Why some providers are turning to price transparency tools

Mar 2, 2016 | Healthcare Industry News

As one solution to manage costs and help patients with high insurance deductibles, St. Clair Hospital in Pennsylvania has implemented a new price transparency tool that allows consumers to compare costs and services. The tool, which is called "Patient Estimates" and was built by Experian Health, allows users to estimate deductibles, coinsurance and co-pays for more than 100 procedures ranging from blood tests to surgeries. It's available through the hospital's website in what it calls a "patient-friendly portal."

The benefits of a price transparency tool
Competing with bigger hospitals in the area, St. Clair hospital says it's first in the region to offer this type of transparency as part of its overall plan to lead in high quality care, patient safety and satisfaction as well as clinical outcomes.

"We want our patients to feel secure knowing, upfront, how much their care will cost them," Richard Chesnos, senior vice president and chief financial officer, said in a news release for the hospital.

By providing this information about the costs for patients and insurers in health care in a user-friendly manner, St. Clair and other facilities nationwide hope to reduce any confusion. Miscommunication often obstructs a patient's ability to make a payment, especially those with high deductibles in their health plans. Putting that information up front is thought to control spending and allow consumers to make more informed decisions about their health care.

This transparency isn't just beneficial for consumers, though. It can also help providers monitor their prices and make adjustments if necessary. Under the Affordable Care Act, the Centers for Medicare and Medicaid Services has expanded the use of financial incentives so hospitals and private insurers can better manage costs.

Why it's becoming necessary
This insight has become increasingly important as studies have revealed how dramatically health care prices can vary depending on the hospital and the state. Despite having the legal right to request price quotes, patients have expressed that it's often difficult to get them from hospitals or, if they do, they're not useful.

Recently, the Pioneer Institute surveyed 54 hospitals in six states, finding that price quotes were sometimes inaccurate or inaccessible to patients. While the results weren't surprising to the Pioneer Institute, they were still somewhat alarming, as more consumers have high deductibles and must spend a lot before their insurers can help with costs.

For these reasons, price transparency has become a valuable asset for providers and patients alike. It's been growing as a trend, even becoming a law in Massachusetts. While it's not yet mandated in Pennsylvania, providers in the state are required to pledge to educate and provide requested information to patients.

Managing costs is just one aspect of an efficient revenue cycle management plan. For more solutions, contact Professional Medical Services today.