Pricing Transparency is Not Enough
Make it accessible, make it patient friendly, and make it a tool to drive volume.
With the arrival of the second federal pricing transparency law in just two years, it’s clear that the federal government is serious about getting health care providers to share their prices.
When the state laws first started coming out, only 15-30% of organizations complied. Most did so in a rather perfunctory fashion, by posting a big file in a hard to read format somewhere deep on their website.
When the 2019 federal law came into effect, we saw a more varied response. While many chose not to post prices or took the “just try to find it” approach, others have embraced the law as an opportunity to build patient trust—and they have actually seen growing volume and positive press.
Rather than checking the “machine readable” box, these organizations have already stepped toward patient accessible and searchable web interfaces. Some are even including how they compare to other players in the market.
The most advanced are taking the opportunity to highlight high-quality, favorable health outcomes as well as the volume of cases. They are building trust with the community and building higher volumes as a result!
Organizations that are openly and proudly publishing their prices typically share two characteristics:
1. They have done diligent reviews of the chargemasters.
They know how they compare to the market. They know how their prices compare to cost. (Are they within the realm of rationale and explainable?) They know how they compare to fee schedules and if they are being reimbursed less than they negotiated. They know if prices differ within the health system in a way that is explainable. (Think affluent tertiary care pricing v. a community hospital in an underprivileged neighborhood.)
2. They have intentionally set their prices.
They know the financial impact of their puts-and-takes. Many have hired consultants to help, but as such, they are now on the consultant merry-go-round: they have to do this each year.
Some have invested in industrial-strength toolsets that enable them to compare prices across all of their CDMs, to compare to market, to compare to cost and to easily model pricing changes – even multiple, layered, scenarios through actual payer terms.
In short… they are confident. They are intentional. They know what they are posting and know what objectives they want to accomplish.
So far, it’s a strategy that is working.