 |
|
Perspectives on a selected key
topic
February /March 2021 |
 ow
that the Price Transparency Rule has been in effect since the
start of the year, and survived a D.C. Court of Appeals
challenge, what are your thoughts going forward: are there still
many hospitals dragging their feet? Is any meaningful
transparency occurring? Are there any stakeholders notably
capitalizing on the opportunity so far? Will the rule ultimately
have significant impact for stakeholders?”
|
David Wofford
Associate Principal
ECG Management Consultants
Ken
Steele
Principal
ECG Management Consultants |
|
ECG has been asking the same questions, and over the past
few weeks we’ve conducted research in many metropolitan
areas across the US to see how hospitals are responding to
the transparency rules. The new rules have only recently
gone into effect and some hospitals are still in
implementation mode, which may explain why we’re seeing a
mixed bag in terms of the information being made available.
Nonetheless, if a hospital hasn’t yet published all the
required information, we would not characterize it as
foot-dragging. It must be remembered that the requirement
could not have come at a more inopportune time given the
COVID crisis, and with very little response time at that.
Also, there is a lot of uncertainty regarding what the rule
actually requires and whether those requirements will change
under the new Biden administration. It also appears that
some organizations may be waiting to see what others are
doing before implementing their reporting strategy.
While the results are very preliminary, we do think that
transparency requirements will have a meaningful impact in
the industry. Already we are seeing that the press,
including some national publications, has taken notice of
this newly-available information and highlighted hospitals
that have particularly high prices. We are also seeing
interest among some hospitals in using this information to
help them gauge their prices relative to the market, both to
help them compete more effectively with other hospitals and
to inform their negotiations with payers.
In its
current form, the transparency rule leaves a bit to be
desired, but like so many CMS programs, it will likely be
refined over time. To the extent that the data becomes both
more reliable and comparable across facilities, it will
influence consumer behavior. We are particularly interested
in seeing the response to the transparency in coverage rule,
which applies to payers. We believe the payers are in a much
better position to provide consumers with actionable
information that allows comparison shopping across multiple
hospitals, which could be a real game-changer for the
industry.
|
Chris Sukenik
Principal
BDC Advisors
Kevin Sears
Director
BDC Advisors |
|
The Hospital Price Transparency rule has been in effect
since the beginning of 2021. Last year, there was much
discussion around the rate of hospital compliance with the
rule and the impact of releasing this information.
Early results are in. The majority of hospitals are
complying with at least one of two requirements for the
price transparency rule (consumer shoppable services data
and charge master-level data). A recent study of 1,000
hospital websites completed by Guidehouse found that 70% of
hospitals complied with at least one of the two
requirements. 25% of hospitals had posted both required
files, 60% posted the consumer shoppable services file and
48% completed the charge master-level disclosure.
Among hospitals that have not released their prices, common
explanations include the resource burden of this effort
amidst COVID-19 and concerns related to strategy and
competition. We expect hospital compliance to increase. The
remaining roughly 30% of hospitals that have not yet posted
will likely find themselves under increasing pressure to
comply.
With this marked increase in availability of
pricing data, we are observing a series of important
impacts:
Increasing Media Attention:
As expected, media stories focused on differences in
hospital pricing are starting to trickle out. A recent Wall
Street Journal article titled “How much does a C-Section
Cost? At One Hospital Anywhere From $6,241 to $69,584” gives
you a sense of the message. We expect many similar news
stories will be forthcoming.
Rising to
The Data Challenge: To set the stage, there is
a significant amount of information which has been released
in non-standard formats. The data files are large, health
system-specific and will require substantial time and effort
to extract all the insights they have to offer.
Intensifying Managed Care Negotiations:
Despite data realities, price transparency is
already impacting negotiations between health systems and
health plans. For a health plan, it is a relatively easy
exercise to analyze a health system’s charge master-level
file and compare how it is reimbursing the health system
compared to competing health plans (all of the data is in a
single file). Similarly, health systems are trying to do the
same but need to access and integrate multiple health system
data files to execute these comparisons.
Effects on Patient Decision Making: Many
health systems chose to comply with the shoppable service
requirement by offering a patient liability estimator which
allows patients the opportunity to price shop. However, we
expect the more significant impacts on patient decision
making will occur once the health plan disclosures required
by the Transparency in Coverage rule start to take effect
next year and health plan pricing tools are coupled with
patient incentive payments for choosing high value
providers.
Expanding Focus on Strategic
Pricing Efforts: Health systems and health
plans are increasingly motivated to develop new pricing
strategies. Motivation is not hard to find--hospital
disclosures are now required, managed care negotiations are
intensifying and health plan disclosures are set to take
effect starting next year (and escalating in subsequent
years). Many organizations are deciding that the best time
to develop their pricing strategy for an increasingly
transparent market is now.
|
|
MCOL - The healthcare
business digital media company
www.mcol.com
|
|
MCOL respects your privacy.
Please read our online
Privacy Policy. |
|
|
|
