
-Most Americans are not aware that prices can fluctuate across healthcare providers. The report states that 57% of insured and 47% of uninsured Americans are not aware that physicians might charge different prices for the same services.
-56% of Americans say before getting care, they attempted to find out how much they would have to pay out of pocket-not including a co-pay-or how much their insurer would have to pay a doctor or hospital.
-Higher deductibles mean even more concerns about pricing. The report found that individuals with higher deductibles are more likely to have sought price information: 67% of those with deductibles between $500-$3,000, and 74% with deductibles greater than $3,000 have sought out price information before getting care.
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-69% said insurance companies should be required to make public how much they pay doctors for medical services.
-Among consumers who have not tried to find out a price before getting care, 57% said they would like to know the prices of medical services in advance, and 43% would choose less expensive doctors if they knew the prices in advance.
-When it comes to value, 71% of Americans say higher prices are not always an indicator of better-quality medical care.
-Among Americans who have compared prices across multiple providers, 62% believe that they have saved money.
-82% of those who have compared prices across multiple providers say they will do so again in the future.
As the healthcare industry evaluates ways to improve price transparency, one of the many options being evaluated is the implementation of bundled pricing programs. These programs create opportunities for payers and providers to team up to deliver quality services and provide transparency to patients.
What Payers Can Do
Comparative analytics based on episodes of care is a powerful way to give control back to patients and help keep the market competitive. Comparative analytics delivers pricing transparency that patients can use to reduce their out-of-pocket costs. Ultimately, these tools help payers, providers and patients maximize every healthcare dollar spent. Payers can begin to monitor costs by unique episodes of care, by the components that make up that episode.
By examining historical claim data and grouping costs by episodic procedure and normalizing those procedures to weed out any abnormalities or billing inconsistencies, plans gain valuable insight into actual prices. By applying these pricing performance analytics, payers can further reduce costs within their consumer-driven models and focus more on value-based choices.
What Providers Can Do
Providers can deliver price transparency by partnering with payers to take advantage of bundled pricing. Providers can help establish more sophisticated means of dividing and sharing payments amongst various episode stakeholders. A bundled pricing strategy also creates incentives for providers to become more efficient and cost-effective in their care delivery. As more and more consumers begin to shop for their healthcare services, providers who fail to offer high-quality and high-value care may lose revenue if their patients elect to shop for a more price-friendly, in-network alternative.
As patients’ expectations for healthcare shifts toward a more consumer-centric model, traditional healthcare will need to shift as well to provide more streamlined access and delivery of care to their customers. Price transparency is just one way to meet this demand-payers and providers will need to implement traditional consumer-based practices into their operations for this to be possible.
Brad Hill is vice president of payer solutions at RemitDATA.