How much will a visit to the doctor’s office cost? It’s a seemingly simple yet perplexing question for both patients and physicians. A fundamental problem undermining patient price transparency continues to be that patients and physicians do not readily have access to the expected costs of care, from lab tests to MRIs to outpatient surgical procedures.
Today’s complex medical reimbursement structure makes this information elusive, in turn limiting physicians’ abilities to have a transparent discussion with patients about the impact of clinical choices on their out-of-pocket costs. While the need for transparency is nearly universally accepted, the questions of who should make this information readily accessible and how we get there have yet to be settled.
Why are estimates for care so elusive?
Medical bills are complicated. There are two key factors which determine an insured patient’s responsibility for a medical bill: what their insurance company has agreed to pay the doctor, and what their specific plan benefits include. Additionally, the provider’s charge structure is relevant for uninsured patients, but has little bearing in the ultimate patient responsibility for most insured patients.
The first question alone, what the insurance company has agreed to pay the doctor, is not easy to answer. Every insurance company negotiates separate contracts with each provider, and these agreements are challenging to interpret and “translate” into software accessible by medical staff or physicians due to the many unique exceptions and rules.
The question of the patient’s plan benefits can be even more challenging to answer: each insurance plan can have different deductibles and policies, and the patient often doesn’t know the status of their benefits. Do you know your deductible balance at this moment?
Coupling these two pieces of information quickly, and the time of service when a physician is with a patient, can be daunting.
There are some alternatives to providing a precise estimate to the patient. One alternative is a simple price list akin to a “rack rate” at hotels, or a generalized estimate regardless of the patient’s insurance company or benefits. Some organizations have chosen to post their charges online, but they are unfortunately not reflective of what the insurance companies actually pay and ultimately become a patient’s responsibility.
This all begs the question: who ultimately should be responsible for providing this information, accurately, to patients?
Who can deliver price transparency to patients?
The most convenient answer has usually been that it is the patient’s responsibility to determine what their service will cost. This belief has spawned a number of websites, most of whom use some variation of freely available Medicare data, to deliver a generalized estimate of payments for care. This approach makes two leaps of faith – first, that patients will take the initiative to research healthcare prices, and second, that it is good enough to know a regional or national average instead of a precise, customized answer.
The next group, insurance companies, have made some strides in price transparency. The trend, however, is for insurers’ patient portals to not specify their rates for specific physicians, but rather use regional estimations. Furthermore, this information is non-standard, and usually only available to patients (and the more web-savvy ones at that), not others in the industry.
That leaves us with the providers as the ideal group to enable patient price transparency. The physician-patient relationship is the base for the entire healthcare system, and layering the cost dialogue into that existing, trusted discussion stands to reason. Physicians and other providers sit in the unique position of being able to translate pricing questions for patients into a language that makes sense in the context of the care delivery model. If correctly enabled, this could change the way physicians and patients approach medical decisions about the benefits of performing services that may have marginally more benefit for disproportionately higher costs.
So, how can they do it?
Some of the rudimentary methods above – using base charges, some variation of Medicare pricing, or payer-driven information – can be serviceable in limited situations, but not ideal in today’s more demanding, high-deductible environment. Practice Management Systems have made limited progress in the price transparency areas, but their offerings tend to work best in the most basic situations when intuitive user interfaces are not required.
Fortunately, as technology improves, recent advancements are opening new doors. The newest, most sophisticated software combines payer-and-plan-specific information for results that are completed customized to the provider’s practice and the patient they are dealing with. Most of all, this software puts the price transparency discussion squarely within the physician-patient relationship where it belongs.