For decades, the prices negotiated between commercial payers and providers have been closely guarded.
But as the health care market evolves and consumers more commonly make health decisions based on price, a host of factors—including state regulations, technology, and providers and payers sharing their own prices—have increased the supply of price information.
Competing on price is becoming a requirement for consumer business. Our 2014 Primary Care Consumer Choice Survey revealed that if a patient doesn't know the price of a primary care visit, 92% of them would rather go to a different clinic for lab tests, X-rays, or pharmacy.
Clearly, price uncertainty is almost certain to drive consumers away. To compete in the health care retail revolution, providers will have to offer pricing information to patients.
Every provider's price transparency strategy will depend on internal capabilities, brand strategy, and their price point relative to the market.
However, every organization should be able to provide price estimates at a patient's request since aversion to uncertainty is so strong.
There are three approaches to offering price transparency to consumers: passive price estimates, proactive price quotes, and broad brand-based price marketing.
Passive price estimates
Many high- or variably priced providers must balance consumer desire for pricing information with their lack of price advantage.
In this case, marketing on price may not be the best strategy, but offering on-demand price estimates can counter patient anxiety around price uncertainty that will drive them to a competitor, while limiting price list exposure.
Proactive price quotes
For providers with low or market competitive prices, proactively offering price quotes to patients can lock in loyalty.
Determining what price to quote can be a significant undertaking. Some providers show a cash price list for their top commodity health care services, while others, such as Baptist Health South Florida, staff an entire central pricing office to tailor price estimates to both insured and uninsured patients.
If a cash price list is too simplistic, and you're not ready to build a pricing office from scratch, there are technology solutions that can automate patient obligation estimates and aid staff in collecting at point of service.
South Georgia Medical Center increased collections by over $200,000 in a single quarter after implementing Payment Navigation Compass.
Broad price marketing
Creating a brand around affordability is an aggressive and potentially risky strategy. Although patients make decision based on price, many confuse low prices with low quality. Although price transparency may be pushing providers to share their price lists, quality, convenience, and other variables should be considered when crafting a brand campaign.
Email Adam Rosenberg to learn how Payment Navigation Compass will help you thrive in the era of price transparency.