Price Transparency: The Time Is Now

February 25, 2019 2:50 pm

We at HFMA have been talking about price transparency and consumerism for over a decade. It’s time for healthcare stakeholders to listen—and take action.

HFMA published its first, groundbreaking consumerism reports back in 2006 and 2007 as part of our Patient Friendly Billing series. That was probably my favorite series title, even though it was jokingly called an oxymoron. The joke isn’t so funny anymore.

HFMA’s History with Consumerism

Building on our well-received Patient Friendly Billing work, HFMA embarked on a new chapter in consumerism in 2014 by convening various industry stakeholders to reach a consensus on basic definitions, roles and responsibilities, and other consumerism fundamentals. We issued three reports, on price transparency and best practices for patient financial communications and medical debt resolution, in rapid succession under the banner of Healthcare Dollars & Sense. We then added two educational resources for consumers—most recently on avoiding surprise bills—and made them available for healthcare organizations to post on their websites and use in pre-procedure communications with patients.

(pictured at right: Joseph J. Fifer)

The collaborative process involved in developing that body of work was delicate and painstaking. Something as seemingly simple as differentiating terms that were often—but mistakenly—used interchangeably, i.e., price, charge, and cost, turned out to be more time-consuming than anyone anticipated. But the part that has surprised me the most has been the industry response to our work—or, rather, the lack thereof. 

Apart from a few standout consumerism champions, the reaction has been lukewarm at best. Several hundred healthcare organizations have formally adopted the patient financial communications best practices, but they’re a small fraction of the thousands of provider organizations in this country. A somewhat smaller number have picked up on the consumer guides. And most importantly, the industry has scarcely begun to catch up to other consumer sectors in its ability to deliver accurate, timely, easily accessible price and quality information. 

The Results of Inaction

It is clear that Americans still don’t understand how healthcare billing and payment work. As a result, trust in hospitals and healthcare practitioners is declining, even though they continue to work miracles every day. Yes, consumers are angry with us. And frankly, I can’t blame them. It’s not unreasonable that consumers expect to know ahead of time what their out-of-pocket responsibility for healthcare services will be. 

A generation ago, healthcare institutions were among the most trusted in our society. The erosion of trust since then is largely attributable to consumers’ escalating concerns about price and affordability—concerns that should be well within our power to address. As the saying goes, this isn’t brain surgery.

Possible Reasons for Resistance

Why aren’t consumerism issues resonating with healthcare stakeholders? I ask myself that question whenever I see the industry getting bashed in the news media or on social media, which is a daily occurrence. I asked myself that question when I heard President Trump signal in his State of the Union address that a major push on price transparency is imminent. 

I don’t have good answers. I know how difficult it is to manage and lead healthcare organizations in a complex and rapidly changing environment. I know that bottom-line issues always wind up taking precedence. And I know that the competition for attention in healthcare organizations is often as intense as the competition for capital. But it is time to start paying attention to consumers.

It Is Time

It is time to take an honest look at the billing and payment processes that our patients and members experience and evaluate them through their eyes. We, as leaders, should have personal knowledge of what it is like to experience our financial processes—in hospitals, clinics, physician practices, and health plans. It is time to implement or strengthen processes and structures to get feedback directly from patients and members. 

It is time we provide every patient or member with a reliable, accurate, timely out-of-pocket cost estimate, upon request. It is time that our websites include prices, in addition to the charges that the Centers for Medicare & Medicaid Services now requires, so we can provide meaningful price transparency. It is time to have the right conversations with patients and members in every setting—from pre-procedure to the emergency department. It is time to address surprise bills. Yes, these are very tough issues, but it is time to tackle them.

HFMA is here to help. Beyond our online resources, I am here to help. If you are struggling with how to adjust and adapt to rising consumer expectations, I want you to call me personally. I know that may sound crazy, but … it is time.

Joseph J. Fifer, FHFMA, CPA, is president and CEO, HFMA. Follow Joe Fifer on Twitter @HFMAFifer.


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