In this article, we’ll explore patient cost transparency in healthcare, the rise of transparency guidelines, how patient cost estimates can increase revenue, and how estimates reduce patient A/R days.
A patient cost estimate is an estimated dollar amount for patient care costs from a healthcare insurance provider or a health care provider. Estimates can usually be found through a health care provider before services are rendered or using an online resource such as a state mandated website or insurance provider’s website.
Knowing how much of a claim will be covered by insurance is a difficult feat, especially for health care providers. But the truth is that most patients (83%) want to see accurate information on out-of-pocket costs before having health care services and 25% have avoided obtaining care due to lack of cost information, according to the 2021 Annual Consumer Sentiment Benchmark.
In an effort to offer patients more insights into pricing for all types of healthcare services, a transparency executive order was issued by President Trump in 2019, And although the Biden administration has focused significant efforts into rolling back Trump-era policies, healthcare transparency mandates don't appear to be going anywhere. In fact, the first phase of the mandates is set to take effect in January 2022.
You can dig further into this topic with our free ebook, the Patient Costs Playbook.
Christopher Holt, Director of Health Care Policy at the American Action Forum, (along with Ashley Brooks) wrote that advocates of these healthcare transparency rules believe “they will empower patients and drive down health care costs by increasing competition and exposing profiteering.”
They continued, “Critics contend that transparency will do little to aid patients already constrained by insurer networks and will encourage consolidation.”
The American Journal of Roentgenology found that “some physicians worry that if they disclose prices, patients will focus preferentially on price (instead of quality) and turn into price shoppers.”
However, research found that “most patients do not regard communications about price as an avenue for reducing health care spending.” For example, take a study of patients requiring elective plastic surgery. Patients who were aware of prices were 41% more likely to schedule a procedure than patients who were unaware of prices.
No matter which side you fall on, critic or advocate, the fact of the matter is that every insurance provider and health care provider will be expected to take part in offering cost transparency.
Cost transparency is also becoming increasingly expected by patients, though many patients don’t feel they have access to the information they need. A recent study showed that 89% of uninsured patients were able to obtain out-of-pocket price information when scheduling an appointment with a primary care provider; 62% of patients with employer-sponsored insurance; and 47% of those with marketplace plans were able to obtain that information.
Many providers don’t have good software tools to provide estimates to patients in an easy, streamlined manner. Christine Clingman, Director of Revenue Cycle at Northwest Orthopaedics Specialists, said they used to use an Excel spreadsheet for their estimates before using Rivet. “It was not as reader friendly for the patient,” she said. “The spreadsheet had many info boxes that the patient didn’t understand or need to know.”
Though many patients can’t always get cost information from their provider before an appointment, many health plans already offer a price estimation or online comparison tool, especially since the federal transparency initiative was set into motion. However, research shows a general lack of awareness that this information is available. Many people (38%) don’t know if their health plan even offers transparency tools.
General knowledge of patient resources can be disseminated to patients, but each practice would have to take initiative to make it happen. A better, more sustainable option to provide patients cost transparency is actually offering up-front cost estimates because it comes with additional financial benefits for your practice.
You can start collecting full or partial payment from patients before an upcoming procedure or appointment. With software such as Rivet, you can quickly create patient cost estimates, collect payment through PHI compliant text messages or email, and even remind patients who haven’t yet paid. This guarantees your payment, increasing your revenue quickly with Rivet’s same-day billing.
You can estimate patient responsibility for patients with multiple levels of coverage in Rivet. Moreover, you can create a single comprehensive estimate for patients who will see multiple providers; have multiple visits; or receive care comprising professional, technical and/or ASC services.
For more information about the Rivet's modern product suite, schedule a Rivet demo.