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Hospital Pricing Transparency a Marketing Game Changer

Marianne Aiello, for HealthLeaders Media, May 22, 2013

While hospital and health system marketers have traditionally been charged chiefly with touting the qualities of their healthcare services, the exposure of pricing data adds a level of complexity to the marketing mix.

Price comparison has been a top priority for consumers since the dawn of commerce, but it's something I was never particularly focused on until I started receiving daily emails from social spending sites like Groupon and LivingSocial.

Transparency has made me realize that for some things, such as haircuts and shoes, I'm willing to pay a premium in order to get exactly what I want when I want it. For other purchases, such as manicures and cupcakes, I'm willing to wait around for a deal to pop up. At the end of the day a cupcake is a cupcake.

I couldn't help but draw a comparison between consumer social spending and the hubbub revolving around the mandated hospital price transparency that was enacted earlier this month. Suddenly, instead of merely having to produce the best cupcake, er, healthcare, hospitals will have to compete based on price, too.

Price comparison panic
On May 8 the federal government for the first time released the "rate card" detailing the full price hospitals charge before insurance companies apply discounts for more than 100 of the most common services and procedures.

The "sticker price" data comes from claims filed with the Centers for Medicare & Medicaid Services in 2011, including 163,065 separate charges from 3,337 hospitals in 306 metropolitan areas.

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2 comments on "Hospital Pricing Transparency a Marketing Game Changer"


Donald Stumpp (5/23/2013 at 9:57 AM)
We all know there are $200 night hotel rooms and ones you can get for $50. The cost of essentially the same food varies between restaurants as consumers pay for a quality dining experience - with their own definition of what that is. ...... The healthcare consumer has been oblivious to costs and it will take some time to learn, because fortunately, we do not use the services often..... But eventually we will learn. I might pay more for my Dr visit because they are happy to see me, are on time and really help me (think Starbucks coffee), but I might not want to pay $60 for a lab test I can get for $10 elsewhere....... It may not be the patient always asking though. The employer who is essentially funding it all may be the wild card to push this over the edge.

Daniel Fell (5/22/2013 at 1:06 PM)
Good article and nice to see the coverage of healthcare pricing in general as it is once of the most frustrating and puzzling aspects of our industry. However, I believe the Holy Grail is not quality or price but rather value. Hospitals that successfully marry the two into compelling messages to health plans, physicians and patients will ultimately succeed. And many will be able to charge higher prices that they'll be able to justify. And those will low quality and high prices will cease to exist.