Price Transparency in Healthcare Requires Higher Accuracy and Technology Adoption to Regain Patient Trust

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Price Transparency in Healthcare
Requires Higher Accuracy and
Technology Adoption to
Regain Patient Trust
Transcript of a discussion on how new transparency on costs in healthcare provides both a step
toward more educated choices as well as an opportunity to use technology to inform and instruct
throughout increasingly complex payer-provider-patient processes.
Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HealthPay24.
Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and
you’re listening to BriefingsDirect. Our next healthcare finance insights discussion
explores the impacts from increased cost transparency for medical services.
The recent required publishing of hospital charges for medical procedures is but one
example of rapid regulatory and market changes. The emergence of more data about
costs across the health provider marketplace could be a major step toward educated
choices – and ultimately more efficiency and lower total expenditures.
But early-stage cost transparency also runs the risk of out-of-context information that
offers little actionable insight into actual consumer costs and obligations. And unfiltered
information requirements also place new burdens on physicians, caregivers, and
providers – in areas that have more to do with economics than healthcare.
To learn more about the pluses and minuses of increased costs transparency in the
healthcare sector, we are joined by our expert panel:
• Heather Kawamoto, Chief Product Officer at Recondo Technology in Denver.
• Joann Barnes-Lague, Revenue Cycle Director at Shields Health Care Group in
Quincy, Mass.
• Julie Gerdeman, President at HealthPay24 in Mechanicsburg, Penn.
• Beth Jones Sanborn, Managing Editor at Healthcare Finance News/HIMSS
Media in Portland, Maine.
• Alena Harrison, Senior Director of PBM Innovation at CVS Health
in Woonsocket, RI.
Welcome to you all. For better or worse, we are well into an era of new transparency
about medical costs. Heather, why is transparency such a hot issue right now?

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Kawamoto: It’s largely due to a cost shift. Insurance
companies are having patients owe more of a payment’s
portion. With that there has been a significant rise in the
high-deductible health plans -- not only in the amount of the
deductible, but also in the number of patients on high-
deductible plans.
And when patients get, sadly, more surprise bills, we start to
hear about it in the media. We also have the onset this
month of the IPPS/LTCH PPS final rule from the Centers for
Medicare and Medicaid Services (CMS) [part of the U.S.
Department of Health and Human Services].
The New York Times did a recent story about this, and that’s
created buzz. And then people start saying, “Hey, I know I have a medical service
coming up, I probably need to call in and actually find out how much my service is going
to be.”
Gardner: It seems like the consumer, the patient, needs to be far more proactive in
thinking about their care, not just in terms of, “Oh, how do I get better? Or how do I stay
as healthy as I can?” But in asking, “How do I pay for this in the best possible way?”
That economic component wasn't the case that long ago. You would get care and you
didn't give much thought to price or how it was billed.
Joann, as somebody who provides care, what’s changed that makes it necessary for
patients to be proactive about their health economics?
Know before you owe
Barnes-Lague: It’s the consumer-driven health plans,
where patients are now responsible for more. They have
to make a decision – “Do I buy my groceries, or do I have
an MRI.”
The shift in healthcare makes us go after the patient
before insurance is paid 100 percent. Patients now have
a lot of skin in the game. And they have to start thinking,
“Do I really need this procedure, or can it wait?”
Gardner: And we get this information-rush from other
parts of our lives. We have so much more information
available to us when we buy groceries. If we do it online,
we can compare and contrast, we can comparison shop, we can even get analysis
brought to the table. It can be a good thing.
Kawamoto
Barnes-Lague

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Julie, you are trying to help people make better paying decisions. If we have to live with
more cost transparency, how can technology be a constructive part of it?
Gerdeman: It's actually a tremendous opportunity for
technology to help patients and providers. We live in
an experience economy, and in that economy
everyone is used to having full transparency. We’re
willing to pay for faster service, faster delivery.
We have highly personalized experiences. And all of
that should be the same in our healthcare
experiences. This is what people have come to
expect. And that's why, for us, it’s so important to
provide personalized, consumer-friendly digital
payment options.
Sanborn: As someone who has been watching these
high-deductible health plans unfold, data has come
out saying the average American household can't afford a $500 medical bill, that an
unexpected $500 medical bill would drastically impact that household’s finances for
months. So people are looking to understand upfront what they are going to owe.
At the same time, patients are growing tired of the
back-and-forth between the provider and the payer,
with everyone kicking the can back and forth
between then saying, “Well, I don’t know that. Your
provider should know that.” And the provider says,
“Well, your health plan is the one that arbitrates the
price of your care. Why don't you go ask them?”
Patients are getting really, really tired of that.
Now the patients have the bullhorn, and they are
saying, “I don't care whose responsibility it is to
inform me. Someone needs to inform me, and I want
it now.” And in a consumer-driven healthcare space,
which is what’s evolving now, consumers are going
to go where they get that retail-like experience.
That’s why we are seeing the rise in urgent care
centers, walk-in clinics, and places where they
don’t have to wait. They can instead book an
appointment on their phone and go to the
appointment 20 minutes later. Patients have the
opportunity to pick where they get their care and
they know it. At the same time, they know they
can demand transparency because it's time.
Gerdeman
Sanborn
Patients have the opportunity
to pick where they get their
care and they know it. At the
same time, they know they
can demand transparency
because it’s time.

