Chicago - July 2, 2007 – Hospital financial leaders should take the lead in transforming the nation’s hospital pricing system, according to the Healthcare Financial Management Association’s (HFMA) latest PATIENT FRIENDLY BILLING® Project report, Reconstructing Hospital Pricing Systems.
The report, which was released at HFMA’s Annual National Institute (ANI) in San Diego last week, is supported by the American Hospital Association. It includes results from an HFMA survey of hospital and health system financial leaders to help quantify the challenges in improving their pricing systems, progress they’ve made on transparency, and predominant methods of pricing.
A complex task
The healthcare payment system has evolved into a bewildering array of subsides, hidden taxes, and conflicting incentives. The result is a pricing system that is incredibly difficult for the general public to understand, inhibits transparency and price comparisons, is costly for providers and payers to administer, and erodes community trust in healthcare institutions. A more rational pricing system will support patients as they take more responsibility for their healthcare purchasing decisions. It will also contribute comparable, meaningful cost and price information to the broader national payment and financing debate.
“Reconstructing Hospital Pricing Systems is a call to action for hospital leaders do as much as they can now to achieve a rational pricing system,” Richard L. Clarke, DHA, FHFMA, President and CEO, HFMA, said. “Achieving meaningful transformation of the hospital pricing system is a vastly complex endeavor, and will require collaboration among providers, payers, government, employers, and consumers.”
Hospitals reporting progress
The report notes that hospitals are already making meaningful improvements to support patient-friendly pricing practices. For example, 97 percent of survey respondents report making “some” or “significant” progress in setting discount policies for uninsured patients, 41 percent report progress in creating a systematic approach to establishing rational, easily accessible pricing information, and 71 percent report progress in ensuring staff who interact with patients understand the organization’s key pricing and payment principles.
Practical suggestions
Survey respondents said the top barriers to improving hospitals pricing systems include Medicare charge structures, private payer contracts, community response, and uncompensated care. The report provides specific recommendations on how hospitals can approach each of these barriers, as well as principles for improving their payment systems overall.
For a complete copy of the report and additional tools to implement more rational pricing strategies, visit www.patientfriendlybilling.org.
About the Patient Friendly Billing Project
Established in 2000 and led by the Healthcare Financial Management Association (HFMA), the Patient Friendly Billing project began as a way to help hospital and health system leaders create clear, correct, concise, and caring financial communications for patients. Previous reports address consumerism, improving financial assistance policies for the uninsured and underinsured, the role of technology in patient-friendly billing, and patient-friendly billing practices specifically for medical groups.
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About the Healthcare Financial Management Association (HFMA)
HFMA is the nation’s leading membership organization for more than 34,000 healthcare financial management professionals employed by hospitals, integrated delivery systems, managed care organizations, ambulatory and long-term care facilities, physician practices, accounting and consulting firms, and insurance companies. Members’ positions include chief executive officer, chief financial officer, controller, patient accounts manager, accountant, and consultant. HFMA offers educational and professional development opportunities; information on key issues affecting healthcare financial managers; resources, such as technical data, checklists, and research reports; and networking opportunities—all of which provide our members with the practical tools and ideas they need to ensure career and organizational successes. For more information, visit HFMA’s web site at www.hfma.org