Read on for the latest reflections on pricing…
Pricing directly affects your bottom line. Yet shockingly, many hospitals only manage pricing annually.
You may ask, “How is it possible that pricing, which is obviously a public priority, can remain neglected as a priority within healthcare organizations?” “Especially in today’s market,” you might add.
Do hospitals realize that consumers in their own neighborhood are now looking at their raw charge data exposed on the web?
2014 Medicare charge data by specific inpatient and outpatient hospitals is publicly available on the CMS website.
Have you peeked at your organization’s data? It is the same raw data that consumers are searching to determine who will perform their pending hip replacements, usually without the benefit of much knowledge on how healthcare actually gets paid or your quality factors.
How effective do you think consumers’ choices will be in making life-changing surgery decisions based on this raw charge data out on the Internet? Do you want to help them to make their best choice? Who do you think they’ll blame for the raw data they see and related surgery choices they make?
One thing is certain; it won’t be CMS or any other insurance payor answering your hospital’s phone to discuss a patient’s confusion about raw data they saw on the web. Even if a patient has had a resounding surgery success in every other way, when they get their bill, their financial experience of healthcare is often the aspect that leaves the final and lasting impression of their surgery experience.
If prices are not managed in a defensible manner, or if charges are not even being properly maintained for accuracy, do you think there will be dissatisfaction with the financial aspect of your patient care? How will this impact the long term financial welfare of your hospital?
Consider this example of the confusion being caused by raw charge data now published on the web:
- Suppose two different hospitals both charge $5,000. for a certain DRG.
- A consumer may think $5,000. is their cost. Yet, in fact it is the various health plans’ unique contractual agreements with the separate hospitals that define what each hospital’s actual payment will be & whether a patient will pay more or less at each hospital.
- Plus, today, hospitals are contractually disallowed from sharing their payor contracts’ negotiated rates with the public.
Can you see how there is definite value available from looking into how your organization’s pricing and charging measure up as well as how your payor contracts impact pricing?
What does bundling payment mean to your bottom line? It definitely adds another layer of complexity into how often hospitals need to calculate reimbursement so that they can price competitively.
Staying fiscally fit with ongoing alignment of pricing for defensibility & transparency is emerging as a top priority for hospitals. Pricing strategy and charge controls are needed to compete in your markets & avoid misinterpretations of publicly available charge data that can cause big issues for healthcare organizations’ relationships & financial results.
Have you seen your organization’s pricing published on the web? What are your feelings about the experience? How often do you think your organization updates its pricing and checks its reflection with its key external audiences? We’d love to hear from you.