The Price of Healthcare ‘Sticker Shock’: Why Meaningful Price Transparency Is Critical

The new year brought new rules for health systems around price transparency, requiring standard charges to be posted online “in a machine-readable format” and the list of charges to be updated annually. But the question remains: How much value are patients gaining from this requirement?

Posting charges online won’t help patients if the chargemaster is difficult to find—and that’s the case for many organizations. Such price lists also are highly confusing for the average patient and difficult to decode. For example, at one major academic medical center, a cardiology procedure is listed as “HC PTC CLOS PAT DUCT ART,” an alphabet soup-like description few would understand. The charge: $42,569. (See the Centers for Medicare & Medicaid Services’ most recent FAQ on the price transparency requirement.)

And while it’s interesting to know that the price of a cotton ball at a New York hospital is $1.15, this information doesn’t answer patients’ most important question: “What is my out-of-pocket cost for care?”

Crafting a Consumer-Friendly Approach

At a time when patients are facing increased out-of-pocket costs for care, with a 212 percent increase in the average health plan deductible over the past decade, it’s clear that price transparency is needed. But achieving meaningful price transparency requires more than uploading the hospital’s chargemaster to a website. There are four strategies health systems should consider in establishing a consumer-friendly price transparency approach.

  1. Make it easy for patients to find your charge list.With the federal law around price transparency taking effect this year, it’s natural that patients will be driven to look at your charges online. Post a link to the price transparency portion of your site on your home page, and consider publishing the web address for this page in patient financial communications.
  2. Provide the charges in a consumer-friendly format.Avoid a straight-from-the-chargemaster approach to price transparency by deciphering terms patients are unlikely to understand. It’s important to post charges in a format that is easy to read and simple to access. The more care your health system puts into sharing its charges, the more patients will trust that the charges have been published in good faith.
  3. Make certain patients understand that charges are different from out-of-pocket costs—and who to contact for more information.Posting your charges is not enough if patients don’t have a resource for determining the amount they will pay after insurance. Be sure your price transparency page alerts patients to the difference between charges and costs, and prominently feature the contact information for your financial services team. An open-door approach to price transparency will engender goodwill among potential patients.
  4. Train patient financial services team members to ease patient’s budget concerns.These conversations are an opportunity not only to estimate a patient’s out-of-pocket costs, but also to provide information about ways to pay. Does your health system offer long-term payment plans for patients? If so, this is a great opportunity not only to provide price transparency, but also to promote payment plans that are available to the patient. Your payment plan solution should be promoted alongside your price transparency communications no matter if these communications are published digitally or in print. In doing so, your health system and its staff can help ease patients’ concerns about the cost of their care—and prevent situations where patients delay needed care to avoid the expense.

Putting patients at the heart of your price transparency strategy will help those you serve gain the most value from your efforts. It’s a strategy that increases patient satisfaction and loyalty in an increasingly competitive healthcare landscape.

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