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Guide to Health Care Price Transparency in 2023

01 Guide Hospital Price Transparency

Guide to Health Care Transparency in 2023

Thanks to the increasing complexity of health care costs, price transparency has become a major industry initiative. Several pieces of legislation are changing the way health care 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 in 2023 and how your organization can stay prepared.

What Is Price Transparency in Health Care?

Health care price transparency refers to 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 health care organizations can benefit from the open and upfront communication that price transparency facilitates.

Executive Summary

Like it or not, health care is a business. And like any business, to survive and hopefully thrive, you must adapt to the market. 

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

But things have changed. The patient is becoming a more important part of the payor mix for many health care 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

As of 2021, 78% of office-based physicians and 96% of hospitals had certified EHR systems. Just ten years prior, only about a quarter of hospitals and a third of physicians had EHRs. With EHR systems in place, health care providers are looking to optimize interoperability to provide better care while improving the patient experience and maximizing their ROI.

The importance of interoperability continues to grow across health care. Not only is interoperability important to the continuity of care, but it plays a role in the overall patient experience and health care price transparency. When done right, it puts patients’ medical and financial information in their hands so they can make informed decisions about their care.  

Over the next five years, CIOs plan to make big investments in optimizing their EHR and interoperability. When providers were asked if they’d consider upgrading their current technology or switching to a new EHR, they responded that they’d weigh the cost of the investment, both financial and opportunity, with the ROI they hope to gain.

Even though EHRs have their own patient 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 in 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. But this is easier said than done. The pressure to meet government regulations, payor rules and patient expectations make it a significant challenge. But, with the right approach, it’s possible.

The Evolution of Health Care Price Transparency Solutions

Historically, the health system has been a business-to-business (B2B) payment model.

A health care provider’s revenue largely depended on how well it managed the flow of claims from its billing system to a payor’s (government or private) claim processing center.

Until recently, payor 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 health care 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 payors.

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

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

However, that’s not the case anymore. Health care 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 payors rather than patients. Payors 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 payor-centric approach led to less-than-ideal patient experiences, especially with the billing process. The systems and processes put in place to meet payors’ 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 payments experience.

The health care financial landscape continues to change with patients at the center. For the past 20 years, health care 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 health care continues to grow. Patients expect real-time access to their medical records, testing results, billing, etc.  

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

Why Should Health Care Providers Achieve Price Transparency?

89% of Americans are concerned about increases in the individual cost of healthcare

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

  • Rising health care costs: More and more U.S. health care consumers worry about how to pay for their medical expenses. A 2018 Kaiser Health Tracking Poll found that 89% of Americans are concerned about increases in the individual cost of health care.  
  • Public distrust: The Kaiser Health Tracking Poll also found that 71% of respondents believe hospitals charge too much for their services. Not only are Americans concerned about rising health care costs, but they blame health care providers’ charging practices. They also pin responsibility for the predicament on fraud and the profits of drug and insurance companies.
  • Government pressure: With costs being the top health care 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 payors to patients continues to grow. Patient out-of-pocket expenses are expected to grow 10% year-over-year and reach $800 billion by 2026.  Over half of the U.S. workforce is enrolled in a high-deductible health plan (HDHP). Patients have more “skin in the game” regarding their health care 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 health care. 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 health care experiences.

Best Practices for Price Transparency in Health Care

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 Proactive, Adaptable and Digital Patient Communication

When it comes to communication, the earlier, the better. You must invest in a robust communication system to fully engage your patients. 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.

When you get patient demographic and insurance information early, you can verify its accuracy and follow up with the patient before their visit to get any additional details. This leads to more accurate and complete data for the provider and patient.

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. And 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 an end-to-end 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. 

Simplify Financial Transparency Millennia

How Millennia Can Help Health Care Facilities With Financial Transparency

The demand for financial transparency in health care 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 pricing estimates, 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 Complete provides the end-to-end 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 early check-in, estimation, easy-access statements, secure payment options and much more.

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

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