Putting a price on transparency

It’s a story we’ve heard before. Maria was on a ski trip with her friends when she hit a patch of ice and fell, tweaking her shoulder in the process. She waited a few days to see if her mobility would improve, but it soon became clear that she will have to visit a doctor soon. Maria’s primary care physician provided multiple referrals, but she was surprised to discover that few of the recommended providers had price or quality information readily available on their website. Even when she called, she was only referred to a hard-to-interpret set of list prices and told to contact her insurer.

Instead, imagine a world where Maria has at her fingertips all the information she needs to make a health care decision. Using her mobile device, she can pull up an app, enter her location and some basic qualifying information, and hit “search” to instantly review provider ratings and list prices and compare out-of-pocket (OOP) estimates. Everything is organized, clearly defined, and easy to understand. Once she picks her provider, she is directed to a patient portal where she can schedule an appointment, upload images, preregister, and even prepay for her visit to make check-in a breeze. In this utopic vision, Maria’s health care experience feels personalized and uniquely tailored to her medical and financial needs. It is the experience and validation many of us look for before making much less critical decisions such as which phone to buy or which hotel to stay in on vacation. This is a world in which Maria can quickly compare a handful of imaging centers in her area and make a decision based on meaningful information, all without leaving the comfort of her couch.

For many, this world seems like a distant fantasy. Today’s health care reality reflects the status quo of distrust, doubt, and uncertainty that many American patients experience every day.

There is a growing disconnect between patients wanting to shop for their care and hospitals fighting to keep prices a secret.¹ Studies show that 60% of patients are more likely to choose a provider that publishes its prices in comparison to the local market,² yet 75% of respondents in a recent Harvard survey said they were not aware of an existing resource that would allow them to compare costs across different providers.³ Not only was Maria frustrated that she couldn’t find price and quality data for the radiologists, she questioned the underlying reasons for its absence, wondering why providers seem to intentionally make it as difficult as possible. Patients aren’t just dissatisfied anymore—many are becoming fearful and distrustful of a system that seems to be purposefully obscuring information.

One way to regain Maria’s trust is to give her more control over her health care decisions,⁴ and achieving that level of control requires more information transparency on the part of health care providers. These changes in consumer expectations, paired with disruptive regulation, and even the recent COVID-19 pandemic, are forcing plans and providers to evaluate the intersection points of pricing with their patients. In order to drive meaningful patient engagement, providers should focus on leveraging their brand equity in the market and pair consumer-friendly pricing information with quality metrics and outcomes in a truly authentic manner. We believe the transparency imperative presents an opportunity for consumer engagement and can result in improvements to patient satisfaction and experience, rebuilding consumer trust, and, ultimately, increasing market share.

An executive order⁵ signed by President Trump on June 24, 2019 required the secretary of Health and Human Services to propose regulation that takes a critical step toward pricing transparency in health care. The new regulations, set to go into effect January 1, 2021, require hospitals to publish a list of all standard hospital charges, including patient responsibility estimates and negotiated rates with payors, in a consumer-friendly format. While many providers likely reacted in shock to the recent Federal judges’ rejection of the American Hospital Association lawsuit⁶ filed to dispute this requirement, initiating a legal battle or meeting the bare minimum requirement is only a short-term solution. It is important to take a step back and observe the larger market landscape: Information transparency efforts are intended to accelerate market disruption, and providers that ignore the new requirements may be caught in an unfavorable competitive position trying to regain market share from their more innovative counterparts. To address public trust and regulatory considerations, providers must drive toward greater transparency in their patient communications, their charge structures, and their overall pricing strategy.

Download Deloitte’s full report to learn how more transparent, consumer-centric pricing can drive growth.
 

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