When it comes to helping customers make buying decisions, hospital systems have lagged behind even car mechanics.
My mechanic will give me an estimate of what a repair will cost BEFORE actually doing the work. If he runs into problems that require more parts or labor, he explains those to me afterward, and then we settle up.
That simple exchange was—I’ve been told umpteen times—just not feasible in health care. Hospital employees didn’t know consumers’ health insurance information, which determines the price and how much of that price the consumer pays.
Plus, I was told, upfront prices can change—if patients need different things during their procedures. So hospitals didn’t want to quote upfront prices and then have patients get upset later.
Both responses were ridiculous—as is now becoming clear.
Hospitals obtain price information from insurance companies all the time—it’s how they get paid—and they could set themselves up to do that for consumers upfront—if they wanted to. As for the scope of work changing, again, my car mechanic is in the same situation, but he figured out a long time ago how to manage expectations up front and explain unpleasant changes to the price later.
Finally, this consumer’s nightmare is changing. Hospitals in recent years have been willing to estimate prices, if you are willing to chase it down.
Some even have bundled prices for complex procedures, such as joint replacement surgery, which they can provide upfront.
But now Community Health Network is going where few other hospitals have ever gone: It’s actually inviting customers to call for an upfront price estimate.
Community launched a central pricing office in late January and put a new web tool on its home page called My Estimator. Both moves are designed to make it easier for consumers to get an upfront price estimate.
And these estimates are “meaningful”—they aren’t just based on hospitals’ “crazy” chargemasters; they are actually price estimates based on the customer’s health insurance plan design, including its deductible, co-insurance and the like.
“Health care is becoming more consumer-oriented than ever before, and health care has a lot of catching up to do relative to some of our retail counterparts,” said Tom Malasto, Community’s chief patient experience officer.
Community has given out price estimates to consumers who call for years. But those consumers tended to be uninsured patients. So it was relevant to quote for them chargemaster rates, the percentage discount Community would give to the uninsured, and any special financing plans that were available.
But in recent years, more of the upfront price requests were coming from insured patients, who now had large deductibles. As I reported in January, nearly 50 percent of employer-sponsored health plans in Indiana now have deductibles of $2,500 or more, according to a survey by Indianapolis-based United Benefit Advisors. And even the average deductible on traditional PPO plans with co-pays is now about $1,500 in Indiana.
To give insured customers a meaningful price estimate, Community needed to consult a software service it uses that includes the prices it has negotiated with insurers for and the different plan features offered by each insurer. Or, if that tool didn’t have the information needed, Community would need to call the insurer directly.
Across its eight hospitals and scores of outpatient locations, Community had more than 100 employees responding to consumer price quote requests. So it decided it needed to centralize that work.
It now has three financial experts responding to customer inquiries and trying to provide them price estimates within 48 hours. And it’s doing internal marketing to make sure all other Community employees know to direct patients to that central pricing office for estimates.
“We’re getting more and more price estimates from those that have health insurance. Now it’s not just average charge information, it’s what am I going to plan based on my plan design,” said Kipp Fincher, Community’s vice president of reimbursement. “We believe that that’s our responsibility. And we want to provide that information.”
Community’s price estimates still have limitations. They are not guaranteed, since the services patients need may change once clinicians learn more about their condition.
Also, the price estimates typically include only the charges for using Community’s facilities or equipment, not the fees paid to the physician who performs a surgery, or the anesthesiologist who administers pain medicine, or the radiologist who reads an MRI.
But Community is working to include their prices too in the near future.
The centralized pricing is part of a larger strategy Community is pursuing to solicit feedback from its customers and redesign their experience of interacting with Community.
Elizabeth Walker, a hospital consultant at ECG Management Consultants, said providing price estimates is something all hospitals do. But Community’s decision to promote price quotes as a service might give it a “halo effect” that helps attract patients of all kinds, even those who don’t call for upfront quotes.
“Everybody says they do this. But to have it packaged like this, that’s the new idea. And that’s very patient friendly,” Walker said. “They can’t lose on this.”