Price Transparency: Where to Start

CG: What is the first step for providers that would like to be more transparent with their prices?

Jeff Jones: Clearly define the objectives for providing that transparency. In some cases, it may be strategic to engage consumers. Or it may be in response to market pressures from competitors, the media or government. But understand first why you are doing it and who will be utilizing the information.

Providers don't need to be in a rush to provide complete pricing for everything they offer. Understand what portion of your services are highly utilized, and of those services, determine which are going to be some of the most straightforward to publish. Focus on the 15 to 20 percent of your service types that account for 60 to 70 percent of your volume.

CG: What can the healthcare industry learn from others regarding price transparency?

JJ: Think about the airlines, automobile manufacturers, wireless companies, and fine dining restaurants. All of those entities have multiple elements that go into a final price. They have different methodologies, but in many cases, there's a base price and add-ons.

I think that is true in healthcare as well. In some cases, there will be variability. Flight prices, for example, depend on how far you're going and where you want to go ­­— even where you want to sit in the cabin.

It would be worth doing at least some basic consumer research, like we do in most other industries, to understand what consumers' expectations are and their current knowledge level, so that as you're putting your pricing together, you're doing it in a way that has the right level of information but also the right level of education.

CG: What is the biggest obstacle to achieving price transparency in healthcare?

JJ: Finding a way to make the information easily digestible for the health consumer, while also associating the value of the service provided. Because if you focus so much on just creating price transparency, but you haven't done enough to establish the value, it becomes a pure cost play.

There is also a question of choosing between comprehensive pricing or making the information easy and simple. In the near term, I would choose to make this information simple.

CG: How does the timing of the transition toward accountable care affect price disclosure?

JJ: In the near term, the effect is that increased coverage through accountable care is coming with higher deductibles. We are going to see consumers more interested in the pricing structures because they are financially responsible for a much greater portion of their care.

To discuss your organization's strategic challenges, contact Jeff at [email protected] or 503.347.0554.