With the rising cost of healthcare, patients are increasingly looking for ways to save money on their care. At the same time, providers are looking for ways to gain a competitive advantage by attracting even the most price-sensitive patients. One way to address both of these goals is by adopting healthcare price transparency solutions.
Healthcare price transparency solutions help patients make informed decisions about their care by knowing what they will owe. With these solutions, providers can build better relationships with their patients and increase the likelihood of receiving full payments for their services. Price transparency is also a powerful way for healthcare organizations to differentiate themselves.
Here is a closer look at why you shouldn’t wait too long to adopt price transparency tools in your healthcare organization.
The Necessity of Price Transparency Solutions in Healthcare
There are various reasons why you should consider implementing healthcare price transparency solutions. They include the following.
Patient Consumerism Forces Practices to Adopt Transparency to Become Competitive
Today's patients are better equipped and want to take more control of their healthcare. They have access to a wealth of information online and are no longer afraid to comparison-shop for the best value. A Deloitte study showed that 60% of patients are more likely to choose a healthcare provider that prioritizes transparent prices over local competitors that do not.
When clients’ interests are at stake, a practice should offer features that persuade them to remain with the organization instead of switching providers. Healthcare price transparency tools are one way to provide this type of customer service.
Most large healthcare organizations already realize the value of price transparency in helping them attract and retain patients. A recent study showed that 86 of the 100 highest-grossing hospitals provide a price estimate tool to their clients. As patients continue demanding more involvement in their healthcare, it's no longer a question of if your practice should offer price transparency solutions, but when.
Price Transparency Rules and the No Surprises Act: You Don’t Have a Choice in Some Cases
With the No Surprises Act coming into effect in January 2022, your healthcare organization should provide transparent price estimates to patients. The goal is to prevent surprise medical bills when patients receive out-of-network care.
One of the act's provisions, the Good Faith Estimate requirements, requires you to provide a comprehensive estimate of prices charged to non-insured and self-paying patients. Failure to comply with the No Surprises Act’s requirements can result in a penalty of up to $10,000 per violation. With such penalties, investing in healthcare cost transparency solutions is more cost-effective.
Patient Rights Advocate reported that only 16% of hospitals were complying with the price transparency rule by August 2022. The low compliance rate is an opportunity your practice can leverage to gain a competitive advantage. By the time other practices start looking for ways to comply, you will have already established your healthcare organization as a price transparency leader.
How Price Transparency Tools Benefit Your Practice Beyond Compliance and Into the Revenue Cycle
Healthcare price transparency solutions do more than just help you meet the requirements of the No Surprises Act. They also help you boost your revenue and improve your bottom line.
Some of the ways in which healthcare price transparency tools impact your revenue cycle include the following.
Safeguard Your Practice Against Current Trends
While all patients value price transparency in healthcare, certain populations are more likely to seek it. For example, a HealthAffairs study revealed that younger patients between 19 and 34 years of age are more likely to use healthcare price estimators than their older counterparts.
This finding is no surprise, given that younger generations are more accustomed to technology and expect their healthcare providers to be transparent in their pricing. You could lose out on this key demographic if your practice does not offer price transparency solutions.
Another notable trend is an increase in high-deductible health plans (HDHPs) over the past decade. A report by the Kaiser Family Foundation showed that the number of workers in HDHPs increased from 17% to 28% of covered workers between 2011 and 2021.
This number will likely increase further as businesses spend less on employee benefits due to hard economic conditions. With more patients enrolled in HDHPs, they are increasingly responsible for a larger portion of their medical costs. This has made them more price-sensitive when it comes to healthcare.
As deductibles continue to rise, patients will likely seek out healthcare providers offering transparent pricing. Price transparency solutions help you stay ahead of this trend and give your practice a competitive advantage.
Facilitate Up-Front Collection and Reduce AR Days
Many price transparency solutions enable practices to collect payments up front. Patients are more likely to pay their bills in full when they know the cost before receiving care.
Collecting payments up front reduces accounts receivable days and helps you improve your cash flow. You will have already received the payment before incurring the cost of providing care.
A survey from HealthSparq revealed that 83% of patients are interested in accurate out-of-pocket cost estimates before receiving healthcare services. The survey also found that 25% of patients have forgone healthcare procedures because they did not receive cost estimates.
Another study showed that patients who knew about the price beforehand were 41% more likely to schedule a procedure than those who were unaware. For healthcare organizations, the biggest lesson to draw from these studies is that price transparency will always be a key factor when patients are making their healthcare decisions.
Patients simply want to know how much they can expect to pay for a service to avoid surprise bills. Having the right estimate spurs confidence in the quality of care and allows patients to make an informed decision. It also builds trust between patients and providers, which reflects positively on the organization's revenue.
The Cost of Healthcare Price Transparency Tools
Various factors can affect the total cost of these tools. The main factor is the number of patients a practice serves.
Larger practices will pay more than smaller practices. The larger the practice, the more patients it will have to enter into the system.
The best thing about most price transparency solutions is that they will scale to meet changing needs. As the number of patients increases, the price transparency solution will be able to handle the increased volume. Such flexibility is a major advantage for practices looking to grow their patient base.
Another factor that can affect the cost of healthcare price transparency tools is the number of features a practice needs. Some practices need only basic features, while others need more advanced ones.
Know Which Price Transparency Companies Do It Right: Not All Cost Estimates Are the Same
When it comes to companies that offer healthcare price transparency solutions, not all of them are created equal. Some companies offer basic solutions that provide only estimates for the most common procedures. They will do napkin calculations based on simple averages and assumptions, such as the price of a procedure in the area or the Medicare reimbursement rate.
The effect of working with such solutions is that they expose your healthcare organization to lengthy and expensive dispute processes. For instance, if your patient's insurance company finds the estimate to be too low, it may refuse to pay the claim. This puts your practice at risk of having to bear the cost of the procedure.
Other companies go above and beyond to provide solutions that give accurate, comprehensive cost estimates. They use data from real claims to come up with their estimates while considering all the relevant factors, such as the specific procedure and the patient's unique needs. Working with these companies yields the best results.
Remember that the Good Faith Estimate rule under the No Surprises Act gives patients the power to initiate a dispute in the event of a huge discrepancy between the estimate and the final price. According to this rule, patients can initiate a dispute if the total amount the provider charges them exceeds the estimated price by at least $400. So if your practice uses a healthcare price transparency solution that is inaccurate, you could risk losing patients and facing disputes.
Data shows that there are almost a trillion different healthcare-related prices to take into account due to the vast array of health procedures and variables. The price transparency solution you choose should be able to factor in these huge data sets to come up with an accurate estimate.
Get the Right Healthcare Price Transparency Solutions
Healthcare price transparency solutions can help practices save money and time while building trust with their patients. However, not all solutions are created equal. It is crucial to choose an accurate, comprehensive solution to avoid problems down the road.
Your goal should be to find a tool that gives you an estimate that is not substantially different from the final price. This way, you can be confident that your patients will be happy with the final bill and that there will be no disputes.