Providers don't have to wait for new laws to deliver price transparency — Here's why

Due to the rise of high-deductible health plans, patients have become the third-largest payer group behind Medicare and Medicaid, according to Bill Krause, vice president and general manager of experience solutions at Change Healthcare.

With out-of-pocket healthcare costs on the rise, providers should help patients navigate both unexpected and expected fees to facilitate higher patient payment rates and care satisfaction.

Mr. Krause discussed how providers can do exactly that during an Oct. 30 webinar sponsored by Change Healthcare and hosted by Becker's Hospital Review. He was joined by Change Healthcare's Deanne Kasim, executive director of health policy, and Angela Evatt, senior manager of state health policy, who discussed the government's role in helping consumers navigate medical expenses.

Legislators are stepping in to prevent surprises

Balance billing, a practice also known as "surprise billing," has been targeted by lawmakers on both federal and state levels. President Donald Trump issued an executive order requiring price transparency in June and bipartisan legislation designed to encourage transparency has been introduced in both the U.S. House and the U.S. Senate, Ms. Kasim said.

"Of all these moving parts, the common threads are mandating payments for out-of-network providers when consumers had no choice or knowledge of the fact that there were out-of-network providers," Ms. Kasim said.

On the state level, over 140 bills addressing price transparency were introduced during the 2019 session, according to Ms. Evatt. Only about 18 have been passed into law so far, by just over a dozen states.

"These bills fall within three major categories, one being shop and reward programs," Ms. Evatt said. "These programs typically require payers to establish a program to allow patients to compare costs on specific shoppable services and rewards [patients] for choosing a lower-cost services."

Bills in a second category tend to create a centralized state authority that maintains a database of healthcare charges, and those in a third category require advance notice about charges and protections against surprise billing, she said.

If the patient won't be held financially responsible for surprise bills, there's debate as to who should be. Market-based benchmarks are one proposed solution, but it requires lawmakers to agree on what constitutes a "fair" benchmark calculation. The other option that's been proposed, arbitration, is also contentious.

Despite legal changes at the state and federal levels, most would agree that price transparency initiatives and protections against surprise billing must be relevant to the patient, accessible and easy to navigate.

Providers don't have to wait for new laws

While there are many unanswered questions when it comes to price transparency regulation, providers have an opportunity to take matters into their own hands — and it starts with understanding the patient perspective.

In today's market, patients seek information and make healthcare decisions differently than ever before — they go online, according to Mr. Krause. Yet many existing digital cost estimate solutions aren't reaching them; very few patients use price transparency tools, even when they're available. If you ask Mr. Krause, that's because these tools aren't suited to consumers' needs.

"Patients are seeking very simple approaches," he said. "Things that move along the lines of — in some patients' words — [a] McDonald's style menu of care options. People want to know what to expect on the bill before it comes, and to eliminate that surprise."

An effective price transparency tool will reduce friction, confusion and cost, according to Mr. Krause. It will provide information in a measured way, meeting patients' needs at each distinct stage in their decision-making journey — not overwhelming them with information all at once.

Mr. Krause outlined what information to provide at the three pre-treatment stages in a patient's decision-making journey:

1. Awareness of need. In this "window shopping" stage, patients need general price estimates.

2. Consideration. When a consumer is weighing different options to fill that medical need, it's appropriate to provide personalized pricing information. Reflect the patient's member benefit and provide access to resources for more information.

3. Commitment. In this stage, a consumer commits to a particular provider. Make price transparency "transaction ready" by offering payment options or incentives. The provider website can also feature a shopping cart that pulls line-item services into a single bill.


Overall, Mr. Krause's recommendations boil down to two action items for providers: create a retail-style shopping experience for medical procedures and provide price estimates that enable patients to access the information they need in a self-service manner. While lawmakers are taking steps toward making price transparency widespread in healthcare, providers can use consumer-focused strategies to get ahead of the game.

Click here to listen to the webinar.

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