In 2006, Danville, Pa.-based Geisinger Health System decided to take its electronic portal for patients to the next level. The portal already offered access to patients' clinical records. However, it didn't provide price estimates. In an effort to make billing more patient friendly, Geisinger decided to change that, says Kevin Brennan, the health system's CFO and executive vice president of finance.
That's how Geisinger's MyEstimate got its start. The tool lets patients use an online estimator to find out how much they'll owe for various services. They can also fill out a form online to receive a price estimate from Geisinger. Both methods take into account the type of health insurance patients have, their individual benefit design and factors such as their year-to-date deductible information. "What the patient would get was the best estimate available for the service that was being ordered for them by a physician," Mr. Brennan says.
Like Geisinger, a number of other healthcare providers and payers have responded to the growing push for price transparency by developing tools to let patients obtain cost estimates before they receive treatment. Earlier this year, a task force (including Mr. Brennan) led by the Healthcare Financial Management Association released a report on improving healthcare price transparency that offered examples of price transparency tools, such as Geisinger's MyEstimate. Others on the list include tools developed by Maricopa Integrated Health System of Phoenix and the Wisconsin Hospital Association, as well as health insurers Aetna and UnitedHealthcare.
As out-of-pocket costs rise and patients continue to take on a greater portion of their care costs through high-deductible health plans, the demand for transparency tools (which can consist of interactive websites, brochures and apps, among other formats) will continue to rise, says Richard Gundling, vice president of HFMA. "Everybody who's an employee, every year your co-pay and deductible are just a little higher," he says. "When we talk to patients about being able to have that conversation earlier rather than later about price, it gives the opportunity to maybe have another conversation with their doctor about treatment alternatives. It just empowers the patient to have that."
Although not all industry experts think hospitals should create their own tools, they seem to agree healthcare providers can play a key role in advancing transparency in general and the development of portals that let consumers obtain and compare costs.
Tool development tips
Mr. Brennan says Geisinger's MyEstimate aims overall to be patient friendly and make it easier for people to be aware of their financial obligations. He advises other hospitals and health systems looking to provide price information to focus on the out-of-pocket amount patients owe, rather than the "retail price" of care. "We weren't trying to define what the insurer reimbursed us," he says. "We were just trying to solve for the problem we think was most relevant: How much is it going to cost [the patient]?"
He also says using the system's EMR as the foundation for MyEstimate helped get the price portal off the ground. "The basic engine was in place — an electronic repository across every single Geisinger site that captured and stored clinical information," he says. "Behind the scenes we also stored financial information in a warehouse. We really challenged ourselves as to whether or not we could leverage that investment with some additional information technology connectivity."
Additionally, Mr. Brennan says price transparency tools should provide quality information to put cost estimates in context. MyEstimate includes links to various sources, such as CMS, for quality information. "It's shame on us if all we do is provide financial information without providing other relevant quality information," he says. "We strongly believe at Geisinger that the real value is a combination of their out-of-pocket consequence and the quality of care that is going to be rendered. Some people like to drive Mercedes and some people like to drive a lower-end economy car. You make your own unique, customized value decision."
Andrea Caballero, program director at the nonprofit Catalyst for Payment Reform, agrees that cost and quality information must be presented together. "Many of the tools we've seen, you've got price over here, and you've got quality over here," she says. "It's hard to see what that would be together. CPR is very clear that price info alone isn't going to change consumer behavior. It's going to be price information, quality information and benefit design that will drive behavior change."
Citing a report CPR released last year on effective healthcare price transparency tools, she says price portals must also be easy to find, use and navigate, as well as customizable for each patient.
Should hospitals leave it up to the health insurers?
Ms. Caballero says CPR feels hospitals aren't necessarily in the best position to provide each patient's direct cost-sharing information. "Obviously a system where every provider has to build their own tool isn't very efficient," she says. "That's not an angle we really explored or would think is the most consumer friendly."
Will Hinde, healthcare practice director at the business and technology consulting firm West Monroe Partners, agrees health insurers are better positioned to create transparency tools. He says hospitals can't provide a price for a procedure that applies to a broad audience, since the cost may vary widely depending on the patient's health plan and other factors. "The insurers have all the relevant data to determine member liability," he says. "They have the provider fee schedule, eligibility, plan and claim data to be able calculate a more precise cost per procedure given a location, facility type, and the provider performing the service."
Still, both Ms. Caballero and Mr. Hinde say hospitals and other providers can bolster transparency efforts and can help health insurers in developing tools that offer cost estimates. Hospitals can advocate for and support the creation of statewide, all-payer claims databases, Ms. Caballero says. She also advises says that providers should no longer insist or require payers sign contracts with gag clauses, which prohibit payers from using price and quality information to build transparency tools. Mr. Hinde says hospitals can also help by making sure their charges and line items are clean, consistent and easily understood.
Mr. Gundling of HFMA — which also believes health insurers are the best source for cost estimates — says hospitals and other providers can aid patients in finding available transparency tools. Additionally, the hospital can step up when the patient doesn't have a health plan to turn to. What the provider needs to do provide that price estimate is when the patient's uninsured or out of network. "That's where the provider should be able to offer an estimated price for a standard procedure without complications, and what complications would mean," he says.
Mr. Brennan of Geisinger says his system understands that "in some cases, the insurer might be a better source for certain information." However, he also says he thinks physicians, hospitals and other providers play a key role in transparency efforts. "I believe the HFMA report correctly identifies that both insurers and providers have responsibilities in that regard and can contribute to meaningful price transparency information," he says.
Overall, Mr. Brennan urges other hospitals and health systems not to brush off the push for transparency and to examine their capabilities to determine what it would take to provide actionable financial information to consumers. "We have more people seeking price information and making decisions about where to seek care," he says. "The number one thing is, don't ignore this."
More Articles on Price Transparency:
Sometimes You are Ahead of the Curve: 4 Lessons From a Failed Price Transparency Venture
Study: Policymakers Could Cut $100B From Health Spending Through Transparency Interventions
Health Care Cost Institute, Health Insurers to Collaborate on Price Transparency Portal