Fifer_Joseph_webWith all the changes coming to health care, we can’t let pricing get lost in the shuffle.


For HFMA, healthcare pricing has long been an important issue. We released a Patient Friendly Billing® report on pricing in 2007, and we continue to work on this issue with multiple stakeholders today. 

However, in the course of our dialogue, I sometimes get the impression—or even the direct feedback—that too many people in the industry still believe that prices are not important. Others will allow that prices are important, but they think that other issues are much more important. They point to the deadline to gear up for the mandated health insurance marketplaces, or the need to create systems that better manage population health and new risk arrangements.

And you know what? They’re right. These pressing issues are more important. 

However, that doesn’t mean it’s OK to neglect prices.

Prices are inseparable from other parts of the ongoing reform movement. They are also one of the most conspicuous aspects of our industry, especially to outside media. To put it bluntly, far too many of our current pricing structures and practices are just asking for trouble. These structures and practices need to be addressed. The out-of-whack pricing policies of many hospitals and hospital systems generate skepticism, cynicism, and distrust among the public. 

That gives all of us a black eye. 

I do not believe this situation was intentional on anyone’s part. Quite frankly, we all caused it—hospitals, payers, and the Centers for Medicare & Medicaid Services (CMS). The simple fact is that our prices were established years ago, in a totally different environment. So they don’t seem to make sense today when examined and evaluated in a retail environment. But stop for a moment and take a look around: We are in a retail environment.

Whether we like it or not, we have to face this issue. Each provider must evaluate its own pricing, and figure out the improvements it needs to make. Then it needs to move ahead with those improvements working with cooperation from payers, physicians, and CMS. The time for hesitation is over. It’s time to get on board. Prices need to be rational, and they need to be posted for consumers in a way they can understand. These may be big steps, but absent these kinds of changes, the scrutiny will be at least a distraction, if not a barrier, to giving ideas like new risk arrangements or population health their full attention. As an industry, we can’t drop the ball on pricing. Otherwise, all the good work we are doing in so many areas may be overlooked by outside forces that will be focused only on pricing. We owe it to our industry and to ourselves not to let that happen.

Publication Date: Tuesday, October 01, 2013

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