Is your hospital ready to tell the world what you charge for your services? It better be.
The days of opacity in health care pricing are vanishing quickly, Jamie Orlikoff declares in this month's Hospitals & Health Networks cover story. "The market is now saying, 'we don't care what your costs are … We want to know what we can pay for a service where we are going to get good quality at a reasonable price.' " What's more, payers, employers and patients insist, " If you can't tell us what the price is, we will tell you."
Lola Butcher interviewed Orlikoff, a national adviser on governance and leadership to the American Hospital Association, as part of her cover story, "Price Transparency (Its Time Has Come)." She also spoke with hospital and health system leaders across the United States to see how they are adapting to what Orlikoff describes as the shift from cost-based pricing to price-based costing.
Some, like Fairview Health Services in Minneapolis, provide a consumer pricing phone line and an online form to request a price quote based on a patient's insurance plan. North Shore–LIJ has an online cost-estimator tool that uses insurance and provider data to estimate out-of-pocket costs. And a growing number, like Pomerene Hospital in Ohio, offer all-inclusive prices for hundreds of services and procedures.
No hospital is immune, even those in isolated areas or that are the sole or dominant provider in a market. That's because geography no longer defines health care competition; more and more payers incentivize patients to seek care at hospitals in other regions that score high quality marks for certain procedures and agree to charge a set price.
Hospitals that don't move forward on price transparency "will have all the indigent patients they want and all the Medicaid patients they want," Orlikoff says. "But the patients who are leaving — those who have private insurance — are precisely the patients they need to keep."
He scoffs at hospital leaders who point out that their largest payer is still in the fee-for-service mode. "Pay attention to the weak signals that represent the future, not the signals that confirm your bias for the past."