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The Price is Wrong

Philip Betbeze, for HealthLeaders Media, June 9, 2008

I know many of you have been working on your retail self-pay prices for various healthcare goods and services on your chargemaster and posting them online. That's admirable work, but not many of you believe in your heart of hearts that it will amount to anything. In many cases, your state legislatures have required you to do it in the aftermath of ugly situations a few years ago where a few bad actors in the hospital business were suing their deadbeat patients for the only thing they had left to pay with—their homes. Many of you have complained (to me and to people in government who are making you post this information) that patients don't care what the retail price is for their care, and you have study after study—as well as pathetic click totals—to back it up.

I agree.

People don't care what the retail price is when they know they'll never pay that price. Posting retail prices for pieces of care or even whole episodes of care is going about the whole consumer in healthcare equation all wrong. What people really want is to know what they, individually, are going to pay for care. That's much harder work than posting prices—work that requires complex algorithms, insurance eligibility checks, and determining copay and coinsurance amounts for a vast multitude of different benefit designs.

This is the point where the whole argument for the consumer's involvement in healthcare, and the comparison of healthcare to other industries where the price is readily available, goes to pot. There's no government sugar daddy who's going to pay half the price of a new car for me. OK, bad example—everyone knows the retail price for a car has no basis in reality. But neither do retail prices in healthcare.

The truth is, people will respond to pricing information for their healthcare if you can tell them what their individual bill is going to be, after the insurer or Medicare gets through paying its portion. If I can go to a hospital's (or physician office's, or health plan's) Web site, plug in a few numbers, and get a price for my care, that's really information I can use. Because rest assured, I'm paying more and more for my care out of my pocket. The numbers are undeniable. The patient's out-of-pocket share for healthcare is going up year after year, and ignoring that trend is either irresponsible or irrational—hope for a deus ex machina to save you, as in, a single-payer or universal healthcare solution. In any case, counting on that outcome is a bad bet.

So what are you left with?

There is good news.

One hospital system I've been talking to isn't counting on the government. In fact, it's doing the opposite by seeing its future tied up in the consumer. Investing in tools to help patients figure out their part of the payment doesn't offer hard ROI—at least not yet—but the leadership at this organization truly believes it's ahead of the game as the future of healthcare payment plays out. They're not being dragged into the future kicking and screaming—they're leading the way.


Philip Betbeze is finance editor with HealthLeaders magazine. He can be reached at pbetbeze@healthleadersmedia.com.
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