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Gardner: So transparency can be a force for good. It can help people make better
decisions, be more efficient, and as a result drive their cost down. But transparency can
put too much information in front of people, perhaps at a time when they are not really in
a mindset to absorb it.
What are you doing at CVS, Alena, to help people make better decisions, but not
overload them?
Clear information increases options
Harrison: The key to good transparency tools is that they
have to be a 100 percent accurate. Secondly, the information
has to be clear, actionable, and relevant to the patient.
If we gave patients 10 data points about the price of a drug --
and sometimes there are 10 prices depending on how you
look at it -- it would overwhelm folks. It would confuse them,
and we could lose that engagement. Providing simple, clear
data that is accurate and actionable shows them the options
specific to their benefit plan. That is what we can do to help
consumers navigate through this very complex web in our
healthcare system.
Gardner: Recondo helps people create and deliver estimates
throughout this process. How does that help in providing the right information, at the
right time, in the right context?
Kawamoto: It's critical to provide [estimate information] when a patient schedules their
service, because that gives them the opportunity -- if there is a financial question or
concern -- to say, “Okay, I don’t know that I can pay for that. Is there another location
where the price might be different? What are my financial options in terms of the
payment plan or some sort of assistance?”
Enabling providers to proactively communicate
that information to patients as they schedule a
service or in advance gives patients an
opportunity to shop. They know they are going
to be meeting with an orthopedic surgeon
because they need knee arthroscopy.
In advance of that, they should be able to get some idea of what they are going to owe,
relative to their specific benefit information. It puts them in that position to engage with
the orthopedic surgeon to say, “I looked at the facility and it's actually going to be
$3,000. What are my options?” Now, that provider can be a part of the cost discussion. I
think that is critical.
Harrison
Enabling providers to proactively
communicate that information to
patients as they schedule a
service or in advance gives
patients an opportunity to shop.

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Barnes-Lague: As providers we have to be okay with patients making that decision, of
saying, “Maybe I won’t have that service now.” That’s consumer-driven. And sometimes
that hurts our volume.
We may have had a hard time
understanding that in the
beginning, when we shared
estimates and feared that the
patients wouldn't come. Well,
would you rather trick them and
then have bad debt?
It’s about being comfortable with the patient making educated decisions. Perhaps they
will come back for your MRI in December when their deductibles are met, and they can
better afford it.
Learn How to Meet Patient Demands
for Convenient Payment Options
for Healthcare Services
Gardner: Part of this solution requires the physician or practitioner to be educated
enough to help the patient sort out the finances, as well as the care and medical
treatments. As someone who has a lot of clinicians, technicians, and physicians, are
they not the primary point for more transparency to the patient?
Barnes-Lague: That would be the ideal solution, to have the physicians who are
referring these very expensive services to begin having those conversations. Often
patients are kind of robotic with what their doctors tell them.
We have to tell them, “You have a choice. You have a choice to make some phone calls.
You have a choice to do your own price shopping.” We would love it if the referring
physicians began having those price-transparency conversations early, right in their
offices.
Gardner: So the new dual-major: Economics and pre-med?
Julie, your background is in technology. You and I both know there are lots of
occupations where people have complex decisions to make. And they have to be
provided trust and accommodation to make well-informed decisions.
Whether you are a purchasing agent, chief executive, or chief marketing officer, there
are tools and data to help you. There have been great strides made in solving some of
these problems. Is that what we are going to see applied to these medical decisions
across the spectrum of payer, provider, and patient?
We may have had a hard time
understanding that in the beginning, when
we shared estimates and feared that the
patients wouldn’t come. Well, would you
rather trick them and then have bad debt?

