Self-Service Calculators for Price Transparency
By Jay Deady
Healthcare price transparency is the challenge that just won’t go away, largely because proposed solutions to date leave much to be desired by patients and providers alike. Obviously, few hospitals are enthused about making their chargemaster lists public, and even if they were available, the prices on these lists don’t reflect what a patient would actually pay based on his or her insurance plan. For that matter, state-mandated databases that house historical claims data don’t either; neither do websites that provide average costs and ranges by geography.
Nevertheless, true price transparency remains an urgent need in today’s high-deductible arena, where an increasing number of insured patients struggle to pay for their care. The American College of Emergency Physicians conducted a survey in which 70% of respondees stated they regularly saw insured patients in the ER who had put off care because they struggled to pay high deductibles and copays (Marketing General, 2015). It’s a given that not having clarity on what they’ll pay only puts further stress on this growing segment of patients—and all signs point to a backlash if providers don’t take action soon. Consider that a former hospital CEO’s recent petition, which demands that all patients be billed the same prices, received over 80,000 signatures within a single week (Weissman, n.d.).
The good news is providers can take the lead on solving the price transparency challenge once and for all, and devise a solution both they and their patients will be satisfied with. That solution is the self-service price estimate—designed exclusively for use by patients and accessed directly from the provider’s website or healthcare app.
Self-service pricing calculators
Healthcare consumers want what most consumer-driven industries provide: a clear understanding of the cost of services before making a purchase commitment. With self-service healthcare pricing calculators, consumers can easily obtain this information themselves quickly and painlessly. The consumer accesses the price estimate calculator from the provider’s website or a patient portal, then inputs his or her name, insurance plan number, and two or three more data elements. Within 10 to 45 seconds, a complete estimate appears based on the consumer’s current levels of coverage. Estimates can also be generated for self-pay patients based on what the provider charges for these cases.
As for how the estimates are calculated, these tools rely on a mix of automation and comparative analytics. Automated queries retrieve data from payer portals, which is then combined with data from the hospital’s chargemaster list and payer contracts. Advanced price calculators will have an analytics review and compare the estimate to previously paid claims, identifying various payer quirks and variances, such as one payer’s propensity to use a different code than other payers for a given procedure.
Self-service price estimates neatly solve one of the most persistent challenges with implementing price transparency: the pitfalls of making proprietary financial information public. As a provider-facing solution, and because patient-unique information must be entered to generate an estimate, not anyone can use the calculators. This is vastly preferable to putting a list of total charges or paid amounts, which reflect neither negotiated rates with payers nor accurate out-of-pocket patient costs, out there for competitors to see. At the same time, self-service price calculators appeal to today’s information-driven patients and conform with how consumers are already seeking health information online.
Engaging with patients to schedule care
One of the most promising advantages of a self-service price calculator is its potential to engage with consumers and encourage them to schedule needed care. After generating a price estimate, for example, the calculator could prompt high-deductible and self-pay consumers to view payment plan options. It could even engage patients who have concerns about their ability to pay and help them schedule time with a financial counselor.
Realistically, with high-deductible plans seemingly here to stay, we can only expect patients’ payment concerns to grow. For all the reasons above, having clear and easy-to-understand estimates in hand, combined with payment plan options, can significantly alleviate these concerns. This in turn will prompt patients to schedule and receive needed care, with new peace of mind—for themselves and their providers—that they can manage its cost.
Jay Deady, CEO of Recondo (www.recondotech.com), has been a leader, product visionary, and innovator in healthcare information technology for more than 25 years.
References
Marketing General, Inc. (2015, September). ACEP health insurance poll research results. Retrieved from https://www.scribd.com/doc/287048488/ACEP-Health-Insurance-Poll-Research-Result
Weissman, S. I. (n.d.). End predatory healthcare pricing. Retrieved May 10, 2016, from https://www.change.org/p/end-predatory-healthcare-pricing