Health system deploys cost calculator to offer patients price transparency
One area in the patient experience that needs improving is price transparency before patients schedule healthcare services. In fact, the Trump Administration has even mandated that hospitals make this happen by posting the prices for “shoppable” healthcare services online.
Some healthcare provider organizations, such as University Health Care System in Augusta, Georgia, are several steps ahead of this mandate.
“Basically, price transparency is a challenge that hospitals everywhere face: How to give patients fast, accurate estimates prior to scheduling service,” said George Ann Phillips, administrative director for revenue cycle at University Health Care System. “This has historically been a complicated endeavor because prices vary according to the patient’s unique insurance coverage and also the acuity of their medical condition.”
Hospital staff at University Health typically had to sift through books of payer codes and their associated payments, with no real guarantee this information was the most current. Over the years, payers began to make this information available on their websites, which was definitely a help. But it still did not translate into a scalable solution. Someone still had to log into the payer’s website and do similar research on costs.
"Definitely approach price transparency as a way to help your patients – which means it needs to be fast, simple and convenient to the patient. And above all, accurate."
George Ann Phillips, University Health Care System
“The issue really came to the forefront with the advent of high deductible, high co-insurance health plans,” Phillips recalled. “Patients are having to pay more for the cost of care, and that’s resulted in more requests for pre-service price estimates. To that end, our hospital board made a proactive decision to make patient-friendly price transparency a top initiative. The goal was to make getting price estimates a convenient and simple transaction for our patients.”
Health IT vendor Recondo Technology proposed to University Health a self-service online price estimator, embedded on the University Health website, that anyone could use.
A patient inputs a few pieces of demographic data, the procedure code and their insurance policy number, and an accurate estimate of their out-of-pocket cost is generated in under a minute.
“This sounds so simple, many will wonder why hospitals haven’t implemented self-service calculators years ago,” Phillips remarked. “But it is a deceptively simply solution. Behind the scenes, technology like robotic process automation and sophisticated rules engines power the price estimator, and Recondo is one of very few vendors that have been doing the back-end work for years to develop such a solution.”
For example, the vendor also has a price estimate solution that works within the EHR from Epic or other hospital information systems. University Health first used that system, which laid the groundwork for then deploying the online price estimator. It’s the same technology, but patient-facing.
MEETING THE CHALLENGE
The online price calculator is embedded directly in the University Health website. Anyone can use it to find out how much their out-of-pocket cost will be for a procedure or service.
For example, if a patient wanted to check how much a joint replacement surgery would cost them out-of-pocket, they would enter some information, including insurance policy number. They also would input the procedure code, which they can easily find with the calculator’s drop-down list.
“Once the calculator has this information, it uses robotic process automation or ‘bots’ to go to your insurance company’s website and look up your coverage levels, including your real-time deductible used to date and your co-insurance percentage,” Phillips explained. “The bots also check to make sure you’re eligible for the procedure, according to your plan.”
With this information in hand, the bots then work with the rules engine to calculate the price estimate, using the information from the payer’s website and University Health’s chargemaster list as factors.
The price calculator technology so far has replaced the manual process of creating price estimates with a digital solution, transitioning staff hours from performing out-of-pocket calculations to assisting patients in understanding their out-of-pocket costs and scheduling the patient for their needed healthcare services.
“Digital estimates are highly accurate, within 5%,” Phillips attested. “And patient upfront payments have been steadily increasing year over year; since the calculator was only deployed this year, we don’t have a clear metric yet to attribute to the calculator for upfront payment increases. However, after we deployed Recondo’s first price estimator solution, which we embedded in one of our hospital information systems and was used internally to quickly generate estimates at a patient’s request, upfront payments jumped by 50% – from $3 million to $4.5 million over a period of just a few years.”
University Health found that its patients were willing to pay at the point of service if they understood their out-of-pocket costs.
ADVICE FOR OTHERS
“Definitely approach price transparency as a way to help your patients – which means it needs to be fast, simple and convenient to the patient. And above all, accurate,” Phillips advised. “The web form for submitting a price estimate request needs to be intuitive and brief. The procedure codes should be searchable in general, universally understood terms.”
A healthcare provider organization will need to perform due diligence to confirm the algorithms and bots that drive a system are designed around large sets of quality healthcare price data, she added.
“And circling back to the patient – use the calculator in a way that encourages the patient to schedule instead of delay needed care,” she said. “You can include prompts in the calculator that recommend payment assistance programs as one example. And because the calculator captures the email addresses, you can reach out to people who have submitted estimate requests but didn’t follow through on scheduling care. A timely, caring outreach email can encourage someone to go ahead and do so.”