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Easy-to-access, secure data builds trust
Gerdeman: This field is ripe for disruption. And technology, particularly emerging
technology, can make a big difference in providing transparency.
A lot of my colleagues here have talked about trust. To me, the reason everybody is
requiring transparency is to build trust. It goes back to that trusted relationship between
the provider and the patient.
The data should be available to everyone. It’s now time to present the data in a very
clear, simple, and actionable way for them to make decisions. The consumer can make
an informed decision, and the provider can know what the consumer is facing.
Gardner: Yet to work, that data needs to be protected. It needs to adhere to multiple
regulations in multiple jurisdictions, and compliance is a moving target because the
regulations change so often.
Beth, what do we do to solve the data availability problem? Everybody knows data is
how to solve it. It’s about more data. But nobody wants to own and control that data.
Sanborn: Yes, it’s the $64,000 question. How do you own all that data and protect it at
the same time? We know that healthcare is one of the most attacked industries when it
comes to cyber criminals, ransomware, and phishing.
I hear all the time from experts that as much as the human element drives healthcare, as
far as data and its protection [the human element] is also the greatest vulnerability. Most
of the attacks you hear about happen because someone clicked on a link in an email or
left their laptop somewhere. These are basic human errors that can have catastrophic
consequences depending on who is on the receiving end of that error.
Technology is, of course, a huge part of the
future, but you can't let technology develop
faster than the protections that have to go with it.
And so any developer, any innovator who is
trying to help move this space forward has to
make cybersecurity a grassroots foundational
part of anything that they innovate.
It’s not enough to say, “My tool can help you do this, this, and this.” You have to be able
to say, “Well, my tool will help you do this, this, and this, and this is how we are going to
protect you along the way.” That has to be part of, not just the conversation, but every
single solution.
Gardner: Alena, at CVS, do you see that data solution as a major hurdle to overcome?
Meaning the controlling, managing, and protection of the data -- but also making it
available to every nook and cranny that it needs to get to?
Technology is, of course, a
huge part of the future, but you
can’t let technology develop
faster than the protections that
have to go with it.

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Harrison: That’s always a key focus for us, and it’s frankly ingrained in every single
thing we do. To give a sense of what we are putting out there, the price transparency
tools that we have developed are all directly connected to our claims system. It’s the
only way we can make sure that the patient out-of-pocket costs we provide are 100
percent accurate. They must reflect what that patient would pay as they go to their local
pharmacy.
But making sure that our vendor partners have a robust and very rigorous process
around security is paramount. It takes time to do that, and that’s one of the challenges
we all face.
Gardner: So we have a lot going on with new transparency regulations, and more
information coming out. We know that we have to make it secure, and we are going to
have to overcome that. So it’s early still.
It seems to me, though, there are examples of the tools already developed and how they
can be impactful; they can work.
Joann at Shields, do you have any examples of what benefits can happen when you
bring in the right tools for transparency and for making good decisions?
Transparency upfront benefits bottom line
Barnes-Lague: Yes, we bring in more revenue and we bring it in timely. We used to be
at about 60 percent collected from the patient’s side overall. Since we implemented
tools, we are at 85 percent collected, a 400 percent increase in our overall revenue.
We have saved $4.5 million in [advance procedure] denials, just based on eligibility,
authorization, and things like that. We are bringing in more money and we don’t require
as much labor because of the automation. We are staffed around the automation now.
Gardner: Julie, how does it work? How do better tools and more information in advance
help collect more money for a medical transaction?
See the New Best Pactice
of Driving Patient Loyalty
Through Estimation
Gerdeman: It works in a couple of ways. First, from a patient-facing perspective, they
have the access to pay whenever and wherever they are. Having that access and
availability is critical.
Also they need to be connected. An estimate – like Heather talked about, to be able to
make a decision from that -- has to be available from the very beginning.

