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    Surprising benefits of price transparency and how to utilize them

    You need to start thinking like a plastic surgeon.

    The days of being a doctor or outpatient facility and passively waiting for referrals is waning. As patient networks narrow and deductibles grow, the mindset of the consumer is changing. They're beginning to understand that sometimes costs are lower even if they disregard their network and find an equally qualified provider.

     

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    Because the consumer is paying out of pocket, sometimes $5,000 or more before the deductible is met, they recognize they have a choice in how to spend their healthcare dollars. And if patients are choosing and not being told where to go, you as a doctor or other outpatient provider must think like a plastic surgeon—a physician that has long been part of the free market healthcare system.

    Plastic surgeons that offer cosmetic services are paid out of pocket because insurance does not cover such non-medically necessary services. Focusing on customer growth and retention without the support of a built-in referral system from insurance networks and the like is the cosmetic plastic surgeon's forte.

    As more patients recognize they will be paying for a portion of their healthcare out of pocket, regardless of whether it's medically necessary before a deductible is met or because it's cosmetic, so too will doctors need to market to that new type of patient. And what do patients that are paying out of pocket want? They want to know the cost up front. Enter price transparency.

    Don't fear the concept of price transparency

    This recent article in Medical Economics discussed some of the perils of providing price lists to patients. A list of healthcare services, along with the prices listed as a static menu, may not be the best approach as alluded to in the article. But that doesn't mean price transparency as a concept is wrong. It's certainly reasonable for consumers to know what they're paying up front or certainly a very close approximation that includes actionable information.

     

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    By actionable information, I mean that the price quotes provided should not be U.S. averages or an amalgam of claims data. When you go to purchase a car, a quote from the dealer, while not necessarily exact, should be a reflection of what you will pay.

    In contrast, claims data or the insurance companies' negotiated rate isn't always what the patient pays. Not even close. Negotiated rates vary across policies, companies and insurance plans. They can vary widely and do not provide the patient with useful, actionable information of what they may pay out of pocket.

    Therefore, the doctor or facility must have a fee schedule that reflects a "prompt pay" discount or the fee charged when a patient is not using their insurance or before their deductible is met. Once prices reflect what a patient will actually pay without surprise bills or hidden charges, then the provider is now giving the consumer a reason to use their facility. In this context, price transparency is a marketing tool. Something plastic surgeons, and many other providers already do. But simply listing your prices is not the answer.

    How to use price transparency as a marketing and lead generation tool

    In my plastic surgery practice, I don't use a static list of procedures and prices on my website. If I did, consumers would look at the prices and move on. I wouldn't know who visited my site. In other words, I would be "giving the milk away for free." Instead, I use a price estimator that allows the consumer to add procedures-of-interest to a "wishlist."

    Next: Remarketing to patients

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