Why Healthcare Needs Price Transparency and Better Technology

When affordability determines care

Medical professionals want to provide good outcomes to patients, so it can be particularly frustrating when costs get in the way of the proper course of treatment. “The insurance marketplace is more confusing than ever for doctors and patients,” says Trevor Turner, MD, FAAP, a board-certified physical medicine and rehabilitation physician. “Between co-pays, deductibles, and denials, most people don’t have an accurate understanding of what healthcare is going to cost. But knowing what things cost becomes essential when making healthcare decisions because it often changes what doctors are able to offer patients to get better.”

Another physician, recently retired rheumatologist Steve Overman, MD, indicated that in his experience patients will avoid care because of unknown cost, and this can negatively impact the outcome. "With almost every patient the issue of cost would come up, and it was nearly impossible for me to be able to say. I tried to become aware of all the lab tests we ordered and what the costs where.”

Treatment plans are always built around providing the best patient outcomes but are sometimes being executed based on affordability. Turner recounts patients who have had to ask for surgeries to be done in certain locations in order to bring down costs. While this can sometimes be accommodated, many times it is unsafe or impossible and patients go without the treatment they need to achieve their desired outcomes.

Turner notes that in orthopedics, there are usually several options for treatment. Having accurate pricing available prior to procedures would make it significantly easier for physicians to build treatment plans that patients can afford and follow-through with.

Overman expanded on this notion, using the example of back pain. “Back pain usually leads to an MRI recommendation by Primary Care physicians, and it’s typically unnecessary.” Being sensitive to both cost and consideration of whether that test would truly improve the patient’s outcome, Overman indicated that they were able to avoid nearly 80% of the MRIs originally requested.

Transparency is beneficial for physicians as well as patients

One major problem is that physicians are often called upon to be the authority about financial matters for patients — even though they themselves aren’t always fully aware of the costs of certain care. Turner notes that as more physicians become employed by health systems, they have lost the control and ability to determine the cost of procedures for patients.

Another problem that affects both patients and providers is that all insurance companies have different proprietary guidelines.

“There are certain guidelines around which we should practice that we should be held accountable, but when it comes to something like pre-authorizations for example, it doesn’t make sense that we have 6 major insurance companies that can adjudicate things in 6 different ways,” says Overman. “None of this is transparent and that makes it costly and inefficient to run a practice and build treatment plans that will be realistic for patients.”

Further, Overman found it difficult to comply with the mission to control costs without transparency. “If I have no idea that the AMA panel that I just ordered costs three hundred dollars, and I could have ordered one subgroup that I was interested in for twenty dollars how am I even going to be able to think about that if that information is not brought forward?"

Healthcare providers need real-time and easy to access cost and outcome information when they are in the room with patients, so they have an easier time answering questions and building treatment plans that fit patient needs. Overman believes that having the right technology would allow him to have more meaningful conversations with patients, whereas right now, he says “the entire visit is centered around data gathering in the exam room”.

Same procedure, different location

“We do procedures in the hospitals, we do procedures in the office, and we do procedures in the ambulatory surgery center,” says Turner. “Each location has a different cost associated with it, even though it’s the identical procedure.” To Turner, this is a shocking fact. We struggled and failed to think of another industry that offers an identical product that costs $1,000 in Location X, but $3,000 in Location Y.

Patients are savvy enough to see these cost inconsistencies and the impact of rising deductibles and now demand transparency. If the provider can’t deliver on this need, it will not have what Overman described as an “atmosphere of quality” that starts with the patient’s experience with staff and the financial aspects of their treatment. Price-conscious patients are the new norm and healthcare organizations need the tools to keep up.

The right technology is needed

“The best companies are the companies that provide transparency,” says Turner. “They let people know they’re getting what they’re paying for. And they’re confident enough in their care to be transparent.”

To cultivate this confidence, providers must invest in technology that seamlessly integrates medical and financial data to deliver pricing information to patients, physicians, and staff in real-time. As Overman said, "we've lost sight of what it takes to deliver high-quality care, and that's an awareness of cost and providing value for that cost.”