By Howard Bright, vice president of patient engagement, RevSpring.
“Life keeps throwing me stones and I keep finding the diamonds.” – Ana Claudia Antunes
I appreciate that philosophy because it applies to so many situations, including the federal price transparency regulation that goes into effect on January 1, 2021. Many providers are dreading the new rule and all that complying with it will require (it’s hardly a secret that the industry has actively resisted the ruling). But a careful look can reveal “diamonds”— major competitive advantages, improved revenue collection and even increased patient loyalty—for hospitals that see and seize the opportunities.
It’s understandable considering the problems that many providers have experienced with price estimation tools in the past. To be clear, the ruling does not require hospitals to provide explicit price estimates. What it does mandate is the following:
“Make standard charges public in two files displayed prominently on the Internet and updated at least annually.”
One of those files must be “machine readable” (J-SON, XML, CSV) and include all “items and services.” The other must be a “consumer-friendly shoppable services file,” that uses plain language, descriptions and codes covering 70 CMS-specified items and services and an additional 230 hospital-specified items and services.
While that might sound relatively straightforward, most hospital administrators and revenue management leaders know that the devil, frequently, hides in the details. And when viewed through the lens of the patient, those details could prove to be tremendously overwhelming. Making the mandated information easy to access and patient specific—and even providing an interactive price shopping tool that gives patients simple ways to act—is where the competitive advantage lies for savvy hospitals and hospital systems.
In other words, don’t view the ruling simply as an onerous data requirement but, rather, as a communications and patient engagement opportunity. By providing data that is clear, concise, consistent, and easy for human beings to understand, not only will you meet a true consumer need you will set your hospital apart from competitors.
Most will probably do the bare minimum by publishing their insurance negotiated rates as the mandate requires and others will risk the consequences of non-compliance. In a recent webinar I provided on this topic, 36 percent of attendees said they were “still investigating options for how to comply with the ruling” and a shocking (at least to me) 8 percent said they had “not started yet.”
My 2021 prediction? Consumers will appreciate hospitals that not only publish the required rates, but who do so in an easy-to-read format. Patients also will value hospitals that provide a way to look up their personal insurance benefits, including their deductible and out-of-pocket responsibility, for a specific price estimate based on their unique financial situation.
Going this extra mile will give consumers a clearer picture of their financial responsibility and reduce “sticker shock” when their statement arrives 40 days or so after the service is completed. This scenario also means that hospitals will be in a strong position to give patients more options, more choices, and more knowledge to prepare them for their financial responsibilities following a service.
Now imagine a hospital going one step further along the price transparency road by giving consumers a clear indication of their confidence in the provided estimate once services are scheduled.
Everyone in healthcare knows that estimates can vary widely due to many variables such as incorrect procedure codes and things changing during procedures. Thanks to the evolution of predictive analytics, it’s now possible to score your confidence in an estimate much like the credit industry uses analytics to predict someone’s ability to pay.
Your goal should be to engage appropriately with a patient (or prospective patient) based on the confidence you have in their estimate. Appropriate engagement builds patient trust and loyalty. Here’s how it might work:
- For estimates with a high confidence score, it’s entirely appropriate to seek pre-payment of up to 100 percent before a service.
- Estimates with a medium confidence could lead to a flexible payment plan.
- Low confidence estimates should be communicated appropriately, which might include obtaining credit card information and/or an initial down payment.
If your hospital uses propensity to pay scoring, you also could align payment actions to truly meet the needs of patients: pay in full today and receive a discount, flexible payment options, partial payments, or possibly postponing elective procedures until the patient feels comfortable with the cost associated with it. Provide various payment method options: an online payment portal, text-to-pay, and well-designed printed statements. All these activities contribute to a factual pre-service financial experience that contributes to improvements in financial health for patients and providers
As the price transparency ruling deadline nears, apathy no longer is an option. Instead of resisting providing estimates due to accuracy challenges, roll with it by ranking estimates and giving patients different options based on your confidence. Most importantly, use data science technologies to inform decisions and communications. Doing so will allow you to use the estimation process to build trust, rather than erode it.
Other “diamonds” to be mined in the ruling: the opportunity to see what items and services are of interest in your market, and the ability to understand prospective patients who are “shopping” on your consumer-friendly site. If they choose to contact you directly by using a prominent “call to action” button, your hospital is in an excellent position to get them scheduled.
Doing these things not only will increase the likelihood of directly gaining a new patient, you may experience a “boomerang” effect since 65 percent of customers say their experience on a website is a very important factor in their willingness to recommend a brand to others.
“You must meet the challenge, rather than wish it were not before us,” former associate U.S. Supreme Court justice William J. Brennan Jr. once famously noted. I view the HHS price transparency ruling in a similar light.
Meeting the price transparency challenge means leveraging the situation to create an environment of clarity, responsibility, and enablement. Doing so can transform the opaque healthcare financial environment to one of transparency and trust, which patients will reward with loyalty, more timely payments, and referrals.