From industry media to your hometown newspaper, news about the push for transparency in healthcare pricing is hard to miss these days. What is important to understand is that this emphasis on transparency is here to stay. The next step—indeed, the only step—for healthcare organizations is to embrace this new environment.
The Healthcare Financial Management Association has been beating the drum on transparency for years. Our Patient Friendly Billing project and other HFMA resources have helped all healthcare stakeholders—hospitals, physicians, payers, employers, governments and consumers—to understand and address the barriers that stand between the current system and positive patient financial interactions, tackling issues ranging from rational pricing to providing estimates of patient payment responsibility to communicating about financial assistance.
Despite these efforts, an ugly fact remains. Americans overwhelmingly view healthcare pricing as confusing, convoluted and even secretive. When patients call healthcare organizations to inquire about the price of a procedure, providers are often unable or unwilling to provide that information. What has created this situation? It is a number of factors, from government regulations to antitrust legislation to institutional cultures.
The overwhelming majority of healthcare professionals are good, rational actors who are simply doing their best to function in a system that has become absurd. Today, nearly half of hospital revenue comes from Medicare, Medicaid and other government programs, yet the majority of providers lose money on these patients. Hospitals also often lose money in the course of providing vital services that communities demand, such as burn units and inpatient psychiatric units. As in other business environments, shortfalls such as these must result in price adjustments elsewhere. In the case of healthcare, the goal is simply to achieve a modest margin—enough to ensure an organization has the financial health to make the investments necessary for high-quality care.