Are cost questions making you self-conscious?

Alicia Daugherty, Marketing and Planning Leadership Council

Swimsuit season is behind us (thankfully), but providers are still feeling pressure to reveal more—about charges and costs, that is.

The latest round of media scrutiny that began with Time’s "Bitter Pill" article has built across the summer and into the fall—the most recent national example being Sunday’s New York Times article comparing hospital amenities to those of luxury hotels. 

The coverage has mostly fueled, not reduced, patients’ confusion about how providers are paid and where the money goes. Their frustration is understandable—earlier this summer, my colleague Michael Koppenheffer outlined six different meanings of “costs” in health care. 


Health care terminology: More than just words

While the issue of health care affordability isn’t merely one of semantics, provider organizations do need to educate media and patients alike by clarifying terms, explaining how revenues are used, and providing upfront access to expected charges prior to rendering services. 

The CEO of Baptist Health South Florida recently published a letter to the community on the nuances of hospital finances that get lost in the news coverage. His letter: 

  1. Translates the terminology of hospital charges—using relatable language and analogies, such as “what will it mean to my wallet?” and “sticker price”

  2. Details Baptist Health South Florida’s longstanding efforts to increase transparency and support patients in accessing affordable care, including establishing a Central Pricing Office in 2001

  3. Transitions the conversation from price to value by broadening the discussion to include quality considerations


To help you explain charges and costs, we’ve created a printable infographic that follows the money, so to speak. Customize it for your organization in three quick steps:

  1. Download the infographic and open with Adobe Acrobat Reader. Click on “Enter Hospital Name” to see all fillable fields.

  2. Choose a specific MS-DRG to feature, or use an average charge for a service line or for the entire organization.

  3. Enter your organization’s average charges and reimbursement. Allocate the reimbursement across three buckets—input costs, losses from under-reimbursed services, and charity care / community programming—based on your average costs and attribution methodology.

Download the infographicDownload the infographic

More from the Marketing and Planning Leadership Council

Want to learn more? See my thoughts on what price transparency means for hospitals by watching our on-demand webconference, "How to Attract Regional Partners and Selective Consumers", to learn more about engaging consumers in value conversations.

Then, check out these related resources: