Pricing Transparency. Presented by: Brian Workinger, Professional Services Manager, Craneware

Transcription

1 Pricing Transparency Presented by: Brian Workinger, Professional Services Manager, Craneware

2 Agenda 1 Consumerism in Healthcare 2 HFMA Region 8 and Price Transparency 3 Best Practices 4 Methods to Price Setting 5 Five Steps to Establishing a Rational and Profitable Pricing Structure 6 Summary

3 Consumer Pressure on Healthcare Pricing What is Pricing Transparency?

4 Consumerism in Healthcare Patients Cost shifting to consumers through high deductible health plans Affordable Care Act» During % of individuals enrolling in the exchange enrolled in high deductible health plans Average Silver plan deductible is $2,500 Average Bronze plan deductible is $5,300 Employers» More employers offering HDHPs as options for employees. In 2015, 24% of employees have HDHPs» Deductibles have increased by 67% since 2010 Frustration over understanding of how claims work» 75% of consumers said they were confused by the U.S. healthcare system Health Policy Briefs High-Deductible Health Plans Becker - 10 Things To Know About High Deductible Health Plans Insurance Journal Employees Share of Health Insurance Costs Rising Risk and Opportunities of Healthcare Consumerism for Payers

5 Shift to High Deductible Insurance From HFM, trends in insured versus uninsured patient debt, April 2016

6 Consumerism in Healthcare Insurers/Outside Markets Survey of 31 commercial plans 39% have had price estimator tools for at least 3 years Health Care Cost Institute (Guroo) average prices for 70 services in 300 cities Narrow Networks Government Forces Many State s legislatures calling for action on Price Transparency HFMA - Insurer Price Transparency Tools Proliferate, But Use Lags Modern Healthcare Insurer Tells Public How Much It Pays Providers

7 Missouri Focus on Hospitals The new Focus on Hospitals website provides price and quality data together on a single website. This will allow consumers to research hospitals prior to discussing treatment options with their caregiver. Standard charges for the top 100 inpatient procedures and emergency care Prices are gross charges and do not reflect negotiated discounts or Medicare or Medicaid Rates Self Pay discount is listed (if hospital chose to report it) Financial Assistance policies are not considered Other factors can increase gross charges LOS Utilization Quality Only 80% of Missouri Hospitals participated MHA Missouri Hospitals Launch Consumer Website With Enhanced Price, Quality Data

8 Iowa Iowa Hospital Association strive to communicate information that is useful to patients, families and other health care purchasers Empowering patients and other health care purchasers to make value (price and quality) comparisons clear lines of communication at the point of care delivery Assisting patients in better understanding the total value of their care, including estimated out-of-pocket expenses Iowa Hospital Association Transparency Action Plan

9 Minnesota Minnesota Hospital Price Check Compare Hospital Charges 2007 Top 50 DRGs and today all DRGs Understand three key terms; cost, charge, and price If You Have Insurance If You Are Uninsured Minnesota Hospital Association Hospital Price Check

10 South Dakota South Dakota Hospital PricePoint System Discharge data for the hospital you selected, for all hsopitals.do not include physician charges such as those for a surgeon or anesthesiologist Information about the hospital you selected Overall information about charges and payments to the selected hospital Access to quality and safety information South Dakota Hospital PricePoint System

11 Best Practices Become the key player in the conversation If you don t take control of the message, someone else will. Engage Patient from the front-end Financial Counseling Certified Application Counselors Missouri Clame Program

12 Best Practices Engage Patient from the front-end Patient Estimates Explain out of pocket costs to patients ahead of time Provide Patients options for high deductible plans Evaluate your own pricing strategy and know where you are in the market.

13 Pricing Methodologies New Service Annual or Mid-Year Adjustment Across-the-Board Rate Optimization Strategic & Defensible

14 Four Key Components to Healthcare Pricing Which is most important? Financial Goals Cost Payment Methodology (reimbursement) Competition

15 Pricing Requirements for Today Patient Free Standing Location

16 Five Steps to Establishing a Rational and Profitable Pricing Structure

17 Five Steps to Establishing a Rational and Profitable Pricing Structure Complete understanding of how you are reimbursed Determine price sensitivity Assess Fee Schedules Rate Increase Limitation

18 Actual Impact from Reimbursement Changes Prospective Payment System Hospitals 3 to 5% recovery Critical Access Hospital 20 to 25% recovery

19 Five Steps to Establishing a Rational and Profitable Pricing Structure Comparative Data Analysis Establish a Market Position Receive department input

20 Five Steps to Establishing a Rational and Profitable Pricing Structure Financial Objective Determine Budgetary Requirements Establish percentage adjustment

21 What makes the most sense? High Prices vs. Competition Low High/Low Low/Low High/High Low/High Low High Hospital Sensitivity

22 Five Steps to Establishing a Rational and Profitable Pricing Structure Develop a Pricing Methodology Price alignment for Same CPT Appropriate pricing structure amongst services CT Scan with, without, with & without Contrast

23 Pricing Areas Ancillary Services Room & Board Pharmacy Medical Supplies Free Standing Facilities Physician Fees

24 Five Steps to Establishing a Rational and Profitable Pricing Structure Commercial Contract Negotiation Ensure prices are positioned competitively Be sensitive to favorable contracted terms

25 Five Steps to Establishing a Rational and Profitable Pricing Structure 1. Complete understanding of how you are reimbursed 2. Comparative Data Analysis 3. Financial Objectives 4. Develop a Pricing Methodology 5. Commercial Contract Negotiation

26 Summary Patient Engagement Publicized prices Ensure your prices are competitive Pricing relationship Define and maintain a consistent pricing methodology