By Mark Spinner
Hospitals’ compliance with a federal price transparency rule that took effect on New Year’s Day varies widely. But while the penalty for noncompliance is just $300 a day—“a flea on an elephant financially” for large systems, one expert says—consumer perception of noncompliance is another story.
Research shows that consumers crave transparency around healthcare costs. A recent AccessOne survey found that two-in-three individuals would shop around for care—and 38% already have. Forty-five percent say it’s very important that providers publish price lists of common procedures, including half of Gen Xers—many of whom are coordinating care for themselves, their children and their parents.
Although some hospital leaders say the price transparency rule doesn’t give people the information they need most—out-of-pocket costs of care—the perception of noncompliance will be one that is hard to shake. That’s why hospitals must be seen as making financial information easier to access in an era when positive patient financial experiences are highly valued.
Making Meaningful Moves Toward Transparency
There are two aspects to the price transparency rule. The first requires hospitals to post charges for 300 shoppable services online in a searchable, consumer-friendly format, such as an online price estimation tool. The second demands that hospitals post a machine-readable file that includes the payer-negotiated rates for all services, by hospital, as well as the cash price offered to self-pay patients.
When it comes to price transparency, the best offense is a great defense. In 2021, as consumers delay non-essential care during the pandemic due to cost, there are three approaches open financial communications to that hospitals should consider.
Initiate conversations about cost with patients. Nearly three-in-five consumers believe it’s very important that providers share cost information before a procedure takes place, and about half want to discuss payment plans or financing, the survey shows. Yet 55% of respondents say they haven’t had these conversations with their providers. As consumers become more willing to shop around for care before committing to a procedure, addressing financial concerns at the start of the patient encounter—whether at the point of registration or after a cost estimate is provided—provides peace of mind that the hospital will work with them around payment.
One best-practice approach: Connect with patients within 24 hours of providing an estimate. Then, walk patients through the range of payment plans available, from no-interest to low-interest plans, and offer to start the enrollment process.
Keep patients’ financial literacy in mind. Consumer survey results show that two-in-five consumers only “somewhat” understand what expenses their health insurance will cover. This could be a barrier to care, given that nearly half of consumers would be somewhat or very concerned about their ability to pay for a medical bill less than $1,000. That’s why it’s important to find simplified ways to speak with individuals about their financial responsibility.
Financial education should not only be delivered before care is delivered, but also reinforced afterward. Make sure patients understand the difference between the total charge their out-of-pocket cost for care. Explain how the out-of-pocket cost was determined, being careful to define terms such as deductible, allowed amount and out-of-pocket maximum. More and more, leading hospitals define these terms on billing statements as well.
Give consumers a single point of contact for financial communications. Americans are feeling the economic strain of the COVID-19 pandemic—and it’s impacting both their medical and financial decisions. Pairing individuals with a single point of contact for financial communications ensures that when patients have questions regarding the amount they will be expected to pay out of pocket, a billing representative will be there to walk them through their options. It also supports financial continuity in care, which is vital to supporting a positive experience.
One-to-one patient financial care also gives revenue cycle staff greater confidence in conducting complex financial conversations. The more that staff become familiar with individuals’ economic circumstances, the better able they are to direct patients toward personalized solutions—from charity care to community resources to no-interest and low-interest payment plans—that most effectively meet their needs.
A More Compassionate Approach to Financial Care
Closing the price transparency gap promotes higher levels of trust with consumers. It also enables access to care when individuals need it most. In 2021, hospitals should approach price transparency compliance as part of a holistic approach to patient financial care, making information easy to access, understand and act upon for consumers.
Mark Spinner is CEO and president of AccessOne, a leading provider of flexible, co-branded patient financing solutions that help patients afford medical expenses for health systems nationwide.
The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.