- In 2019, CMS mandated all hospitals in the US to publish a list of their standard charges online. The federal agency intends for healthcare price transparency to empower patients to make more cost-conscious decisions when it comes to their hospital care.
Spending on hospital care is slated to grow by an average of 5.6 percent each year until 2027, outpacing the growth of physician and clinical service expenditures at 5.4 percent, CMS actuaries recently predicted.
Hospitals are one of the most expensive settings for medical care, and that is why CMS is starting with hospitals to advance healthcare price transparency and patient empowerment.
But why limit healthcare price transparency to hospitals, asked Scott Glennie, MHPA, CPA, CGMA, CMPE, the CEO of an independent gastroenterology practice in the state of Washington.
While his practice, Spokane Digestive Disease Center, is not required to comply with the new hospital rule from CMS, Glennie started to think about how healthcare price transparency could help his practice compete with local hospitals that had to comply.
In Spokane, Washington, there are two larger health systems that dominate the healthcare market. Then, there are a number of community-based groups, like Spokane Digestive Disease Center.
The community-based groups and practices compete with larger health systems for certain services, especially as hospitals invest in outpatient departments.
In 2017, hospital and health system leaders cited outpatient growth as their top priority. A year later, a separate analysis showed that hospital outpatient volume grew by 2.4 percent and gross revenue per case rose by 7.1 percent.
Hospital-based outpatient departments are revenue generators because hospitals get paid a higher rate for delivering the same services that could have been performed in a physician’s office.
However, patient costs for outpatient services is increasing as of late. The average cost of an outpatient visit is now nearly $500, the Institute for Health Metrics and Evaluation (IHME) at the University of Washington recently found.
Practice leaders like Glennie understand that their providers can deliver the same services as hospital outpatient departments at much lower costs. In fact, a recent study conducted by Avalere Health revealed that Medicare spending on common cardiology, orthopedic, and gastroenterology services increased by $3.1 billion between 2012 and 2015 because of the growing number of hospital-employed physicians.
“I knew that there was that difference between ambulatory surgery facilities and the hospital outpatient department, but without having claims data transparency it was hard for others to see,” Glennie recently told RevCycleIntelligence.com.
“Without that, the only way I knew what the hospital fees were was if our patient went to the hospital. We probably do between five and seven percent of our cases in the hospital outpatient department because of the patient's comorbidities and risk factors. So, occasionally we would see EOPs [explanations of payment], but that information was not readily available.”
But the new price transparency requirement is making hospital prices readily available. And state-run efforts are allowing practices to join in on the efforts.
While researching the new CMS rule, Glennie came across Washington’s HealthCareCompare website. The website is a consumer-facing tool that links to the state’s all-payer claims database, so consumers can research the prices of specific services in their area and compare prices.
Glennie pointed out that consumers have trouble accessing accurate price information. Standard costs and chargemaster prices do not account for contractual discounts by payer.
But through the HealthCareCompare website, consumers can access claims data to determine what procedures and services actually cost payers at local provider organizations.
“Now we can see accurate costs because the website uses paid claims data,” Glennie elaborated. “It's what the patient or their health plan paid, and it's public. That's powerful because people are looking for ways to save money and they're frustrated because it's difficult to shop for healthcare.”
To ensure patients at Spokane Digestive Disease Center access the meaningful pricing information, Glennie decided to link to the state’s website on the practice’s own page.
“I spoke with the financial management committee that represents the State of Washington,” he said. “The state outsourced this project after the all-payer claims database legislation was passed. They gave a grant to Oregon Health Sciences University. So, I spoke with the PhD there that runs the program, and he gave me the authorization to link directly to their site.”
The link on Spokane Digestive Disease Center’s homepage goes directly to the results of a query for a colonoscopy performed by the practice’s providers. The links also bring consumers to the practice’s pricing for other common services.
“What we did was input our procedures and our zip codes and then we did a query,” he explained. “We saved that link, so when people go to our website, on the home page, there's a button that you can press that says compare costs. It takes you to a separate page and there are three buttons that link directly to the website. But the query has been done for them.”
Glennie intends for the convenient links to the state’s website to help steer patients to lower-cost providers when the setting is more appropriate for their condition.
“They will see that an ambulatory surgery facility has a different fee schedule than outpatient hospital department, and those fee schedules differ by about two and a half times,” he stated.
Once consumers choose to have their service performed at Spokane Digestive Disease Center, the practice sends a financial letter to the patients detailing their insurance benefits and coverage, so patients understand what their expected out-of-pocket costs will be beforehand.
Glennie is also taking healthcare transparency a step further by giving patients more access to quality information.
For patients to be able to shop for healthcare, they not only need access to pricing information, but also quality information. Giving patients comprehensive data on provider cost and quality can help patients chose the highest value care for their dollar.
To help the practice’s patients, Glennie started to show quality information alongside pricing links on the practice’s website. For example, consumers can see the practice’s adenoma detection rate on the “Access, Quality, and Cost” webpage, which Glennie described as the “gold standard measure” of colonoscopy screening exams.
The practice started posting quality information using data from the Merit-Based Incentive Payment System, a mandatory Medicare value-based reimbursement program that already requires providers to gather and report on quality data.
Since giving patients more access to cost and quality data, the practice has noticed patients becoming more engaged and knowledgeable about their care. And Glennie intends to leverage the power of consumerism to set Spokane Digestive Disease Center apart from their competitors.
“My job is to carry us forward and compete on quality, cost, access, and service,” he stated. “That's why it's exciting. We can look at cost for the first time and know that that can be shared with patients. Patients are paying much more out-of-pocket now and the prices vary significantly, so it pays to shop.”