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    How to provide patients the up-front price of treatment

     

    “I think it can give you a competitive edge to be more transparent about your pricing. It’s a smart practice today, because more and more healthcare costs are falling on patients, especially if they have this $5,000 or even $10,000 deductible to spend every year. They don’t want somebody taking advantage of that with excessive pricing.”

    Physicians in smaller practices are in a unique, advantageous position when it comes to price transparency, says Neel Shah, MD, MPP, founder of Costs of Care, a nonprofit organization working to lower healthcare costs, and assistant professor of obstetrics, gynecology and reproductive biology at Harvard Medical School. 

    “Small- to medium-sized practices often have more insight than large tertiary medical centers when it comes to the cost of services,” Shah says. “They’re running their own businesses, and they’ve got a good sense of what goes into providing services and what gets charged.”

    When creating a price list, practices should take into account how much the most-used insurance carriers are reimbursing for the listed procedures along with what other practices in the market are charging, advises Scherger. They should examine relative value units for each procedure and consult the pricing and financial resources available from the American Medical Association and Medical Group Management Association.

    “It’s complex, running a medical office, much more complex than any other retail store, but those things are available easily for you,” he says.

     

    ‘Mind-boggling’ savings

    Bullock’s six-physician practice has a price list for services and shares it with patients who inquire. It gives a 25% discount to those who self-pay and offers a sliding scale to patients with limited incomes. 

    The practice has also implemented price transparency with its referrals. Shortly after the shock of the bill for his son’s X-ray, Bullock says, a patient mentioned Healthcare Bluebook, a company that provides price information to large, self-insuring employers and third-party administrators. Bullock researched it and reached out to the company.

    The result has been a pilot project started in early 2017 that gives Bullock and his staff access to Bluebook’s mobile app, allowing them to look up the prices of referral procedures. If one of his patients needs an echocardiogram, for example, he can compare prices throughout the area and refer them to a low-cost provider.

    Bullock used to base his referrals on the quality of the providers and their location and convenience for patients; now price has become a major part of the equation, he says. “The first day, I used it three times,” he remembers. “It did change my referral patterns, and it probably made a difference of almost $2,000 between the three patients.”

    Bullock did something else with the new app: He searched nearby imaging centers and discovered that he could have paid as little as $67 for his son’s X-ray. “I did pay too much,” he admits. 

    Every physician in Bullock’s practice uses the app multiple times a day, he says. They know the locations that offer the most common procedures at the most affordable prices. The overall savings to patients is tough to estimate, he adds, but he’s sure that total would be “mind-boggling.”

    Prices for the same procedure in the same ZIP code often can vary by a factor of four or more, says Bill Kampine, MBA, an economist and co-founder of Healthcare Bluebook.

    The company has built its pricing database over 10 years, using commercial claims data, public records, government data and submitted pricing information. (Less-costly providers often are eager to share their prices.) A version of Bluebook is available for free to medical practices via an app.

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