That doesn't mean consumers don't want the information, based on a poll conducted this year by what is now Truven Health Analytics and National Public Radio. The poll of about 3,000 Americans, conducted in the first two weeks of April, showed that 16.2% of respondents or respondent household members sought out pricing information before receiving healthcare services, up from 10.9% in a similar poll conducted in 2010.
“It appears as if there is a remarkable uptick in the role that price is playing in the decision-making process,” says Dr. Raymond Fabius, chief medical officer for Truven Health. Fabius says there are multiple drivers of this trend, including the greater availability of pricing information on the Internet and from health insurers.
The steady rise in consumer prices—especially for healthcare services, which typically outpace general inflation—is giving patients plenty of reason to become more price-conscious. Consumer healthcare prices, as measured by the Consumer Price Index, are 3.3% higher in the first seven months of this year.
For elective care, it does make sense to shop around, Fabius says. “We believe that transparency is one of the solutions to our healthcare crisis,” he says.
Hospitals, meanwhile, are working hard to cut expenses in anticipation of slower growth in reimbursement, tied in part to the elements of the Patient Protection and Affordable Care Act, but also because of the industry shift toward providing value-based care. And there are areas in a hospital's operations that often create significant opportunities to cut costs, says Will King, senior adviser for HFS Consultants. Hospitals often can save money through more efficient staffing practices, and some pay too little attention to insurer contract negotiations, he says. Nevertheless, “a 15% reduction is a lot,” King says.
Ayers says it was a lot of little things that Cleveland Regional did to achieve the savings, such as institute a telemedicine program and convert to all-private rooms. Ayers says that patients had been turned off by Cleveland Regional's room configuration in that many had two beds even though those beds were rarely used. They are reassured by the knowledge that they won't be sharing the room with another patient, he says.
Ayers notes that the hospital was not trying to undercut the competition, because there are no other hospitals within a 30-mile radius, he says.
When New Directions purchased the hospital from for-profit Community Health Systems for $900,000 in October 2011, it was losing about $11 million a year. Now the hospital is about breaking even, Ayers says, and that's without having to lay off staff, he adds.
Patients at Cleveland Regional are likely to appreciate the hospital passing along the savings, says Chad Mulvany, technical director of the Healthcare Financial Management Association's healthcare financial practices team for regulatory and reimbursement issues. There likely will be little benefit in its reporting of community benefits to the Internal Revenue service, though the price-cutting can engender a lot of goodwill in the community, he says.
“I suspect we're going to see a lot more of it,” Mulvany says.
The HFMA has been a backer of improved patient billing through its Patient-Friendly Billing project, and many hospitals have adjusted their rates for the uninsured and self-pay patients to levels that are more comparable to what Medicare or commercial insurers pay.
Cleveland Regional touted its price cut in a news release but that was the extent of its promotions, according to Ayers. While the announcement didn't get a lot of media attention, Ayers says there was a positive response from the community.
Marketing expert Stern says that actually marketing the price cut to consumers would have been a bad idea, because raising the issue of pricing threatens to turn healthcare into a commodity. Hospitals are better off promoting their services and quality, he says.
But Ayers says he disagrees with the suggestion that healthcare cannot be considered a commodity.
“This is about trying to make life a little easier” for uninsured patients, he says. “People with health insurance have the luxury of not thinking of healthcare as a commodity.”