Healthcare Price Transparency Driving Choice – Just The Wrong Direction

Last month, the Healthcare Financial Management Association held their annual conference – #HFMA16ANI. The topics covered in the sessions and discussed in the aisles of the exhibit hall were wide-ranging. Financial patient experience, scoring based on propensity to pay, patient loans, financing options and price transparency were on the lips of many attendees.

The discussions on price transparency were particularly interesting. Attendees were not talking about transparency as the silver-bullet for reducing costs in healthcare like they were last year. Instead, attendees were talking about it as being just the first step in a long journey to a truly open market in healthcare.

Just a few years ago, price transparency was touted as the necessary catalyst for true consumer/patient choice in healthcare. It was believed that with detailed price information patients would be able to “shop around” for their care using price as a determining factor. Having this choice would mean healthcare organizations would have to become more price competitive – thus driving overall costs lower.

Check out this excellent post from Dan Munro @danmunro back in 2013 that captures the hope of price transparency at that time.

I believe that all the work around price transparency in the past few years has indeed pushed patients to make choices in their healthcare – just not the choices that we want.

This tweet from Annette McKinnon @anetto, a patient advocate from Toronto, during a recent #hcldr tweetchat perfectly illustrates the choices patients are making when they know the price of care:

Armed with price information, patients are not choosing to shop around for more affordable options, instead they are making the choice between forgoing care vs getting treatment. A Gallop poll found that in the US, 33% of families have put off medical treatment because of cost. That same poll shows that 22% of Americans have put off medical treatment for a “very” or “somewhat serious” condition.

So why aren’t patients taking the pricing information they receive and shopping around for cheaper alternatives? The biggest reason in my opinion is that patients do not have value transparency.

To me, value transparency is a state where patients purchasing healthcare services have a clear understanding of the expected outcomes, health benefits, disadvantages, risks and costs associated with it. In addition, patients would know how those services will be delivered (the workflow) and who is doing it. When a patient has access to this type of information and has the knowledge to interpret it, that’s when they have value transparency.

So what do we need to get to this state of value transparency in healthcare? Members of the #hcldr community had some interesting suggestions:

I believe that one day we will have value transparency in healthcare. Price transparency is an important first step. However, price in and of itself is not sufficient information to spur most patients to choose between different providers of care. In its current form, price transparency may be doing more harm than good for patients with chronic conditions that get worse without treatment – they may choose to forgo care due to cost only to end up in a more critical situation later because of the delay in treatment.

My hope is that someone will take today’s healthcare pricing tools and merge them with standardized quality metrics, crowdsourced patient experience data and provider histories to create a value transparency tool. In the meantime, the current crop of price transparency tools can at least help to reduce the fear of the unknown medical bill.

About the author

Colin Hung

Colin Hung

Colin Hung is the co-founder of the #hcldr (healthcare leadership) tweetchat one of the most popular and active healthcare social media communities on Twitter. Colin speaks, tweets and blogs regularly about healthcare, technology, marketing and leadership. He is currently an independent marketing consultant working with leading healthIT companies. Colin is a member of #TheWalkingGallery. His Twitter handle is: @Colin_Hung.

   

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