Robert Fromberg
Editor-in-Chief, HFMA
“Price transparency? That’s impossible.”
The topic of discussion was price transparency, and one staff person reported that a healthcare finance professional recently called it “impossible.”
That’s a rational response. It’s rational if you mean that posting average prices on a web site is not useful. It’s also rational if by “price transparency” you mean providing real-time, patient-specific estimates of hospital charges that a patient will pay out of pocket. And it’s rational if you broaden “price transparency” to include its close cousin: simplified charge and payment structures.
Meaningful price transparency and rational pricing involve processes and relationships so complex that achieving the desired objectives seems about as likely as the Chicago Cubs winning the World Series.
In fact, let’s make a list of why price transparency is impossible. I don't want to make your hand hurt scrolling down the screen, so I’ll condense:
- Charge structures and discount policies are sometimes outside of a provider’s control, driven by regulatory requirements, payer mix, and service mix.
- Clinical information essential for realistically estimating payment amounts is frequently unknown before the service is provided.
- Most insurers cannot provide real-time electronic confirmation of individual patients’ insurance coverage, benefits, noncovered services, or copayments and the status of their deductible, coinsurance, and maximum out-of-pocket limitations.
- Some payer contracts and some states restrict the ability of providers to discuss payments with patients; some prohibit discounting for the uninsured patient’s financial obligation or require that providers disclose discounts to insurers.
- Insurers, government, and providers will have to work together to enable providers to simplify charges while managing the impact on net payments.
That list of reasons that price transparency is impossible comes from Consumerism in Health Care, the recent PATIENT FRIENTLY BILLING® project report. But here’s the odd thing: This list appears on pages 6 and 7 of a 20-page report. In other words, this list of the impossible is the starting point. The rest of the report tells you how to begin chipping away at the impossible.
This month hfm magazine published an article called “Advance Estimates: 4 Approaches to Price Transparency in Health Care” by Terry Allison Rappuhn. The article shows four health systems providing tailored preservice estimates to patients. None of the examples is flawless, but these systems, too, are chipping away at the impossible. And next month hfm magazine includes an article called “Revenue Cycle Customer Service Adapts to Consumerism” by David C. Hammer that provides many examples of health systems enhancing their financial communications with consumers.
Twenty years ago, I observed a focus group of physicians commenting on a proposed periodical designed to provide the latest clinical-care guidelines. I recall one physician looking up from the sample on the table and right at the mirrored wall, behind which sat the observers. Although he couldn’t see us, he shook his finger at us. “I know you,” he said, his voice rising. “You people back there want to control how I practice medicine. Well I’ll retire before I let that happen. And I’ll tell my children not to be doctors, either.”
I left that focus group thinking that standardizing clinical processes was impossible. But today, evidence-based medicine--while always a work in progress--is part of the everyday discourse in health care.
Having had that experience, I can’t help thinking that with so many healthcare finance professionals chipping away at the impossible, meaningful price transparency is inevitable.
