“Consumerism” is a hot topic in healthcare with patients seeking a more convenient and patient-friendly experience when seeing the doctor. Digital tools for patient engagement, appointments, telehealth, etc. are certainly in the mix. What is noticeably absent in the consumerization of healthcare conversation is an informed discussion as to why price transparency must be a cornerstone strategy for effective consumer-friendly healthcare services.
At the recent American Association of Orthopedic Executives(AAOE) conference, Dr. Michael Havig tackled this topic head-on. Given the rising costs of health insurance, the soaring number of patients with HDHP’s, and the fact that patients are taking on more responsibility for costs of care, medical payments remain the major obstacle for healthcare consumerization. With over $491 billion in out of pocket spend in 2021, it is no surprise that price transparency ranks at the top of the list of patient demands when it comes to what they want in their healthcare experience.
When people talk about price transparency in healthcare, they rightly talk about the "Hospital Price Transparency Act" and the “No Surprises Act” with their new mandates around posting prices and the prohibition against surprise billings. But from an independent practice perspective, there is more to price transparency than just avoiding surprise billings. The transparent pricing of care, especially in specialty services such as orthopedics, serves to better engage health consumers and encourage them to shop for the most effective lowest cost care available to them. Additionally, by eliminating the “pricing black box” from conversation about an important healthcare treatment, it encourages a better understanding of care options available, and helps patients prepare for their procedures and recovery.
Unfortunately, most practices are anything but consumer friendly. Payers and patients want a consumer-friendly digital experience, but our practices are stuck in the past. Many clinics make it impossible for patients to get a timely appointment and often turn away direct pay patients. By “closing the door on these patients” Dr, Havig contends that our practices have literally opened another door to competitors.
The statistics are clear, and concerning:
With self-funded employer spending over $800B and covering over 100 Million patients, it’s no surprise to see the land rush with major retailers, insurers, and even technology companies adding 1,000’s of locations offering primary care alternatives. Further, new technologies for virtual visits have replaced office visits. These retail and digital practices are aiming to “own the patient” and have the power to make specialist referrals.Patients are being siphoned away to these companies because, as stated in a recent New York Times article, “The appeal is simple: Despite their lowly status, primary care doctors oversee vast numbers of patients, who bring business and profits to a hospital system, a health insurer or a pharmacy outfit eyeing expansion."
The crucial question that needs to be addressed is how do we retain these patients and partner with select healthcare entities to our benefit? Like most worthwhile endeavors, price transparency starts with the fundamentals of how practices can develop consumer-friendly pricing that is clear, understandable, and online. Dr. Havig outlined several simple building blocks that can transform a practice into one where patients shop for healthcare like other products, select a service, and securely checkout.
Today, the challenges are clear as practices must post transparent pricing to be compliant with federal law, and today’s patients are demanding that practices adopt online payment models. Patients continue to be surprised by their medical bills and are sickened by the stress caused by their byzantine complexity. The landscape is changing, and non-traditional competitors are encroaching.
The rewards are clear as well. Consumerism adds real revenue to your practice by attracting new patients and payers who want a modern and patient-friendly approach to care. A consumerization strategy, grounded in price transparency, will be an essential strategy to help assure the future success and ongoing survival of medical practices across the spectrum.
