A new survey suggests "cost consciousness" is on the rise, with a clear majority (55 percent) of patients reporting that they have been paying more attention to the details of their medical bills over the past year.
There is no longer doubt that the trend toward cost transparency in healthcare is here to stay, and many believe that it will continue to grow unabatedly in 2014. Understandably, this has created an intense debate over whether more transparency will ultimately be good or bad for the system. The reality is that these changes are moving ahead at full steam, and providers are clamoring to gain a better understanding of "the consumer formerly known as my patient." They know that this kind of healthcare consumer wants to know about cost before choosing to receive treatment and sees value in being able to compare the costs of different treatments and providers. But beyond that, the details are slim.
To better understand what this will mean for providers, Transunion Healthcare recently conducted a survey of more than 1,000 insured Americans who received medical care over the past two years.
The results suggest that "cost consciousness" is indeed on the rise, with a clear majority (55 percent) of patients reporting that they have been paying more attention to the details of their medical bills over the past year. In a sign that this is about more than simply griping over high costs, this was true for those who had reported both good and bad experiences with billing.
More importantly, the study indicated that increased cost consciousness is not occurring in a vacuum — it is having an impact on the assessments consumers make about the quality of care they receive, their choice of providers, and even their selection of insurance plans.
The results made clear that patients are assessing their entire "customer experience" when making assessments about their quality of care. Patients reporting a clear and transparent billing experience — and especially those that received front-end information about expected costs — were far more likely to give high ratings for overall quality of care. Overall, three-quarters of patients who gave the highest ratings for their billing experiences also gave those ratings to their overall quality of care, while 70 percent of those who gave the poorest marks for billing also gave them for overall quality of care.
The survey also indicated that cost transparency is playing a central role in patients' choice of providers and the treatment they elect to receive. In both cases, patients reported that cost-related experiences — such as front-end price disclosure and clear bills — were just as important as traditional factors like doctor consultations and clinical reputation. For example, when asked to rank the importance of various factors they consider when choosing a provider, respondents gave "makes it easy to see the cost of services…" the second highest average ranking after "world class specialists and technology."
The new healthcare consumer is shaping up to be a lot like the consumer we know in other industries. Cost is certainly a major factor in their decision-making process, but it is just part of their determination of value. The entire customer experience is what counts.
Milton Silva-Craig is president of TransUnion Healthcare. He can be reached at msilvac@transunion.com.