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As patients look to make more informed decisions about healthcare services, payers can leverage comparative analytics to deliver greater price transparency
Today, consumers are on the hook for more of their healthcare costs. From higher monthly premiums and deductibles to increased out-of-pocket expenses, they are taking a closer look at their healthcare expenditures, and for good reason:
This vortex of rising healthcare costs is impacting more than just consumers. Unpaid medical debts mean providers are not getting paid, negatively affecting their bottom lines, and that’s just scratching the surface. While patients may not necessarily have a choice regarding high deductibles, they seek greater control over their own healthcare expenditures through improved access to pricing information.
Price transparency benefits everyone: Payers can reduce costs with a consumer-driven model that focuses on value-based choices, providers can improve their bottom lines by serving a more educated patient-base, and patients seeking services can make more informed decisions.
The California Department of Insurance and Consumer Reports recently launched an online transparency tool for patients to compare price and quality information for providers in their region. The site allows patients to compare hospital and medical group price and quality in the areas of maternity care, hip and knee replacement, back pain, colon cancer screening, and diabetes. The site also reveals estimated regional costs for more than 100 different medical procedures or conditions ranging from appendicitis to prostate cancer, illustrating dramatic price differences depending on where patients seek care.
This tool is just one example of organizations seeking to provide greater price transparency.
Next: What payers and providers can do to improve transparency
What payers can do
As the industry begins to move towards the implementation of bundled pricing programs, payers can begin to monitor costs by individual episode of care. By examining historical claims data and grouping costs by episode of care, plans can gain valuable insight into actual prices.
By applying these pricing methodologies, payers can further reduce costs within their consumer-driven models and focus more on value-based choices.
Additional benefits that payers can reap by implementing bundled pricing strategies include the ability to:
What providers can do
One way providers can deliver price transparency is to partner more closely with payers to take advantage of bundled pricing.
Payers can help establish the more sophisticated means of dividing and sharing payments among various episode stakeholders. A bundled pricing strategy also creates incentives for providers to become more efficient and cost-effective in their care delivery.
As more and more consumers begin to shop for their healthcare services, providers who fail to offer high-value care may lose revenue if consumers elect to take their business elsewhere.
The healthcare trend line continues to grow as the aging demographic continues to consume more care. Cost pressures will not ease without significant changes to the current fee-for-service model.
As these parties work together to improve processes, there is an opportunity to change how healthcare is billed and drive down costs. This paradigm shift benefits everyone and has the potential to help repair our broken healthcare system.
Brad Hill is the chief revenue officer of RemitData. Prior to RemitDATA, he was vice president, Payer Solutions, at Passport/Experian Health, where he introduced existing products and new solutions to the commercial and government-sponsored payer market.