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Industry Insights

Price Transparency and Consumerism

Part One - Increased Price Transparency

 

Next: Two - Consumerism Today in Healthcare


Transcribed Video Content Below

Greg: During today's session, we will be addressing several components around the intersection of our industries migration to greater pricing transparency in the midst of our society's transformation to a new digital consumer model. We'll take a deeper dive into best practices with consideration specifically around online patient price shopping models by actually critiquing a number of current online patient estimate web pages.

We'll then move into some key reminders to build on the digital connection with patients once they visit your website. We know from the dot-com bubble crash years ago, that actually just having more eyes visit your website isn't enough. And really going forward, online shopping isn't going to be for just books, travel, restaurant reservations, but health care services as well.

Today, meaningful health care reform around increased pricing transparency is really occurring at both the state and at the federal level. Specific to pricing transparency, we found a report from Altarum Center for Payment Innovation. It's published annually as a report card of each state's pricing transparency grade. The highest grade goes to those states that provide usable and actionable information related to health care pricing. As you can see from the graph, 44 states are still currently earning an F grade.

These scores were driven by the state's website for having key pieces of information, such as a rich data source, being an all-payer claim dataset, which was the actual paid amount versus charges, the scope of prices with prices being shown as the paid amount, the scope of the procedure and services, which would include inpatient, outpatient, and professional services. The scope of the provider, being the actual cost per episode, and the public availability of the website, in other words, the ease of use.

The report noted that there were common trends with those states that received a high pricing transparency in quality score. While their common trends... please, note that the scores were based on the state's availability of the pricing information, not the individual health care provider's website. So to aggregate it to make available to the public and pricing transparency information, the scores were at that state level. Overall, some states were advancing faster than others.

Brad: But as we know Greg, the federal government often intervenes in health care and other areas when the market may be not moving as fast as they would like to see it. And this really seems to be the case with pricing transparency. Next year in 2019, CMS is now officially implementing a requirement that health care providers publish a standard list of prices and charges. The goal here is to increase the availability of usable data so the public can more easily make more well-informed health care decisions that also include the cost of service in that decision making process.

This is certainly a step in the right direction nationally as a standard, but the requirement to publish a standard list of prices, maybe a lagging requirement with what patients really want to know. Secretary Azar is absolutely correct, the patients will want to know the real cost before they get the service. By just posting a list of prices is likely not the real cost, you will want to control the price conversation better than just posting your list prices.

Greg: You are so right Brad, while most states are woefully lagging with their pricing transparency websites, a number of states such as the ones listed here, have enacted state laws that require health care providers to provide an estimate of what the patient's health care costs will be for a procedure. We know there's still a lot of variation, but the state and federal proposals are prompting healthcare providers to incorporate new processes for generating accurate estimates for the cost of service.