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And then finally, it's about options. All of these things help drive adoption if you give a
patient options and clarity upfront. They have a choice of how to pay and they have the
knowledge about costs. That adoption drives success.
So if you implement the tools appropriately you will see immediate impact. The patients
adopt it, the staff adopts it, and then it drives up the collections that Joann is talking
about.
Gardner: Heather, we have seen in other industries that tracking decision processes
and behaviors leads to understanding use patterns. From them, incentivization can
come into play. Have you seen that? How can incentives and transparency improve the
overall economic benefits?
Incentivization improves savings
Kawamoto: Being able to communicate to patients what their anticipated out-of-pocket
costs will be is powerful. A lot of organizations have created the means where they say
to the patient, “If you pay this amount in advance of your service, you will actually get a
discount.” That puts the patient in a position to say, “I could save $200 if I decide to pay
this today.” That's a key component of it. They know they are going to get a better cost if
they pay sooner, and then many of them are incented to do that.
Gardner: Any other thoughts about incentives, Alena?
Harrison: Yes. An indirect incentive, but still quite relevant, is that our price
transparency tools are available to all of our CVS Caremark members. We are seeing
about 230,000 searches a month on our website.
When members search for the drugs they are
taking, if there are lower-cost alternative
options, we see members in their next refill
order one of those lower cost drugs 20 percent
of the time. That results in an average savings
of $120 per prescription fill for those patients.
As you can imagine, over the course of several
months, that savings really starts to add up.
Gardner: We have come back to the idea of the out-of-pocket costs. The higher the
deductible, the lower the premiums. People are incentivized therefore to go to lower
premiums. But then, heaven forbid, they have an illness, and then they have to start
thinking about, “Oh my gosh, how do I best manage that out-of-pocket deductible?”
Nowadays, with technologies like machine learning (ML), artificial intelligence (AI), and
big data analytics, we are seeing prescriptive or even recommendation types of
technologies. How far do we need to go before we can start to bring some of those
If there are lower-cost
alternative options, we see
members order one of those
lower cost drugs 20 percent of
the time. That results in savings.

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technologies about making good recommendations based on data -- rather than intuition
or even a lack of informed decision making — to medical finance decisions? How do we
get to that point where we can be proscriptive in automated recommendations, rather
than people slogging through this by themselves?
Automated advice advances
Gerdeman: At HealthPay24 we are looking at predictive analytics and what role the
predictive capability can play in helping make recommendations for patients. That’s not
necessarily on the clinical or pharmaceutical side, but we know when a patient makes an
appointment and gets an estimate what their propensity to pay will be.
Proactively we can offer them options based on what we know ahead of time. They don't
even have to worry about it. They can just say, “Okay, here are my choices. I have only
saved up $500; therefore, I am going to take advantage of a loan or a payment plan.”
And I do believe that technology will help.
On the AI side, it’s already starting. As you talk to providers, they are using it for
repetitive processes. But I think there is even more opportunity on the cognitive side of
AI to play [a role] in hospitals. So there is a big opportunity.
Gardner: We already see this in financial markets. People get more information, they
get recommendations, and there is arbitrage. It’s not either/or. It’s what are the
circumstances? What’s the credit we can offer? How do we make the most efficient
transaction for all parties?
So, as in other transactions, we have to gain more comfort with the combination
economics and medical procedures. Is that part of the culture shift? You have to be a
crass consumer and you have to be looking out for your health.
Any thoughts about the need to be both a savvy consumer as well as a patient?
View a Webinar on How Accurate
Financial Data Helps Providers
Make Informed Decisions
Kawamoto: It's critical. To Julie’s point, we are now looking through our data and
finding legitimate savings opportunities for patients, and we’re proactively outreaching to
those patients. Of course, at the end of the day, the decision is always in the provider’s
hands -- and it should be, because not all of us are clinicians. I certainly am not. But to
allow patients to prompt that fuller conversation helps drive the process, so the burden
isn't just on the provider. This is critical.
Gardner: Before we close out, any recommendations? How should the industry best
prepare for more transparency around procedures and payments in medical

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environments? Joann, what do you think people should be thinking about to better
prepare themselves as providers for this new era of transparency?
Lead with clear communication
Barnes-Lague: Culture is very important within the organization. You need to continue
to talk. It’s shifting. Let’s talk about the burden to the provider, now that the patients are
responsible for more. There is no other product that you can purchase without paying
upfront. But you can walk away from healthcare without paying for it.
The more technology you implement, the more transparency you can provide, the more
conversations you can have with those patients – these not only help the patients. You
as providers are in business for revenue. This helps bring in the revenue that you have
lost with the shift to consumer-driven health plans.
Gardner: Heather, as someone who provides tools to providers, what should they be
thinking about when it comes to a new era of transparency?
Kawamoto: While there have been tools available to providers, now we have to make
those tools available to patients. Providers are, in many cases, the first line of
communication to patients. But before that patient even schedules, if they are in a
position to know they need a service, they can go out and self-shop.
That’s what providers need to be thinking
about. How do I get even further out into
the decision-making process? How do we
engage with that patient at that early point,
which is going to build trust, as well as
ensure that revenue is coming to your
particular facility?
Gardner: Beth, what advice do you have for consumers, the patients? What should they
be thinking about to take advantage of transparency?
Take care of physicians and finances
Sanborn: First, I want to advocate for the physicians. We hear all the time about
change fatigue, burnout; burnout is as hot a topic as transparency. If providers are going
to be put in the position of having to have financial conversations with patients, I think
health system leaders need to be aware of that and make sure that providers are
properly educated. What do they need to know so that they can accurately communicate
with patients? And they need to understand how that's going to affect the workload --
that is already onerous and at times damaging -- to physicians. So along Joann’s
How do we [providers] engage with
that patient at that early point,
which is going to build trust, as
well as ensure that revenue is
coming to your particular facility?

