Guide to Financial Transparency in Healthcare  

Thanks to the increasing complexity of healthcare costs, price transparency has become a major industry initiative. Several pieces of legislation are changing the way healthcare organizations must present pricing information, ideally leading to a better patient journey and more trust between patients and providers. With the right systems in place, providers can build this journey, improve engagement with patients and ultimately boost revenue.

Let’s explore the landscape of hospital price transparency and how your organization can stay prepared.

What Is Price Transparency in Healthcare?

Healthcare price transparency is the practice of providing patients with reliable estimates for the costs of their care. Most providers and insurance groups must comply with legislation around offering this information, but all healthcare organizations can benefit from the open and upfront communication that price transparency facilitates.

Executive Summary

To survive and hopefully thrive, healthcare organizations must adapt to the market. 

Traditionally, a healthcare provider’s ability to maximize payer revenue determined its financial success. Pricing transparency in healthcare was centered on a payer’s needs, not a patient’s. For many insured patients, bills were treated as “informational only” since the cost passed between a healthcare provider and payer, leaving the patient out of the transactions.

But things have changed. The patient is becoming a more important part of the payer mix for many healthcare providers’ revenue cycles. With this change in revenue composition comes a need for providers to put patients at the center of their payment platform strategies.

More and more providers are investing in technology that will transform the patient experience, especially when it comes to the payment process. Hospital electronic health record (EHR) systems serve as the foundation for this technology.

The Value of Interoperability

With EHR systems in place, healthcare providers are looking to optimize interoperability to provide better care while improving the patient experience and maximizing their ROI. While important to the continuity of care, interoperability also plays a role in the overall patient experience and healthcare price transparency. When done right, it puts patients’ medical and financial information in their hands so they can make informed decisions about their care.  

Even though EHRs have their own patient payment portals or other patient engagement payment functionality, providers still invest a tremendous amount of time to get multiple bolt-on technologies to work together. 

“It takes a lot of my mental energy and time to make sure all of these things work well together. I need to have the confidence in whom I’m working with to make all of these elements work well,” says one neurology practice administrator with 12 providers.

Solving the Problem With Unified Solutions

An intriguing solution is a unified patient platform that acts as a one-stop shop from a patient perspective, yet interacts seamlessly with existing EHRs. This kind of system can provide patient engagement tools while supporting price transparency tools for easy patient access.

Here’s what one orthopedic Revenue Cycle Director with about 80 providers had to say about unified solutions: “It’s a genius thought to integrate front-end and back-end. We struggle horribly with the giant chasm between what happens on the front end and what we get on the back end… It saves everyone time and money to get the information correct the first time. It makes the patient experience better, and we get paid more quickly.”

Even though most providers see the value in a unified patient solution, they’re hesitant to make the switch unless there’s a compelling return on investment (ROI), the ability to integrate seamlessly with their EHR system, and an improvement to the patient experience. However, this is easier said than done. The pressure to meet government regulations, payer rules and patient expectations makes it a significant challenge. But with the right approach, it’s possible.

The Evolution of Healthcare Price Transparency Solutions

Historically, the health system has been a business-to-business (B2B) payment model. A healthcare provider’s revenue largely depended on how well it managed the flow of claims from its billing system to a payer’s — government or private — claim processing center.

Until recently, payer rules, regulations and contracts dictated the level of data transparency provided for billing information, not patients. Since insured patients bore a small percentage of their healthcare expenses, they weren’t overly concerned with rising costs. Unless a patient’s insurance plan denied a specific service or treatment and shifted the financial responsibility to the patient, billing disputes stayed between providers and payers.

This B2B model offered structure, security and predictability for healthcare providers regarding revenue. Fewer payers were in the market, so healthcare facilities could easily adjust their billing operations to meet expectations. Providers didn’t need to worry about payers’ credit risk or payment timing. Communication channels were easier to manage as well.

From B2B to B2C

As more payers and regulations entered the healthcare payment space, the pricing models grew in complexity. The price for treatment and the actual cost of treatment started to vary significantly depending on the insurance plan. Billing processes and systems centered on data transparency from a payer’s perspective, not a patient’s. This contributed to an opaque pricing model from a consumer perspective. Since patients didn’t approach healthcare like consumers, this lack of transparency had minimal impact on a provider’s revenue and patient satisfaction.

