Price Transparency: A Teachable Moment for Hospitals

Transparency is a component of honesty that lends itself to clarity and comprehension. It’s a pivotal part of direct communication, and price transparency is a policy many hospitals should be, and more recently are, willing to adopt. With the passage of the Affordable Healthcare Act, more consumers and employers are opting for high-deductible healthcare plans. As patients are financially responsible for a greater portion of the bill until the higher deductible is met, the demand for price transparency and healthcare consumerism has increased.

While some patients might assume that hospitals charge the same amount for the same procedures and services, more patients are becoming aware and researching price variations between facilities to ensure they are receiving the best care at the best price. A clear understanding of what patients will owe beforehand will help avoid unexpected medical bills. Price transparency helps them make more informed decisions and become a more knowledgeable consumer.

Patients are becoming more tech-savvy and comparing processes between facilities instead of defaulting to one doctor or facility. While some health insurance companies offer assistance in finding the most affordable hospital that offers the desired procedure or service, not all do.

Facilities themselves can offer additional tools online to assist patients in understanding the price of the service. To enhance transparency and communication with patients, hospitals should be able to tell them what they’ll owe before a test or exam is conducted.  In fact, hospitals may want to develop estimated pricing of the top 20 to 50 procedures offered to increase price transparency and patient satisfaction.

Other best practices to increase price transparency include reviewing your chargemaster regularly to realign prices as needed, listening to feedback from your patients regarding their bills, and redesigning the bills to increase understanding if necessary. For offices or hospitals needing help comparing their pricing to their peers, Lutz has qualified staff available to assist them.

Once the price transparency program is developed, proper training for staff is needed to ensure program success. Customer service is key to the price transparency process – if a patient has a bad customer service interaction with staff, even if everything else was done correctly, the patient will be dissatisfied and may become a detractor of the facility.

Believing that hospitals are responsible for being transparent with patients leads to a better hospital-patient relationship and creates a more successful teachable moment for patients who might be at risk of falling into debt because of unanticipated medical bills. As patients become more financially involved and educated about the cost of their care, facilities will want to position themselves as a partner in the price transparency process. Enhancing patient financial communications can not only boost patient satisfaction but may also increase patient loyalty and even operating margins. If you have any questions, please contact us or learn more about our healthcare accounting and consulting services.