Experian Health conducted a study in 2018 to gain insight into what patients find to be good and bad in the health care system. For the most part, patients like their doctors; unsurprisingly, cost is a major concern.

With more financial skin in the game, patients want to know their costs. A survey released in March from Consumers for Quality Care found that more than half of those surveyed said their insurance plans cover fewer treatment and prescriptions than they once did. Eighty-three percent of respondents said they want more cost transparency from providers.

“At some point in the not-too-distant future, price transparency is going to be table stakes if providers want to attract new patients,” said Jason Considine, general manager and senior vice president of patient engagement and collections for Experian Health.

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Although the Centers for Medicare and Medicaid Services (CMS) requires hospitals to post fees, transparency in the industry remains elusive. Though it is a difficult process, it can be done well, and this can increase practice income and engender patient loyalty.

But perhaps the most important aspect of offering prices in advance is the ability to create a dialogue between patients and practices about the cost of care.

“They can set the cost expectation upfront and have a good, healthy, meaningful conversation about what to pay and write off,” said Paul Shorrosh, founder and CEO of AccuReg, a technology company offering patient-centered, front-end revenue cycle solutions for hospitals.

“If a provider can estimate a patient’s liability and their propensity to pay it, they can offer appropriate financial assistance options to patients that need help, including presumptive charity, which saves them from paying staff or agencies to figure that out later with a charity process that is costly to providers and burdensome to patients.”

From request to requirement

It was legislation that prompted Scott Glennie, CEO of Spokane Digestive Disease Center in Spokane, Washington, to push transparency at the practice. In 2014, state legislators required payers to submit claims for the website Wahealthcarecompare.com. Here patients can look up a procedure and get the average price and estimated price at individual practices.    

Glennie’s patient portal links to that website, where they hope to soon post cash prices. His group, he said, uses price transparency as a marketing tool. Their fees are much lower than those of area hospitals, so it could be a competitive advantage to highlight. According to the state’s site, for instance, a colonoscopy in Spokane ranges from $992 to $2540. At Glennie’s practice, it is $1082.

“It serves our group to ensure patients have an understanding of the price variability in Spokane because we are a good value,” he said.

Providing patients with accurate, upfront estimates and having a payment plan will help patients focus on their health and not money, Shorrosh said. “Nobody likes to be surprised a month later with a bill for $1,000 when they thought it would be $100,” he said. “They want to know so they can prepare and have it settled in advance, instead of going into a procedure wondering if they can afford it.”

Glennie said he knows some patients have moved from other doctors to his practice mainly because of their price transparency. “If you are a physician practice and you aren’t differentiating who you are in meaningful ways, like price, you probably won’t be in business in 10 years,” he said.

A complicated process

Even with the availability of websites that make price comparisons possible, providing patients with a good price estimate on procedures remains a difficult task. Providers can do it low-tech, but it is so time consuming that this option is really only manageable for small groups, Shorrosh said.

For instance, if a group negotiates with 5 different payers, business managers can look up the contracted rates for their most common procedures. They can then create a page for each payer with the agreed-upon price of each of those top procedures. When a patient requests a price, they can call the payer or check the payer’s website to determine co-pay and remaining deductible, but often the largest component is co-insurance, which can be difficult to calculate.  Providers need all three of these components to estimate the total balance after insurance.   

Upfront collections can complicate matters, however. If practices over-collect , the practices have to return money to the patients, Considine said. “If they under-collect, they have to chase down the rest, and there is still as much work involved.”  He noted that about half of all providers do not collect any payment upfront.

But Shorrosh observed, “In health care, the only time a dollar is worth a dollar is prior to service,” Shorrosh said. “With every day that passes after service is provided, the likelihood of getting paid goes down and the cost to collect it goes up.”

Companies such as Experian and AccuReg offer tools to automate the process of providing accurate estimates. These products essentially load providers’ fees and insurance contract terms into a database. When office staff input patient insurance and procedure information, the system electronically retrieves copay and deductible information from the payer, calculates co-insurance, and generates an estimate in real-time.

The tools vary in their sophistication, Shorrosh said. AccuReg, for example, fully automates the process and uses predictive analytics and machine learning rules to intelligently determine the right payer, procedure, benefits, co-pay, deductible and co-insurance. Both AccuReg and Experian provide printed scripts for office staff to use when discussing the estimated balance due as well as financial assistance options. The goal is to secure payment in full prior to service when possible, which increases the likelihood of payment, reduces bad debt and the cost to collect.  At the same time, it makes care affordable for those who need it.