Loyale Healthcare, a Leader in Healthcare Financial Technology, Introduces the Patient Financial Bill of Rights – A Boon for Patients and the Providers that Care for Them
Most baby boomers with coverage can remember when the costs for their personal healthcare were easily managed. Health insurance premiums were low. So were co-pays. No one cared much about how much the care actually cost, because they weren't personally responsible for payment. That was the insurance company's problem. Insurance companies were making a reasonable profit balancing care versus costs. So what happened?
Fast forward a couple of decades and that model has been completely turned on its head. As costs for the delivery of care soared (the percentage of GDP devoted to healthcare increased from less than 7% in 1970 to 18% today, on its way to 20%), employers found they were no longer able to bear their historically large share of employee premiums. The reasons for these cost increases are many, but advancements in medical technology and prescribed testing such as MRIs, CT Scans, etc., which are more sophisticated and more expensive, have become more commonplace.
Employers responded to this financial challenge by shifting more and more of the cost of premiums to their employees. Recognizing the unsustainability of ever-increasing premiums for both employers and employees, insurance companies (payors) began introducing coverage with lower premiums. The flip side to lower premiums, however, were higher deductibles. And so high deductible health plans were born. Now, patients were paying higher premiums and more out-of-pocket whenever they sought care.
The thinking at the time was that by including patients in their own healthcare transactions, they would become more conscientious, discerning consumers. Faced with a much larger financial burden for insurance coverage and care, consumers would make more cost-efficient investments in wellness. They would shop for and select the provider or facility that promised the best value. Eventually, it was expected, the consumers of healthcare would exercise their prerogative to buy from the provider who offered the best value. And by doing so, apply age-old supply and demand economics to dampen the exploding cost of care.
Even today, 10-years after high deductible plans were introduced, patients still don't get all the information they need. Consumers of healthcare don't have any idea how much their care will cost. Half the equation needed in order to calculate their own cost/benefit ratio is essentially unavailable to them. Consequently, healthcare has continued to operate on a kind of market oasis, free from the economic and competitive pressures that are a reality in every other sector of the economy.
The fact is, healthcare services do not have posted "menu" prices today. That's partly because there are so many levels of pricing for the same services depending on whether you are insured, uninsured, Medicare, Medicaid or other. The costs also vary depending on where the services are delivered – Emergency Room, clinic, etc.. Because price differences vary so dramatically, the industry has been unable to devise a way for a patient to know beforehand how much their care will cost and whether there are alternatives at a lower price. This is the status quo that must - and is about to be - disrupted.
Today, the call for price transparency is getting louder and it's coming from many different constituencies. It's coming from the CMS, whose new price transparency rule is only a step in their longer-term rulemaking plan. It's coming from employers like Apple and Amazon, who are opening their own on-site clinics and entering healthcare because of the industry's susceptibility to disruption and promising profit potential (Healthcare is, after all, nearly one fifth of the entire American economy). It's coming from state government, where legislators in more than 30 states have proposed or are pursuing legislation to promote price transparency.
It's also coming from the federal government where legislation has been introduced requiring price posting on 100 hospital services. In
Surprisingly, patients themselves seem to have been the least vocal of these constituencies. A recent research report from
However, the report continues, "there is likely to be greater interest in price information from consumers as their cost-sharing responsibilities increase." Citing a separate research study by
Industry experts agree. In its Price Transparency in Healthcare report published in 2014, the
Based on our experience working with healthcare providers around the country, we are convinced that when patients have costs presented to them side by side with information to help them evaluate quality, they will indeed choose the providers who empower them to make good choices. As the chorus call for meaningful price transparency becomes a roar, and providers embrace their new role as competitors in a consumer-driven market, patients will have the information they need to reward the providers promising the best value.
Power to the Patients
Patients may have been slow to exercise their market power, but they're catching on fast. And the market is rushing to meet them. Apple has already been mentioned. And, of course, there's the Amazon-Berkshire Hathaway-JP Morgan healthcare joint venture. Not to mention CVS/
It's also critical to acknowledge the generational transition taking place at this very moment, from boomers to millennials. One of the most frequently cited reasons for patients' lagging interest in price transparency relates to the baby-boomer generation's perceptions and behaviors. It was this generation, remember, that grew up in the days of low-cost care. And it's this group that's most likely to equate cost with quality, an unreliable correlation in healthcare.
Millennials, on the other hand, are accustomed to being able to shop and compare. They know from experience that a little time doing research upfront can lead to better decisions. They're also digitally savvy, and would actually prefer to handle things themselves on their computer or smart phone, as long as the technology is good and the user experience pleasant. If price transparency hasn't been a high priority for patients up to now, it is about to be.
The Upside for Providers
The challenges of implementing true price transparency are formidable. But the hospitals and health systems that lead the charge will find the return on their investment compelling. As patients take a larger, more assertive role, these providers will find themselves winning more business from patients who - because of the information and planning tools made available to them - are better prepared to pay and more likely to return and refer additional business. Today, transparency presents an opportunity to stand out in an increasingly competitive marketplace. It won't be long before it becomes a competitive imperative.
Patients Financial Bill of Rights
Based on the belief that all consumers of healthcare have a market-given right to understand what they're buying, how much it will cost and how they'll pay for it,
1. The Right to Pre-Treatment Price Transparency – Meaningful, reliable price estimation and quality information is presented before treatment, when care and purchase decisions are made.
2. The Right to Inclusive Price Estimates – Price information includes a treatment's predictable components from all billing parties including hospital, imaging, pharmacy, physicians, anesthesiologists, etc.
3. The Right to Know Total and Out-of-Pocket costs – Complete information about how much the patient's insurance company will pay and how much the patient or guarantor will be expected to pay, including any unmet deductibles and/or co-pays
4. The Right to Payment Options – Nearly half of all households in American are not prepared for an unexpected bill of
5. The Right to Information that's Easy to understand and Act On, 24/7 – Patients have made online interactions a part of everyday life. They're entitled to on-demand access to consolidated statements, payment plan documents, information about their balances and to interact when they have questions or need to make changes
6. The Right to Financial Experiences that are as Personal and Compassionate as Patients' Clinical Experiences – healthcare providers are renowned for the quality of their clinical care. Patients need and expect a similar approach to the financial dimension of care.
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About Loyale
Loyale Patient Financial Manager™ is a comprehensive patient financial engagement technology platform leveraging a suite of configurable solution components including predictive analytics, intelligent workflows, multiple patient financing vehicles, communications, payments, portals and other key capabilities.
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