The evolution of e-commerce – led by Amazon – has created an intensely savvy consumer population. Amazon’s platform allows users to easily compare products from different vendors to get the best price. People travel to retail stores to try on clothes and shoes, only to purchase them online for less. Even the longest running game show in television history awards points for knowing how much consumer products cost.
Healthcare, on the other hand, does not engender the same kind of visibility around pricing for services. Patients often don’t know how much they will pay for their care until they are standing at the pharmacy counter or after the care is delivered. So, when CMS implemented a new rule in 2021 that required hospitals to publicly post service costs, it marked the beginning of a shift to a patient-friendly model across the industry. This year, the agency applied the same model to insurers – allowing patients to see what their insurance provider covers and the out-of-pocket costs for items or services.
These price transparency mandates represent a positive first step, but the most meaningful change in this area is yet to come. Hospitals and health plans must currently post their pricing data in a “machine-readable” format, which is not easy for an average consumer to understand. The true impact on patient decision-making will come when patients have the same easy access to pricing information that they enjoy on Amazon – empowering them with the data they need to make the best decisions for their care. These are the steps the healthcare system must take to bring that vision to fruition:
Right place, right time
Patients and providers don’t just need more visibility into care costs, they need visibility as quickly as possible. For some conditions, shortening the time to therapy is critical to avoid serious disease progression – the sooner patients start on therapy, the better. The point-of-care marks the first opportunity for patients and their providers to weigh different care plan options.
Establishing cost in the doctor’s office helps to avoid several issues, such as the worst-case-scenario of a patient learning they can’t afford the care ordered and becoming non-adherent. Additionally, real-time cost visibility can prompt a discussion around care options and alternatives, avoiding unnecessary downstream work if a patient is unwilling to pay for their care at the time of service.
Transparency at the point of care also uncovers whether the order requires prior authorization from an insurer, which leads to paperwork and/or phone calls between the care provider, the insurer, and the patient. If the physician can identify effective care that does not require prior authorization, both the patient and physician’s office can save time and avoid administrative hassle. Patients need to know which options their health plan will cover and how much of the cost they are responsible for, allowing them to select the option with the lowest out-of-pocket cost and least friction.
Restore consumer choice
Before Amazon completely changed how consumers buy just about anything, it put tremendous pressure on book retailers and publishers, and created a highly competitive marketplace. That pressure forced incumbents in the book business to improve their customer experience or lose out to Amazon, and it gave the book consumer more choice than ever before. Amazon’s platform laid bare all of the potential prices for books, building trust and creating a loyal customer base.
In healthcare, the often opaque prices come from a defensive impulse to retain customers, but this is a short-sighted strategy. Amazon created the gold standard in customer engagement and retention – and those in healthcare who follow Amazon’s lead in building trust will be the market leaders of tomorrow. That trust starts with proactively helping patients navigate and understand the complexities of healthcare pricing. High deductibles and limited coverage have placed a significant share of the cost of care on patients, and they deserve a better way to mitigate out-of-pocket spending.
Provider organizations already have the benefit of patient trust through the high quality care they provide. Combining clinical excellence with insight to make the most cost-efficient choices for patient care will elevate that trust further.
Power in the platform
The EHR is constantly evolving to integrate new capabilities – including the ability to display accurate cost and coverage information. Integrating data visibility will create a highly personalized and intuitive platform that helps patients feel more in tune with their care.
EHRs, however, have a much more challenging environment compared to an e-commerce platform. EHR vendors must introduce choice based on health plan design and affordability, but also protect the provider experience so that it maintains its primary focus of quality patient care. Those that succeed in striking this balance will catapult the industry into the 21st century tech experience consumers have come to expect.
The first stage of price transparency will come at the point of care, but the next phase will be even more transformational – when a patient can pull up the cost of a prescription or service on their smartphone – just as easily as they find a book on Amazon.
The tools for this transformation are widely available today. Now, healthcare providers, plans, and EHR vendors need to give patients the information and customer experience that they deserve.
About Kyle Kiser
Kyle Kiser is the CEO of Arrive Health, a leading provider of integrated solutions that improve patient access to care.