Knee Replacement Surgery? Please Hold For Your Price

Philip Betbeze, for HealthLeaders Media, October 6, 2008

I wrote in my column last week that when given a choice, employees are largely not opting for the high-deductible health plan option as their health plan due to a variety of factors. But the truth is, many employees aren't getting that choice. In fact, I heard from a lot of you last week after the column ran, including some hospital and health system CFOs who keep close tabs on local employers, and you're saying that high-deductible health plans are becoming the only alternative to no insurance at all for employees at many of these companies. The fact that health savings accounts aren't being funded at nearly the rate they should is immaterial, you've said. The plans are being forced on employees as a fait accompli.

So what does that mean for hospitals and health systems—or any other entity in the business of providing healthcare services? It means you have to compete on price and quality—but especially on price.

According to my friends at Alegent Health, who have seen this transformation coming for a few years now, hospitals have to get better at being able to tell patients what they can expect to pay out of pocket for services rendered. For anyone contemplating the stars that have to align to provide this information, this is a daunting task. There are thousands of variables involved in calculating a price for a simple surgical procedure. Patients incur complications. Reimbursements change. Dozens of payers with dizzying arrays of plans that contain rules and exceptions further complicate the process.

But it has to be done if you're to compete in the new paradigm of consumer and patient engagement. People get the information they want for most other purchases, and they're going to expect it for their healthcare, too—because more than ever before, they're paying for it.

In Omaha, NE-based Alegent's case, it has been done. Leaders there started with the premise that the forces causing patients to demand prices prior to service are beyond the patient's control and beyond Alegent's control. Alegent couldn't fight the tide, so it decided to swim with it—wholeheartedly. Further, to compete in the era of consumers shopping around for their healthcare, Alegent needed this information as much as patients do—to see how the system stacks up against the competition, if for no other reason. Patients can now call in or navigate the health system's MyCost Web site and get a pretty accurate idea of what they're going to have to pay out of their own pocket for most services and what their health plan's going to pay for their care, if they have one.

It's not that Alegent doesn't have more work to do. It does. But its senior leaders feel they're off to a good competitive start. And the best part is, they're willing to share.

I don't do this very often, if ever, but I'm going to tout something we at HealthLeaders are selling to you because I believe in it so strongly. I'm hosting a Webcast Oct. 21 featuring the system's CFO, an individual hospital CFO, and the corporate chief marketing officer, and they'll share with participants their experiences setting up their system, hints about where they stumbled and where they succeeded, and where they're going with the program in the future. And speaking of cost, you can crowd as many people in your organization around one computer to watch and listen for one low price. I'm very excited about this Webcast, and I hope you'll consider tuning in to the event.

Philip Betbeze is finance editor with HealthLeaders magazine. He can be reached at
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