However, that’s not the case anymore. Healthcare continues to move to a business-to-consumer (B2C) model where patients play a significant role in providers’ payment process.  

Yet, many providers’ payment processes, technology and systems center on payers rather than patients. Payers act like “Oz” with their rules and regulations impacting the entire patient experience, yet their presence remains invisible. They drive volume capacity and patient communications — from convoluted pricing models to confusing statements laden with medical billing jargon, their presence is felt everywhere.

This payer-centric approach led to less-than-ideal patient experiences, especially with the billing process. The systems and processes put in place to meet payers’ payment needs aren’t meeting patients’ needs.

The Shift Toward Patient-First Technology

While several improvements have been made to the billing process, today’s patients are still confused and frustrated — 56% of patients would consider switching healthcare providers for a better payment experience.

The healthcare financial landscape continues to change with patients at the center. For the past 20 years, healthcare consumerism has taken hold. The internet has played a big role in shifting the market to a consumer model. Patients can research and compare providers based on customer satisfaction scores and reviews.

Also, the emergence of the EHR played a big role in the shift to a patient-centric model. The need to provide more transparency across all aspects of healthcare continues to grow. Patients expect real-time access to their medical records, testing results, billing and other important information.

When it comes to financial transparency, there has been a call for the healthcare industry to step up its game, especially providers and payers.  

Why Should Healthcare Providers Achieve Price Transparency?

Many different influences have made pricing transparency a necessity for healthcare providers:

• Rising healthcare costs: More and more U.S. healthcare consumers worry about how to pay for their medical expenses. A 2024 KFF Health Tracking Poll found that 74% of Americans are concerned about being able to afford unexpected medical bills or the costs of healthcare services.
• Public distrust: A West Health-Gallup poll found more than 70% of Americans agree hospitals shouldn’t be able to charge more for the same care and services provided, regardless of where that care is provided. Americans are concerned about rising healthcare costs, and they blame healthcare providers’ charging practices. 
• Government pressure: With costs being the top healthcare concern for voters, the government continues to pressure providers to be more upfront with their billing practices. From the 2019 Hospital Price Transparency rule to the No Surprises Act of 2022, the Centers for Medicare & Medicaid Services (CMS) has implemented requirements to help consumers better plan, understand and pay their bills. In July 2022, most health plans were required to provide estimates for services. The industry can expect further regulatory changes toward supporting a more consumeristic, patient-centric payment model. 
• The shift of financial responsibility to patients: The shift of financial responsibility from payers to patients continues to grow. Patient out-of-pocket expenses are expected to grow 2.9% per year, reaching a high of $152 out-of-pocket expense by 2032 — a 24.6% increase from 2024. Almost half of the U.S. workforce is enrolled in a high-deductible health plan (HDHP). Patients have more “skin in the game” regarding their healthcare costs, giving them higher expectations and a consumer-minded approach.
• Industry disruptors: Innovative companies like Google, Apple and CVS are challenging the status quo within healthcare. They’re creating new patient-centric technologies like artificial intelligence (AI) diagnoses and forging strategic partnerships with insurance plans. 

All of these factors have contributed to consumer-minded patients with increased expectations for their healthcare experiences.

Best Practices for Financial Transparency for Providers

Financial transparency might start with a simple concept, but it can be difficult to execute. At the end of the day, you need to invest in the right people, processes and technology.  

1. Prioritize Adaptable and Digital Patient Communication

When it comes to communication, the earlier, the better. Don’t wait to get critical information from your patients until they check in. Patients can complete most, if not all, check-in processes before showing up at your office. Filling out paperwork at the office should be the exception, not the rule.

Your patient communication strategy should also incorporate engagement intelligence that helps you learn from your patients and connect with them more effectively. For example, a patient might be more likely to pay when you contact them at a certain time of day. Engagement intelligence tools allow you to collect these insights and reach out in the way that best encourages engagement.

