Hospitals should consider taking price transparency cues from the retail industry if they wish to thrive in a consumer-driven healthcare environment, suggests a report from PwC. As out-of-pocket costs continue to rise for patients, healthcare organizations must use new strategies to attract and retain consumers in an increasingly competitive purchasing atmosphere.
“A short time ago, it would have been unthinkable for American health systems to publicize how much they charge for medications and medical services,” the report says. “But now, most Americans are facing higher deductibles and other cost-sharing measures.”
Patients are shopping around for the least expensive options for elective care in response to increased burdens on their wallets, PwC indicates. According to the report, 26 percent of adults had contacted different providers to find the best cost for their treatment in 2014. In 2015, that figure rose to 30 percent.
Some hospitals are responding to this shift by working to adjust their cost structure to maintain patient satisfaction.
“This shift has prompted some health systems to think more like retailers as they adjust their approaches to attracting and retaining consumers,” the report states. “These health systems are rethinking their charges and developing innovative ways to communicate them to their customers.”
For example, INTEGRIS Health System tackled this issue by adopting a patient-facing price estimator. The cost estimator allows patients to view approximate treatment prices, preventing them from being blindsided by a large bill and giving them the power to choose a lower-cost provider.
The tool has helped the health system maintain patient retention, the report says. When patients check their treatment costs and decide they want to shop around, INTEGRIS is able to help place them with a provider who better meets their healthcare and financial needs.
St. Clair Hospital, located in Pittsburgh, Pennsylvania, took a similar route, the PwC report says. After conducting patient focus groups, the hospital developed a cost estimator tool catered to specific patient needs.
Since implementation, the tool produces about 100 price estimates per week. Prior to implementation, the hospital answered an average of six price estimation inquiries weekly.
Patient cost management is also significantly easier with the estimation tool than before, the report shows.
“If a patient wanted to know what their out-of-pocket cost was, they’d call our financial associates,” St. Clair Chief Financial Officer Richard Chesnos said to PwC. “It was a long, involved process to communicate with the patient.”
Now, patients simply log into the online tool to access the cost estimation. By making access to estimations more widely available, St. Clair Hospital has further empowered its patients in making their own care decisions.
Other health systems are focusing more directly on patient satisfaction and experience, the PwC report states.
Geisinger Health System, for example, established the Proven Experience program, which allows patients to receive a partial refund if they are dissatisfied with their care. Since implementing the program one year ago, the health system has refunded approximately $120,000 to patients.
Considering the cost of healthcare and the volume of patients seen, this is not a large figure, Barbara Tapscott, Vice President of Revenue Cycle, indicated to PcW. Instead, the program has done a lot to improve patient loyalty.
“People thought, we’re just going to give money away,” Tapscott said at the Healthcare Financial Management Association 2016 annual conference.
“We haven’t, but it took that leap of faith. We’re not doing anything significantly different from what we’ve done before. But we have to put the focus on the patient’s experience. This is how we build loyalty.”
Growing patient financial responsibility is likely to continue, PwC suggests, as is the trend of patient consumerism. In order for traditional healthcare providers to remain competitive in the industry, they may consider adopting retail-style practices and treating their patients as the consumers they are increasingly becoming.