Amidst the complexity of the U.S. healthcare system, price transparency has been a long-standing issue for patients and providers. Two years after the implementation of the Hospital Price Transparency Rule, it's clear that progress has been slow.
Since then, research shows that compliance rates among the nation's largest health systems have been less than optimal, with only 24.5% of the 2,000 U.S. hospitals adhering to all the rule requirements.
That said, there are numerous benefits of price transparency in healthcare. Price transparency empowers patients to make informed choices about their health and well-being, while improving competition and value in the healthcare industry.
In this article, we'll explore how price transparency benefits patients and providers and advocate for a healthcare ecosystem that prioritizes transparency, accessibility, and affordability.
What Is Price Transparency in Healthcare?
Price transparency in healthcare refers to the practice of making healthcare costs visible and accessible to patients before they receive treatment. It includes providing patients with clear and accurate information about the cost of medical procedures, tests, medications, and other healthcare services.
Price transparency is important because it empowers patients to make informed decisions about their healthcare. It enables them to compare prices and quality across different providers. It also promotes competition in the healthcare market.
With greater price transparency, patients can avoid unexpected medical bills and better manage their healthcare expenses. Price transparency can also lead to increased accountability among healthcare providers, as it encourages fair and competitive prices for their services.
Benefits of Price Transparency in Healthcare for Providers
Price transparency brings significant benefits to providers. These include:
- Increased upfront collections
- Reduced bad debt
- Greater patient loyalty
- Standing out in the local market
In the following sections, we will delve into these advantages in depth.
Increased upfront collections
Patients are more likely to pay upfront when they receive an itemized list of costs before their healthcare visit. This is because they are well-informed of the services and products they're paying for and can budget accordingly.
Hospitals that have implemented this practice have seen exceptional results. For example, The Health First hospital system provided all their patients with estimates in advance and experienced a 27% increase in upfront collections. This resulted in a 2.7% net revenue in point-of-service and secured over $2 million in upfront collections.
Reduced bad debt
One of the most notable advantages is a reduction in bad debt. By implementing strategies that ensure patients have clear paths to payment, providers can mitigate financial losses due to unpaid bills. However, this process is not always straightforward, as it involves multiple complex elements.
Addressing patient collections requires a multifaceted approach, which may involve data segmentation and setting up appropriate payment plans.
Greater patient loyalty
Price transparency in healthcare can have a significant impact on patient loyalty. According to recent studies, approximately 90% of patients say their loyalty relies on a positive financial experience as a patient.
Many patients experience ambiguity and dissatisfaction with the bill pay process and their financial experiences. The thing is, many patients would be willing to pay a premium for a price guarantee. Many agree they would pay their out-of-pocket fees before their appointment if it meant they could get a price guarantee.
Stand out in local market
Recent studies have shown that 60% of patients are more likely to choose a provider who publishes their prices compared to the rest of the market. Patients are often unaware of how to compare costs accurately, leading to fear and distrust of the healthcare system.
Implementing transparent pricing can alleviate these concerns and engage consumers by giving them the information they need to make informed decisions.
Benefits of Price Transparency in Healthcare for Patients
Just as price transparency in healthcare can greatly benefit providers, it can also empower patients to make informed decisions about their care. Here are some of the benefits patients can reap from transparency.
No surprise bills
When patients are aware of the cost of medical procedures and services upfront, they can make informed decisions about their healthcare options and plan accordingly.
Some patients have high deductible plans, while others must pay for their medical expenses out-of-pocket. For such patients, knowing the cost upfront can be a tremendous relief. That information alone can help them make informed decisions on their healthcare options.
Makes it easier to comparison shop
With access to upfront pricing information, patients can make informed decisions about where to seek medical care. They can compare prices among healthcare providers before even stepping through the door. With this kind of transparency, patients can choose providers that offer what they need at prices they can actually afford.
This transparency empowers patients and gives them more control over their healthcare spending. It also allows them to budget accurately for medical expenses, which is vital for those with limited financial resources.
More affordable healthcare services
One of the main advantages is the potential reduction of overall health costs. In New Hampshire, for example, a state-wide online price transparency database revealed a 3% decrease in the total cost of medical imaging procedures over a span of five years. This led to savings for both insurers and consumers, especially those with a deductible.
These findings signify the importance of transparency and how it can positively impact patients' healthcare experiences. Transparency leads to more affordable healthcare services for patients as they can find a more cost-effective alternative to a particular treatment or choose a cheaper facility. Pricing information empowers patients to take control of their healthcare expenses.
Unlock the Benefits of Transparency With MD Clarity
In healthcare, transparency is often valued but difficult to achieve. That's where MD Clarity comes in with our innovative Clarity Flow product. With Clarity Flow, you can provide patients transparency while boosting your financial performance at the same time.
Compliance with the No Surprises Act’s good faith estimate requirements is made easy, and you can significantly reduce bad debt. If you're ready to take your healthcare organization to the next level, schedule a demo today.