Rick has over twelve years of experience providing audit and consultative services predominately to organizations in the health care industry. He has served a wide variety services for organizations ranging from large organizations with more than $12 billion in annual revenue to small, standalone entities with less than $1 million in annual revenue. Rick has served clients across the health care continuum including integrated health systems, physician groups, safety-net hospitals, health insurance clients, and other various health care related entities. Rick has experience in governmental, not for profit, and statutory accounting standards.
Pricing transparency is not a concept discussed in nearly any other industry, other than healthcare, because consumers of other industries have always demanded transparency. Now as high-deductible health plans have shifted the financial burden to the individual, healthcare is seeing a demand from their consumer (patient) for transparency. Consumers want to know before they select a service provider what their true out-of-pocket cost will be. However, out-of-pocket cost is only one of the various inputs consumers will use to decide what provider to visit; other critically important inputs are quality and convenience. Providers that can demonstrate a value proposition for all three inputs will likely gain market share at the expense of those who cannot.
Uncertainty from the consumer’s perspective.
To me, transparency helps. If a provider can tell a consumer “this is the cost of this service, this is your out of pocket price, and here are our quality scores,” a consumer can make a choice and calculate what they perceive the value of that service is. It may lead consumers to choose services that are considered a value option. For instance, take the airlines, some consumers chose to fly low-cost airlines because they do not value the benefits that traditional airlines provide. Could the same types of offerings come to healthcare? Some may argue they are already here, but does the consumer view it that way?
I believe healthcare has no choice other than to be fully price transparent. Consumers are demanding it. I believe the demand for transparency will intensify as Millennials and Generation Z continue to grow as a percentage of the healthcare consumer market. Millennials and Gen Z are accustomed to asking for what they want — and getting it.
Consumers benefit the most, but providers who provide the highest value — the best quality at the lowest cost with the highest level of convenience — will also benefit. Transparency will be very disruptive to providers that fail to adapt quickly or provide competitive value options.
Healthcare is routinely criticized for a lack of price transparency. This criticism seems to imply that price transparency would make healthcare better: better outcomes, lower prices, and overall better value. Is that true?
In the second of a two-part series, “Leading the Conversation: Does Price Transparency Matter?” will challenge this criticism and engage health leaders in uncovering the challenges to improving outcomes, lowering costs, and delivering value in a price-conscience world.