Price transparency: Why hospitals must zero in on patients' out-of-pocket costs

Hospital administrators must do a better job of providing specific costs to patients if they want their organizations to remain competitive in the healthcare marketplace, according to Becker's Hospital Review.

Cost is particularly an important factor as many patients grapple with higher out-of-pocket costs for their care. But there are few devices available for them to inform patients on what they have to pay for services. Many patients are defined as being "underinsured," making it more likely for them to have difficulty paying bills, particularly if they are not told of their costs in advance. As a result, some patients pass on needed healthcare services.

"The gross (charge) gets adjusted to a contract or negotiated fee that can often be half the price. Looking at the price of a knee surgery for $10,000 at the hospital vs. $6,500 at an outpatient surgery center would be more comparable if the consumer could understand what the out-of-pocket costs would be for each," Kelly Arduino, a partner in the healthcare practice of Wipfli, an accounting firm, told the publication.

Edward-Elmhurst Healthcare in Illinois has taken on the role of financial counselor with staff calculating every patient's out-of-pocket costs prior to delivering care. But that may also not be enough. Providers will also have to determine whether the care they provide is of high value, according to the article This can also be used to better leverage contracts with payers.

To learn more:
- read the Becker's Hospital Review article