New Healthcare Price Transparency Tools Help Hospitals Cope with High-Deductibles and Bad Debt
DENVER – Feb. 18, 2016 – State legislators, consumer advocates and the media have taken U.S. hospitals to task for failing to give patients accurate estimates of their out-of-pocket costs prior to service. The widespread lack of price transparency in healthcare – unheard of in other consumer industries – stymies patients who need to plan ahead to pay their bills. Hospitals risk dissatisfied customers as well as an increase in bad debt at a time when they are already struggling to cope with historically low profit margins.
Under pressure from consumers, 39 states have recently passed price transparency regulations. Most require hospitals to post online the amount they charge insurers for their most common procedures. But these figures are highly misleading and often create an impression of price gouging.
Now, according to a new white paper from Recondo, hospitals have a way to achieve true price transparency without relying on inaccurate cost estimates from insurers. New price transparency technology outlined in “The Self-Service Pricing Calculator: The Solution for Pricing Transparency” comes just in time to help hospitals meet their regulatory and consumer requirements.
“The number of Americans with high-deductible insurance plans has skyrocketed since 2008. Today almost a quarter of all Americans with commercial insurance have significantly high co-pays for hospital care,” said Recondo CEO Jay Deady, one of the white paper’s authors. “That’s a huge red flag for an industry where margins are declining and bad debt is on the rise. Hospitals need a solution that enables patients to plan for their financial obligations so they can reduce debt collection problems for everyone. The good news is, new technologies are available to empower hospitals to take the price transparency bull by the horns.”
Provider-centric, Self-service pricing calculators
Recondo’s pricing calculator enables consumers to generate out-of-pocket estimates themselves from an online calculator on the provider’s website, or portal. The white paper reveals several important capabilities of the new provider-centric calculator that differentiates it from those provided by insurance companies or employers:
- It provides a price estimate based on the consumer’s current levels of insurance coverage, as well as the individual hospital’s negotiated rates with insurers.
- The process is powered by rules-based engines that automatically query, retrieve and combine data from payer portals with the hospital’s charge master data and payer contracts.
- Analytics plays a critical role in ensuring the estimate is accurate, including analysis of previously adjudicated claims to identify variances.
The process for patients can be quick and hassle-free. Patients simply input their names, insurance ID number, and two to three other data elements. Within 10 to 45 seconds, a complete and accurate estimate appears, giving them immediate, line-item insight into what they will owe post-procedure.
The white paper details the technology underpinnings of self-service pricing tools, as well as the tools’ ability to solve other challenges related to price transparency:
- Proprietary Pricing Kept Private: When it comes to price transparency, self-service price transparency tools solve one of the most persistent challenges hospitals face: how to provide accurate and proprietary pricing information to healthcare consumers, while keeping the information out of the hands of competitors. Hospitals control the tools and require patient-unique information to be entered before an estimate is generated, so not just anyone can use the calculators.
- Enhances patient satisfaction: Self-service price calculators also appeal to today’s information-driven consumers. When an accurate estimate of everything from airfare to mortgages is instantly available online, it’s hard for consumers to understand why healthcare providers cannot provide this same transparency and ease-of-use.
- Increases patient preparedness for payment: One of the most promising advantages of a self-service price calculator is its potential to engage consumers at various points throughout the process. After generating a price estimate, for example, the calculator could prompt high-deductible and self-pay consumers to view payment plan options. It could even engage those patients with concerns about their ability to pay and schedule time with a financial counselor.
- Enhances referring physician satisfaction: Self-service calculators arm physicians with price information that not only generates a high level of patient loyalty but also helps patients financially prepare for their healthcare needs prior to receiving services. Both of these factors lead to enhanced referring physician satisfaction.
According to a 2015 report from Public Agenda, “How Much Will It Cost? How Americans Use Prices in Health Care,” patients who clearly understand their financial responsibility not only are better prepared to pay but are also more likely to schedule rather than delay urgently needed care.
“Price transparency is something whose time has come and fortunately it’s now easy for patients to financially manage their care using the same kind of self-service tools they’ve come to expect from their service providers,” said Deady.
Recondo’s cloud-based solutions deliver financial clarity to all participants within the healthcare revenue cycle. Named the No. 1 hottest company in healthcare by Modern Healthcare in 2013 and a Cool Vendor for Healthcare Providers 2015 by Gartner, Recondo empowers more than 900 hospitals and health systems with solutions that connect providers with over 90% of the nation’s payers and their patients to ensure proper and accelerated payments across the care continuum, at significantly lower costs. The company’s software and expertise streamline operations and achieve efficiencies and cost savings from patient access through claim status to payment processing—a continuum today where inaccuracy and inefficiencies currently cost U.S. healthcare a staggering $480 billion per year. Visit us at www.recondotech.com.