BILL TRANSPARENCY MBAA © 2014

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Bill Transparency Driven by Consumers

RELATED OPINIONS

BILL TRANSPARENCY MBAA © 2014

From charging almost $20 for a simple pen used to mark a patient’s skin for surgery to charging a 500 percent markup for a single over-the-counter pain reliever (and each subsequent pill dispensed), the healthcare industry has its share of questionable billing practices. "The way many healthcare facilities remain unclear on the prices they charge for their services is a major issue in our healthcare industry today. This lack of transparency results in a mess of confusion and frustration among consumers as well as impressive revenue gains for the facilities in question. "Furthermore, patients are becoming responsible for an increasingly higher percentage of their own medical costs, and many are becoming aware of this issue and are demanding more transparency.

""This non-transparency isn’t limited to complicated issues or treating life-threatening ailments. Instead, it is affecting people from all walks of life and all levels of physical health for just about anything we can imagine – blood tests, diagnostic imaging, vaccinations - you name it. "Let’s say a young, healthy man fell down and hit his head pretty hard after making the game-winning catch at his family’s annual touch football game. His doctor is pretty certain he’s fine, but to err on the side of caution, he decides to go ahead and order a few tests to rule out a serious injury that could produce delayed effects worse than the major headache he’s currently dealing with. "Now let’s say our hypothetical patient gets the CT scan results back and is thankful to find out that his head injury is minor, and he’ll be fine. A couple weeks later, he gets slapped with a bill for $900 - his portion of the charge for the CT scan - giving him a different kind of headache. His insurance paid almost half of the charge, but to him, a bill of that size doesn’t seem like any kind of deal or discount. "The same guy may also take issue with the fact that another patient paid $200 at the same facility, for the same procedure, and using the same machine. Similarly, patients who are on Medicaid are often charged on the lower end of the pricing structure. "

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Who Does This Affect?

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So why was our patient charged nearly $2 ,000 ( i nc l ud ing h i s i nsu rance company’s portion) while someone else was charged 90 percent less? Price variances for the same services are long known for having an enormous gap, and without the consumer demanding transparency, there may never be relief. "Varied costs of diagnostic imaging can be up to 600 percent at the same facility, blood tests can vary by 200 percent. One report even cited that a cholesterol panel can vary by almost 500 percent in one U.S. metropolitan area. The report

stresses the fact that the tests are all done the same, in the same office with the same level of precision and that the facilities have the opportunity to charge more in certain cases, so they do. "Although price and quality both vary across the country (and even in the same facilities) they are not necessarily related. Plenty of high-quality care is received at low prices, and higher prices do not in any way indicate high quality.

"TransUnion Healthcare surveyed 7,500 people and reported that pre-treatment costs are not being provided each time patients ask for them. In fact, only about 25 percent of patients claim to have received pricing while many more actually requested pricing before undergoing any type of procedure. "Typically, providers aren’t upfront regarding costs. Heightened frustration over this lack of transparency is leading to more noise among consumers and an ever-increasing demand for this issue to be brought to the surface and set straight. "Dave Wojczynski, Sr. Vice President at TransUnion Healthcare, said that contracts drawn up between healthcare providers and insurance companies have kept prices hidden from consumers. Such agreements are loaded with hitches and gray areas, which only complicate it more for the consumer. "Furthermore, it is unlike the freedom consumers have to compare prices when shopping for the best deal before making purchases. Many just have to stick with what they get where they are sent. "

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The Consumers’ Voice

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Patient satisfaction, which is a large part of Obamacare, matters more to many providers now, and Wojczynski says that they are “definitely speaking their voice on patient satisfaction.” Providers will want higher satisfaction ratings with patients, which, according to the report, are affected by price transparency. ""We definitely have a correlation between the billing experience to the patient, and how it affects their overall experience in terms of customer satisfaction," Wojczynski said. "It has been noted that the Department of Health and Human Services could use their authority to pass a law giving all Americans the right to know the exact cost of their own healthcare, but Wojczynski believes that the consumers (not some mandate) are the ones that will initiate these changes by continuing to voice their opinion on the issue.

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We definitely have a correlation between the billing experience to the patient, and how it affects their overall experience in terms of

customer satisfaction.

- Dave Wojczynski

BILL TRANSPARENCY MBAA © 2014

"Even though most facilities are aware of the consumers’ desire for price transparency, half of those surveyed still said their bills left them perplexed. Almost 70 percent said that they were stunned by the costs, and almost the same amount of people said they want to know what the actual cost of healthcare is (including the portion their insurer covers). The remaining consumers (about 30 percent) reportedly only want to know what their portion of the bills would cost. "Also, the majority of those surveyed (over 80 percent) said it would be either “helpful” or “extremely helpful” if they knew what the expenses would be in advance. Imagine all of these individuals speaking up. The facilities would have no choice but to listen. "

"If insurance companies wanted to get on board to support price transparency, they could start by snubbing any agreement with a facility that included a “gag clause,” which is a part of the contract that would prohibit price disclosure to the patient. "Whether or not insurance companies would get on board is unknown as they face their own complicated web of agreements with hospitals. But since the premiums they charge are part of the reflection of what they pay out, they may have some incentive of their own. "

Consumers could also reject any plan or service that did not offer the option to receive estimates for treatment ahead of time. It stands to reason that if you take a car in for repair, you want an estimate before they start services. So why would your own healthcare be any different? "One report recommended demanding “volume and outcome data” from insurance companies and Medicare to give consumers more flexibility and the chance to view and go for lower-cost or higher-quality providers. "

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Strength in Numbers

The Data

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Den Bishop, chairman of a consulting company advocating for decreased healthcare costs, warned people to avoid having a heart attack near Covenant Medical Center in Lubbock, Texas, because they charge over 400 percent what the Lubbock Heart Hospital charges. "Another warning by Bishop said, “We can’t have a system that caps what one side of the economy pays while the other is completely exposed in a non-transparent environment. We have to get to the point where we know price and quality.” "Bishop suggests that consumers be proactive and communicate ahead of time with their health insurance company to avoid the sticker shock that comes with so many medical bills. He also warned against being fooled by what he referred to as “reverse incentives.” "This occurs when a patient is sent to a place that charges more money and then is given a discount, making the patient feel as if he or she just got a great deal. "This is the equivalent of a local apparel retailer inflating prices and then offering a discount off of the higher price. Consumers are lead to believe they got a great deal, when in all actuality, they paid more than they would have elsewhere. Bishop said, “The system has caused us to focus on discounts rather than what we really pay for services.”

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We can’t have a system that caps what one side of the economy pays while the other is completely exposed in a non-transparent environment. We have to get to the point where we know price and quality.

- Den Bishop

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