The cost of the same medical service varies considerably across providers, but it seems nearly impossible for patients to get accurate estimates before receiving care. This dubious and unusual billing practice is one of the many factors that are failing patients and making American healthcare so unpredictable and expensive.
Fluctuations in healthcare costs negatively impact the entire system
A study conducted by the Minnesota Department of Health revealed that there are massive price variations in the costs of healthcare procedures from hospital to hospital — or even within the same hospital. One patient undergoing surgery, for instance, may be charged between two to seven times as much as another patient undergoing the exact same surgical procedure at the very same hospital. This can mean a price tag anywhere from $7,000 to $70,000.
These wild fluctuations in the cost of medical services and the lack of up-front price transparency negatively affects not only patients but the entire healthcare system as well. Without price transparency, patients cannot, for example, seek out the highest quality healthcare at the lowest cost, and doctors and administrators can’t make cost-conscious decisions.
And because it’s impossible for patients and others who pay for healthcare to get enough information about the prices, patients and payers often hand over too much money for a medical service that they believe to be superior — but in reality, the service may not actually be of a higher quality — it’s just more expensive.
Fortunately, the new CMS law forces the hand of healthcare providers who must now make costs transparent by publishing their true list prices, also known as “chargemasters,” for all the medical services they provide. The law also stipulates that all hospitals must publish price information on their websites in a computer-friendly, or machine-readable, format.
Price transparency regulations only go so far
Even with the new transparency law in effect, Practice Management (PM) and Electronic Health Records (EHR) systems only solve part of the problem for healthcare providers. What’s the hangup? With PMs and EHRs, providers cannot get accurate pricing into the hands of patients without performing a cumbersome series of manual, administrative steps.
The hospital chargemaster list is also of limited value to patients, as it doesn’t give information that helps them make an informed decision about which services or products to purchase, and from which provider. It also doesn’t help service seekers plan for expenses by portraying an accurate financial picture and keeping them abreast of any additional out-of-network fees that will be incurred.
Using technology to impact price transparency
Patients naturally want to know the cost of their medical services in advance — much as they would want to know the price of a three-course steak dinner or a handmade Italian suit before they buy it. It’s crazy that we even have to say it, but healthcare providers need to integrate available technology that allows patients to get an accurate and easy-to-understand breakdown of their charges prior to the scheduled surgery or actual procedure.
Fortunately, new, robust technology can now automate the billing process end to end, making it quick and easy for a healthcare provider to run accurate estimates for patients in advance, which eliminates much of the manual work for staff as well as the confusion and sticker shock for patients.
With a price transparency solution in place, front-end staff can generate real-time information on everything from the deductible and co-insurance percentages to an individual’s maximum out-of-pocket expenses. Tools can automatically provide an accurate estimate, out-of-pocket fee disclaimer, and a quote letter detailing a patient’s financial obligation, all of which can conveniently be sent via post, email, or SMS.
Empowering patients to plan realistically for expenses improves overall satisfaction and helps providers speed up their back-end collections, thereby reducing total admin expenses. Providing this level of provider-to-patient transparency not only helps healthcare providers collect revenue in a more timely manner but also instills a sense of trust in patients who appreciate an authentic and engaging healthcare experience.
Adopting effective tech solutions that arm patients with meaningful cost and quality information can be a serious competitive advantage for today’s forward-thinking healthcare provider.