Healthcare Price Transparency: Doctors Need It Too - Industry Analysis by Loyale Healthcare

LAFAYETTE, Calif., Dec. 18, 2019 /PRNewswire-PRWeb/ -- There has been a lot of noise about the lack of price transparency in healthcare for several years. The issue's profile was raised again on Nov. 15 when the Center for Medicare and Medicaid Services' (CMS) issued updated price transparency rules for 2020. We published an article recently about these new rules, observing that - as written - they fall far short of patient expectations in a market whose economics are increasingly dictated by consumers.

CMS is far from alone in its call for improved price transparency. In recent years, state and federal legislators, the current administration, patients themselves, and a large number of industry associations and experts have derided the industry's inability to provide consumers (patients) with useful information about the cost of their care before it is delivered – sometimes leading to personally catastrophic outcomes.

In all this coverage, one critically important constituency has been consistently overlooked in the discussion around transparency: Caregivers - the doctors, nurses and other clinicians whose patients are avoiding, delaying, abandoning or rationing care because of concerns about the cost. Simply stated, doctors don't know what a course of treatment is likely to cost a patient so they can account for the patient's ability to afford it when a treatment plan is designed. The same condition also applies to prescription drugs where, if armed with prohibitive price information upfront, physicians can prescribe less costly alternatives.

This now rather obvious point was brought home to me by a report published recently by Wolters Kluwer titled, "Mending Healthcare in America 2020". Based on an independent survey of nearly 2,000 consumers, hospital executives, nurses and physicians, the report reflects stakeholder sentiments about cost, variability (in costs and care) and the outcomes attributable to these variabilities. It also reaffirms healthcare's prominence in the American psyche, with 73% of respondents saying "healthcare will be a main factor when they choose the presidential candidate who gets their vote in 2020."

The survey echoes findings from other studies, with respondents saying that "there is a lack of transparency in the pricing of healthcare services (87%)" and that many "have not moved forward with medical treatment because they were concerned about the cost to them (43%)." It also points out that the majority of physicians and nurses (79%) say that "the cost to the patient influences treatment options they choose or recommend for patients."

The healthcare industry and its patients are in an untenable situation. Patients can't learn in advance what their treatment will cost, so they are assuming they can't afford it. Because physicians (and other hospital employees) are also in the dark about price, they are unable to explore more affordable treatment options to help assure patients that care is attainable. As a result, patients either avoid care, abandon care or wait until they can't wait any longer (when prices are at their highest). The outcomes for every stakeholder are unsatisfactory. Patients don't get the care they need or become financially distressed. Providers are deprived of patient volumes and important revenues. And the community's population's health may be compromised.

Stakeholder pain doesn't end there. Because of high patient out-of-pocket costs, even those who do seek care often find it difficult to pay. Because their provider doesn't know in advance what the patient's care will cost, they are unable to offer a financial plan that would lighten the patient's financial burden and improve the probability of payment. This results in high patient bad debt and high collection costs. Costs that often include financial third parties charged with collecting unpaid patient balances. In an industry that is coming around to the fact that patient relationships are a provider's most valuable asset, outsourcing those relationships should be considered very carefully.

The Price Transparency Challenge

It is one thing to recognize that healthcare's lack of price transparency is a problem that needs to be fixed. Actually fixing it is another matter entirely. Prices in healthcare are extraordinarily complex and highly variable. Insurance companies (payers) negotiate with preferred providers for different rates for treatment and prescription drugs. Diagnoses change and prescribed treatments sometimes need to be revised. And underlying all these uncertainties are intractably high costs for skilled personnel, prescriptions, equipment and real estate. Another consideration is competition. As healthcare's adoption of estimation grows, patients are demonstrating a preference for providers that provide high quality care at an affordable price.

Nevertheless, some innovative healthcare providers are finding ways to create price estimates that enhance customer service, improve accessibility and lead to a higher probability of payment. One such provider is UCHealth in Colorado, a system that was recognized in early 2019 as an exemplar of hospitals that are going above CMS requirements for price transparency by CMS Administrator Seema Verna. Health Leaders Media published a two-part interview with UC Health's VP of Revenue Cycle, Melissa Greer, earlier this year. In it, UC Health's methodology for designing and delivering increasingly reliable price estimates is described.

UCHealth and others have developed estimation protocols that take healthcare's inherent variability into account. By tracking estimated and actual costs for a growing number of frequently offered procedures over time, they are continually improving the accuracy of their estimates. This leads to higher customer (patient) confidence and more productive conversations between patients and UCHealth's financial personnel. Conversations that focus on finding ways to make care more affordable. Additionally, in our view, price estimates are an invaluable reference for physicians, who are now equipped with information to help ensure that finances do not present an obstacle to their patients' care.

Getting There from Here

Although it would be naïve to suggest that there isn't work involved, the journey to provider price transparency is not as long or difficult as one might think. Many of the tools hospitals need are already in place. Closing the gap between where they are and where they want to be requires a tool that unites their disparate Electronic Health Record (EHR) and revenue cycle systems so estimates can be calculated and delivered, and patients' financial experiences can be more satisfactorily managed.

In a Loyale article published earlier this year titled "What a Healthcare Platform Is and Why It Should Matter to You", we detailed the system fragmentation that frustrates hospitals' attempts to improve patients' financial experiences and exacerbates physician burnout. In the article, the power of technology platforms to overcome fragmentation is offered as the surest, shortest path to revenue cycle and patient engagement success. The beauty of this approach is that many of the systems that are needed are already in place. What's needed is a solution that brings them together to deliver seamless, holistic experiences that physicians and their patients want.

Loyale Healthcare, for example, has developed a technology platform focused exclusively on patient financial engagement. Operating as the hub of a patient's financial experience, the Loyale solution integrates the EHR system with point solutions for real-time insurance eligibility, price estimation, digital communications, billing and payments. Significantly, the system uses data-derived intelligence to automatically design payment and communication plans that are customized to each patient's preferences and circumstances. The most widely deployed Patient Financial Engagement platform in the industry, Loyale is demonstrating that hospitals and other providers can reduce costs, improve patient experiences and drive better outcomes – for patients and their physicians.

When it comes to price transparency, patients and their providers have a lot at stake. CMS compliance for one thing, certainly. But much more important is being able to provide useful information that patients and their caregivers can depend on so money doesn't represent a barrier to well-being. At Loyale, we're proud to work with some of the industry's most innovative health systems to make this vision a reality. Frankly, it's about time.

Kevin Fleming is the CEO of Loyale Healthcare

About Loyale

Loyale Patient Financial Manager™ is a comprehensive patient financial engagement technology platform leveraging a suite of configurable solution components including predictive analytics, intelligent workflows, multiple patient financing vehicles, communications, payments, digital front doors and other key capabilities.

Loyale Healthcare is committed to a mission of turning patient responsibility into lasting loyalty for its healthcare provider customers. Based in Lafayette, California, Loyale and its leadership team bring 27 years of expertise delivering leading financial engagement solutions for complex business environments. Loyale currently serves approximately 12,000 healthcare providers across 48 states. Loyale recently announced an Enterprise level strategic partnership with Parallon including deployment of its industry leading technology to all HCA hospitals and Physician Groups.

SOURCE Loyale Healthcare