March 18, 2021
Price Transparency: Two Months Down and Seven Ways to Get Smart
So, how’s it going 60-plus days into price transparency? Fine for some, not well for others.
As January 1st came and went, we didn’t see a lot of public attention on how providers were responding to the new CMS rule. That’s understandable, given everything else going on in our country at the time: COVID-19 cases peaking, vaccines rolling out, the inauguration, among others. Now, however, price transparency is starting to have its moment.
Let’s begin with some background. The CMS Price Transparency Rule has two requirements: Hospitals must share their charge data in a single, machine-readable file, and they must display at least 300 shoppable services online. If they don’t, they’re subject to a $300 penalty for each day they don’t meet the requirement.
Though we’ve not seen much CMS enforcement yet, we are beginning to see investigative reports from the media on who’s compliant, who’s not and price comparisons of who’s charging what.
A study from Health Affairs (and covered by Modern Healthcare) found that 65 of the 100 hospitals reviewed “were unambiguously noncompliant.” And that noncompliance took several forms, including 12 hospitals that failed to post any data at all. To be clear, this wasn’t a complex academic study where statistics could be used to uncover obscure results. Instead, it was very much in the spirit of the rule – making price information accessible to consumers – where the authors simply performed “a google.com search for “[hospital name] standard charges.”
Another article from Modern Healthcare noted that most Tennessee hospitals are struggling to comply, with only about 20 percent meeting the new rule. Making things worse, where data was available, the report unveiled significant variation in the price of services across Tennessee providers. A knee replacement, for instance, ranged from $10,536 to a $104,120. Similarly, across the state, negotiated rates and cash prices varied up to ten-fold depending on the facility and payer.
Brace yourself for more such stories to follow. As the vaccination story plays out, media attention is shifting to transparency and, even more broadly, healthcare consumerism and interoperability.
To comply, or not to comply … that was the question.
If you complied, that was a good start – but only a start. Going forward, you have to be prepared to answer questions related to your prices and cost of services, especially if yours are near the top of the list or highest in your market.
Some hospitals and providers intentionally decided to take the penalty. If that’s you, how long are you willing to pay that? And how much reputational damage are you risking if people can’t find information they want? And how will you explain why you chose that path?
Either way, we’re not looking at this just in terms of compliance for the sake of compliance. What about making it consumer friendly – and gaining a competitive advantage in doing so? The letter of the law is merely publishing your chargemaster. Going beyond means developing an online price estimator tool or other useful tools that improve the patient experience (think “access” and “engagement”).
Transparency and interoperability are not flavors of the month. We live in an increasingly consumer- centric world, and healthcare is finally having to catch up. The push is strengthening to give patients more transparency to the cost of services and access to their own health information.
Don’t delay the inevitable.
If you’re compliant, start working with your clinical, marcom, operations and patient experience teams to plan how you’ll use the box-checking of the rule to launch you into a more patient-centric model over time. Review your technology, financial tools and more. And while you’re doing it, ask around – see what your patients want and need to make their experience even better.
If you’ve chosen the route of noncompliance, here are seven things you can do right now to prepare for what’s to come:
- Gather your leadership team. Talk and listen.
- Determine how far away you are from posting your prices and what you need operationally to make that happen.
- Get a sense of where you sit within the market. Are you often more expensive than your market competitors?
- Develop a communications plan that aligns with your operational plan and equips your leaders, employees and board members properly.
- Ask your community. As above, check in with your patients to learn what they want and how they’d like to approach things like scheduling, payment and – of course – cost estimates.
- Create for your patients. Develop user-friendly language and mechanisms so they understand the information you’re eventually going to share online, whether it’s through the EMR or at the doctor’s office.
- Flip the switch. Go with the plan and communicate about it regularly. Offer ongoing resources to people to ensure they can access the tools. And continue to listen – you’ll hear about what’s working and what isn’t.
Healthcare is a highly trusted industry. A recent Jarrard Inc. survey showed that doctors, nurses and hospitals all enjoy well over 80 percent trust among the public. Consumers trust doctors more than their insurance company for accurate information on the price of healthcare services, and they’re more likely to call their doctor’s office than their insurance company for that information. Patients want to hear from you.
Beyond that, we know that information related to cost of services is important to consumers. According to our survey, two-thirds reported that the cost of healthcare services impacts where they choose to receive care. Meanwhile, almost four in ten consumers have used a price estimator in the last 12 months.
Here’s the bottom line: Now is a great time to leverage the trust patients and consumers have in providers. It’s an opportunity to connect with patients beyond a single visit or course of treatment. They’re looking for safety, security and transparency. Be the organization that provides it. You have everything to gain.