Pricing Transparency for Hospitals
Pricing transparency means different things for hospitals and patients.
Since 1st January 2021, hospitals have been required to provide clear and accessible pricing for their services.
This gives patients visibility into different prices so they can shop for elective procedures. Examples include x-rays and knee replacements.
Like Amazon, they can search for prices and patient reviews. This allows them to make better decisions about which hospital they choose.
For hospitals, price transparency is a little more challenging.
The directive means prices must be clearly visible on hospital websites.
While this mandate is in place, it represents a challenge because their pricing model is available for competitors and payers to see it.
I say it’s the opposite.
I say use it as a competitive advantage.
Hospitals can approach price transparency as a competitive advantage to optimize costs.
One overlooked benefit is that hospitals will have access to their competitors’ prices.
Knowing what a nearby hospital is charging can help your organization evaluate where you are over or undercharging.
Adjustments can be made to create more competitive or more profitable prices. This in turn generates more revenue.
In a price transparent marketplace, the hospital with the greatest cost optimization or effective cost reduction can win.
I believe it’s an opportunity to use this regulation to implement a cost advantage.
Adopting this approach means your hospital can attract more patients and increase your elective procedures.
Price transparency encourage competition, innovation, and value – while reducing costs.
The first step is to determine the best pricing for every service made public.
Best pricing does not mean the lowest pricing.
It means analyzing historical data, current trends, gross charges, and negotiated charges with specific payers.
VIE Healthcare®, works with hospitals to take advantage of price transparency.
Reach out at lmiller@spendmend.com to discuss your cost savings goals. Find out how we can support and accelerate cost savings opportunities in your organization.