2. Create a Fully Connected Patient Ecosystem

To achieve optimal financial transparency, you must figure out how to get your technology tools to work together as a unified patient platform and support hospital price transparency compliance. Patients want access to their entire financial portfolio, from estimates to outstanding bills. They want the provider to have consistent information and a seamless integration.

With this approach, patients can access the same data regardless of the communication method or the department they’ve contacted. Whether a patient uses a chat feature, phone call or text message, they will receive the same level of service and information accuracy. This consistency also applies to information received from different departments or staff members. 

In a disconnected system, patients often receive conflicting information or have the frustrating experience of repeating their story to multiple parties. A seamless, unified patient ecosystem prevents these situations, instead offering dependable information at all touchpoints.

3. Implement Fast, Real-Time Integration and Automation

The challenge lies in creating a unified patient platform when you’ve already invested in an expensive EHR. This is where a comprehensive patient payment platform comes in. Look for a holistic patient platform technology solution that can integrate quickly and accurately and work in tandem with your EHR system. 

Best Practices for Healthcare Financial Transparency for Patients

Healthcare financial transparency empowers your patients to make informed decisions about their own care. Ensuring your practice is financially transparent benefits patients and your organization’s reputation. Here are some best practices to help you do this.

1. Foster Open Communication  

Open communication is the foundation for financial transparency in any organization. Encourage patients to ask questions about costs and billing. Answer clearly without using industry terms so patients understand the full costs of treatments. Using visual aids, plain language summaries and other educational materials can help. 

2. Provide a Full Explanation of Benefits and Coverage

Many patients struggle to understand their insurance benefits and coverage. Lengthy and complex policies can be frustrating to skim through or understand. Providers can meet their patients halfway, giving detailed explanations about their insurance costs so they know exactly what their policy covers. These should include thorough explanations of: 

• Co-pays
• Deductibles
• Out-of-pocket maximums

3. Offer Itemized Billing and Cost Breakdowns

To promote total financial transparency, patients will need easy access to their billing information. This means providing your patients with clear, jargon-free billing statements outlining the exact costs of different services that factor into the total cost of their care.  

Billing information can also be provided in an easier format, such as graphs or charts. You can use technology to help, like patient payment portals or mobile apps, as patients can quickly view their statements and pay in one place. 

4. Promote Education and Assistance Programs

Healthcare costs can be burdensome for many patients, but financial counseling services or educational resources can help. For example, providers can offer the following services for patients:  

• Help with understanding and choosing payment plans
• Discounts for uninsured patients
• Guidance on how to access financial aid or government assistance

A live chat feature can be helpful, where patients can connect with patient payment specialists, ask about bills and make payments. 

5. Be Clear About Out-Of-Network Costs

Patients should know how much it will cost to receive care from out-of-network providers. Providers should let patients know if their insurance plan will cover costs provided by both affiliated and contracted providers. They should inform patients about out-of-network charges that could apply, being fully transparent every step of the way.  

6. Offer Easy Payment Options

As patient consumerism rises, organizations should be flexible in their payment options, just like any other business. This can promote more transparency, making it easy for patients to pay and understand their bills. Easy, digital payment options can include: 

• Integrated patient payment portals
• Mobile pay options
• Text to pay
• Photo capture bill payments
• QR-enabled statements
• Insurance Capture and Verification

How Millennia Can Help Healthcare Facilities With Financial Transparency

The demand for financial transparency in healthcare will continue to grow. With increased customer expectations and government pressure compounded by growing patient out-of-pocket expenses, providers must create simple, adaptable and seamless patient payment platforms. Patients will need a one-stop shop to get billing information and payment options.  

Even though most providers already have EHRs, many do not optimize the patient experience in the payment space. With a unified patient platform that works with existing EHRs, providers can meet and exceed patient expectations while generating a significant ROI. The providers who get ahead in the payment space will put themselves in a great position to handle the changing patient financial situations in the future. 

Millennia Patient Payment Solution provides the experience today’s patients expect. We help providers simplify financial transparency through a platform that integrates with your existing EHR. Engage your patients with tools for easy-access statements, secure payment options and much more. Millennia can boost your average patient payment collections by 100%.

Request your consultation today to see how Millennia can help you offer a more transparent and connected experience.

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