Corporate Strategy, Healthcare

Price Transparency – Healthcare’s Silver Bullet?

Trust is the coin of the realm.

– George Shultz

This week, most people are talking about all the news coming out of JP Morgan’s Annual Healthcare extravaganza, and rightfully so.  However, I don’t think there’s much I can add to the discussion, so I want to talk about another big event that happened in the past couple of weeks: CMS’s implementation of the much-anticipated Price Transparency rule for hospitals.

Unfortunately, over the break I was in a hospital for a family-related medical event for which I would be financially responsible.  Once I knew the issue would be resolved without any major harm or loss of life, my next question turned to: would I be able to afford this? Cerner starts its new plan year along with the calendar year, so being in the hospital in early January means incurring medical expenses without the added benefit of having time to fill your HRA/HSA.

Having knowledge of the new price transparency rule, I turned to Google and looked for the hospital’s chargemaster.  The first hiccup: it wasn’t there.  Being a determined consumer, I politely called the billing department to note that they had not released their prices and therefore were non-compliant with CMS’s new regulation.  To this organization’s great credit, they told me they were working on it and within a week got back to me with the link.

Next, once I downloaded the chargemaster as an Excel spreadsheet, I started to comb through it on my phone.  This was the second hiccup: although the pricing information was machine-readable, it was not human-readable.  Searching through abbrevations like INF, HOSP, etc. was time-consuming and not straightforward, especially as a non-medical professional.

So, lastly I decided to buzz my friend (who happens to be an RN at the hospital, convenient!) and asked her to explain to me what a typical set of codes/services might be for the stay that occurred.  Her response: no clue man.  And that is fair, because she is a healthcare provider and knows nothing about billing.

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My Excitement Looking at a Chargemaster

Looking at Administrator Verma’s take on the new rule, I think she is absolutely right: this is a first step.  It is a great first step and I applaud it, but the major issue I take with the data is not inaccuracy for those with insurance.  Healthcare stakeholders need to understand that data is only as good as the tools that use them.  So, I would propose several next steps for those implementing and administrating price transparency rules:

  1. Campaign for Awareness – I was only aware of this new data source because I happen to work in Digital Health.  99.9% of Americans don’t even know this data exists.  Well-placed TV or radio dollars could help get the word out, increasing patient utilization.
  2. Encourage Sophisticated Tooling – By the time I got to the chargemaster it was in Excel format and highly complex medical jargon.  There are some great Price Transparency experiments that CMS is running to help modernize federally-run insurance programs, but private enterprise should be encouraged to build direct-to-consumer tools on top of the new information.
  3. Integrate Pricing with Workflows – The fact that my friend, who is an RN at the health system, could not tell me how specific clinical procedures mapped back to billing is troublesome.   Better integration between the EHR and revenue cycle solutions will help clinicians guide consumers as healthcare becomes more and more consumer-driven.
  4. Create Consumer-Friendly Price Hotlines –  Many major health systems are moving toward employing in-house billing and coding specialists to maximize revenues and improve cost efficiencies across their facilities and networks.  As this happens, health systems should also create “consumer helplines” that answer simple questions about pricing and services ahead of time.  Lots of startups like ZenDesk, LiveChat, and Intercom provide a front-door chat interface that integrates natively with websites and could solve this issue elegantly.

All-in-all, I was not able to get a sense of what the cost for my visit would be and had to wait for the bill to arrive.  This begs a question though: if I had been able to find out what the visit cost, would it have changed my behavior? The answer is almost certainly no.  My main concern was making sure that my family was healthy.  What amount of price savings would I trade off for that? That thinking alone is probably more likely to continue driving healthcare costs upward faster than any downward pressure this Price Transparency effort could provide.

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