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comments about culture, there needs to be a culture around ushering in physicians into
that role.
From a consumer standpoint, when we look at the law that just went into effect, patients
need to understand what are they looking at. The price list that the hospital is publishing
is a chargemaster. It’s a naked price from a hospital. It's not what they are going to pay,
and so we need to eradicate the sticker shock that I am sure is happening at first glance.
Gardner: The patient needs to self-educate about what’s net-net and what’s gross when
it comes to these prices?
Sanborn: Right. You can put these prices in plain terms. The chargemaster is what a
hospital charges. But remember you have insurance. There are discounts for self-pay.
There could be other incentives or subsidies that you are eligible for.
So please don't have a heart attack,
literally, when you look at this price and
go, “Oh, my gosh, is that what I am
responsible for?” Patients need to be
educated on what they are looking at, and
then understand the options available to
them as far as what you are actually going
to pay.
And the other thing is benefits literacy. Payers need to make sure they are reaching out
to their consumers and making sure their consumers understand how the benefits work
so that they can advocate for themselves.
Gardner: Alena at CVS, as a provider of pharmaceutical services and goods, what
advice do you have about making the best of transparency?
View Provider Success Stories
on Driving Usage, Adoption,
and Loyalty Among Patients
Harrison: Beth hit the nail on the head with a lot of her points. We see similar brute-
force regulation happening in the prescription drug space. So pharmaceutical
manufacturers now need to publish their “sticker” prices.
Little do most people know, the sticker price is something no one pays. Payers don't pay
it. Patients certainly don't pay it. The pharmacy doesn’t pay it. And so it is so critical as
this information becomes available to make sure that your customers, consumers, and
members understand what they are looking at. You as an organization should be
prepared to support them through the process of navigating this additional information.
Patients need to be educated on
what they are looking at, and then
understand the options available to
them as far as what you are
actually going to pay.

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Gardner: Julie, what should people be thinking about on the vendor side, the people
providing these tools, now that transparency is a necessary part of the process? What
should the tool providers be thinking about to help people navigate this?
Gerdeman: It comes back to the user experience -- providing a simple, clear, and
consumer friendly experience through the tools. That is what’s going to drive usage,
adoption, and loyalty.
Technology is a great way for providers to drive patient loyalty, and that is where it’s
going to make a difference. That’s where you are going to engage them. You are going
to win hearts and minds. They are going to want to come back because they had a great
clinical experience. They feel better, they are healthier now, and you want the rest of
their experience financially to match that great clinical experience.
Anything we can do in the tools themselves to
be predictive, clear, beautiful, and simple will
make all the difference.
Gardner: I am afraid that we will have to leave
it there. You have been listening to a sponsored BriefingsDirect digital business
innovation podcast on the emergence of more data about costs across the health
provider marketplace.
And we have learned about the pluses and minuses of increased costs transparency in
the healthcare sector and ways to reduce the risk of out-of-context information that offers
little actionable insight into actual consumer costs and obligations.
So please join me now in thanking our guests, Heather Kawamoto, Chief Product Officer
at Recondo Technology in Denver; Joann Barnes-Lague, Revenue Cycle Director at
Shields Health Care Group in Quincy, Mass.; Julie Gerdeman, President at HealthPay24
in Mechanicsburg, Penn.; Beth Jones Sanborn, Managing Editor at Healthcare Finance
News/HIMSS Media in Portland, Maine, and Alena Harrison, Senior Director of PBM
Innovation at CVS Health in Woonsocket, RI.
And a big thanks to our audience for joining this HealthPay24-sponsored thought
leadership discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your
host and moderator. Thanks again for listening, and do come back next time.
Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HealthPay24.
Transcript of a discussion on how new transparency on costs in healthcare provides both a step
toward more educated choices as well as an opportunity to use technology to inform and instruct
throughout increasingly complex payer-provider-patient processes. Copyright Interarbor
Solutions, LLC, 2005-2019. All rights reserved.
You may also be interested in:
Anything we can do in the tools
themselves to be predictive,
clear, beautiful, and simple will
make all the difference.

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Price Transparency in Healthcare Requires Higher Accuracy and Technology Adoption to Regain Patient Trust

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Price Transparency in Healthcare Requires Higher Accuracy and Technology Adoption to Regain Patient Trust