pg42_column-todd-nelsonProviding price and quality information to patients is complicated. To accomplish this, we need to work together. 


When I had the opportunity to work as a hospital CFO, some of my most fulfilling experiences involved working directly with patients and families, helping them navigate the financial side of health care to ensure they could get needed tests and treatment. These discussions inevitably led to questions about healthcare “prices,” which is a loaded conversation for any healthcare finance leader. 

Price transparency is complex and multilayered. Yet greater lucidity around prices, as well as quality, is needed as we try to engage patients in healthcare decision making. 

It’s About a Kid with Cancer

Recently, the complicated nature of healthcare prices was affirmed for me in a story that a good friend of mine (Matt) shared about his son (Patrick), who has cancer: 

While administering a shot, the doctor tried to entertain Patrick with an interesting factoid: “That shot you just received costs about $2,000.” After the doctor leaves the room, Matt sees Patrick fighting back tears. “It’s just a stupid shot, it shouldn’t cost that much.” And it dawns on Matt that his 15-year-old son worries about the impact of his treatment costs on his family on top of having to deal with the stress of cancer. 

Fortunately, Patrick had Matt to give him a hug and explain that insurance would cover most of that $2,000 shot. But patients are faced with these types of confusing scenarios on a daily basis as they try to sort out what tests and treatments will truly cost them after deductibles, coinsurance, charity care, discounts, and other factors are taken into account. 

It’s About Choice

How can healthcare providers and payers provide pricing information that is understandable and that helps put our patients at ease? In Grand Rapids, Mich., insurer Priority Health has become the first Michigan-based health plan to offer members a comparison shopping tool that lets them review prices and compare quality for providers. Sometimes driving just a few miles to a lower-priced surgery center or hospital can save patients thousands of dollars. This was a well-kept secret—until now. 

Priority Health’s tool used contracted fees to determine a “fair price” for more than 200 common procedures, including surgery, labs, and imaging tests. Costs are assessed, by market, on a scale: at or below fair price (green), slightly above fair price (yellow), or among the most expensive (red). Consumers can also review quality rankings and consumer reviews of hospitals and physicians through Healthgrades®. 

“We can’t continue to ask individuals to take on more responsibility for healthcare costs without giving them the resources they need to manage those dollars,” said Michael P. Freed, president and CEO of Priority Health.

It’s About Collaboration

As Priority Health will tell you, it takes a collaborative effort between all facets of the healthcare industry to accomplish the goal of rational, meaningful price information. However, I don’t think we have a choice. We need to follow the example of leading-edge organizations and provide patients with information that can help make them better choices. 

Or, in the mantra of Matt and Patrick, which has followed them all the way through their very personal fight against cancer, “If we work together, we will win!”

Todd Nelson is director, healthcare finance policy, operational initiatives, HFMA.

Publication Date: Wednesday, November 06, 2013