Price Transparency Spotlight
Price transparency is frequently discussed in the media as employer and consumer groups clamor for a competitive healthcare marketplace that functions like the rest of the economy. Fierce opposition primarily from health systems and traditional insurance plans has slowed the pace of this change and convinced many practice leaders that we still have plenty of time to respond. When considered in the list of competing priorities that includes navigating regulatory changes, physician comp formulas, daily practice operations, collecting outcomes, maintaining patient satisfaction, recruiting physicians and keeping peace with the local hospitals all in the midst of a pandemic, making time to create a transparent price structure most often falls to the bottom.
Establishing price transparency within a practice is hard, but it matters.
The OrthoForum’s AnnMargaret McCraw, CEO of Midlands Orthopaedics & Neurosurgery, can attest to the difficulty and importance. “Surgical bundles are the hardest because multiple services and providers are involved: office-based consult with x-rays, surgeons, ASCs, implants and anesthesia. Ideally, the practice owns the bundle and pays all other parties. Still, you must achieve consensus with those parties to establish a price. It’s tedious work, but not doing it means you are willing to lose local self-pay or employer-steered patients to practices in the next town or several states away. Perhaps only a few patients this year, but momentum is building to seek out physicians who are willing to display a price.”
In addition to building the bundles, charge entry and reporting without CPTs is tricky since we are conditioned to evaluate everything we do with CPTs and RVUs. Administering FFS and alternative payments simultaneously creates multiple workflows and reduces back-end efficiency. Beyond that, local market factors must be considered. AnnMargaret suggests reflecting on any unintended market consequences at the outset so your strategy can proactively mitigate them:
“Is your market dominated by one large insurer, hospital or several large employers? Does your practice have many % of charge-based contracts or accept a lot of personal injury work? How does transparency impact those relationships?”
Despite the hurdles, price transparency is a key differentiator. “Similar to online scheduling quickly becoming a core offering even while the majority of patients still call for an appointment,” AnnMargaret believes, “displaying prices will become a hallmark of practices perceived to be high quality and customer-focused even by patients who continue to file private insurance.”
Self-funded communities often have a disdain towards the traditional BUCAH model, pushing patients towards practices with published prices even when closer groups could offer the same procedure at an equivalent value. Simply put, self-funded plan administrators aren’t going to call you to find out the cost for various procedures. A known price tag steers patients to the perceived ‘good guy’ in an otherwise secretive healthcare marketplace.
Furthermore, referrals from Direct Primary Care (DPC) physicians to practices with published payment models is on the rise. DPC physicians have led the provider community in posting prices and they like to support specialists who do the same. Lastly, transparency rulemaking and legislation has bi-partisan support. The DC District Court just upheld CMS authority to require hospitals to publish prices, including negotiated rates with insurers effective January 2021.
The Healthcare PRICE Transparency Act was introduced to the Senate last month, requiring hospitals and insurers to post negotiated rates for providers, further pushing healthcare to become a real marketplace. While opposition to these measures will rage on, private practices are uniquely positioned to embrace a model that all consumers respect and appreciate whether or not they have insurance.
Understanding the value, the question then becomes, “How to begin?”
Don’t let the prospect of building bundles or case rates deter you from getting started. Consider beginning with office-based services. Locate partners and platforms that relieve some of the burdens. As AnnMargaret reflects, “We could have started sooner if I had focused on office-based rates first as they are simply easier to build. Also, don’t wait until you have a comprehensive offering before you publish. Tackle office visits, injections, MRI and therapy first. Add surgeries as you develop them. Just get started.”
