Price transparency in healthcare
Understand consumer behavior and market dynamics
Understand consumer behavior and market dynamics
Price transparency in healthcare is about making consumers feel more prepared, involved and informed. Although some healthcare providers have already been sending pricing estimates proactively to patients prior to the day of service, the healthcare system needs to remember that healthcare is not like other goods. It is more expensive, confusing and personal. To truly empower consumers, payers and healthcare providers must provide more than simply the right data and information about healthcare costs. They must also provide the right types of additional support. That’s why the industry is moving away from self-service healthcare price transparency tools and toward making delivery of pricing information more personal. Consumer-friendly educational and financial resources can help patients and consumers make truly informed health decisions for shoppable services.
In the end, pairing the “high-tech” of pricing tools with this new “high-touch” approach can help patients better understand the importance of getting the right care at the right cost.
In 2019, the U.S. government issued an executive order mandating price transparency in healthcare aimed at lowering costs and reducing consumer confusion about out-of-pocket expenses and medical billing. The rule was directed at healthcare providers, health plans and self-insured employers with policies designed to:
The rule aims to address very real issues (Link resides outside IBM). More than half of U.S. consumers – 50% of who are college educated – don’t understand the healthcare system well enough to effectively navigate their healthcare benefit choices and services utilization. The inability of consumers to effectively research and compare healthcare costs and quality is a barrier to achieving high health literacy, and ultimately, lowering costs.
IBM Watson Health offers solutions and services for payers and healthcare providers that can help turn the new mandate for price transparency in healthcare into an opportunity for growth.
Our offerings are rooted in data-driven insights derived from consumer behavior and market research – as well as industry expertise. These insights can help healthcare organizations remove obstacles, optimize efforts and support go-to-market strategies. Most importantly, they are designed to put the needs of the consumer first.
The role of technology in helping realize the full promise of price transparency in healthcare cannot be understated. For example, interoperability and secure flow of information between healthcare providers and payers will be critical so when a patient “shops” for services, the healthcare provider they select has access to the medical records necessary to deliver care.
Consumer-friendly tools that make data actionable will also be important. Technology can play an important role in helping consumers understand pricing and schedule the right bundle of services as advised by their physicians, so they get the care they want at the location of their choosing. In addition, tools such as healthcare cost estimators can ensure healthcare providers and patients have access to the same pricing information as they partner in navigating the healthcare system.
Healthcare consumers want timely, accurate and trusted information to make important healthcare decisions. Payers and health plans can play a critical role by making comparative cost and quality information available to their members — even without large market share or spending the time and resources to build a price transparency solution on their own.
Healthcare organizations should be aware of how consumers might respond to potential cost savings. That’s why insights into consumer behavior are critical to informing any successful strategy related to price transparency. Understanding consumer knowledge, attitudes and behaviors can help organizations design more effective pricing strategies, and potentially become first movers in their markets.
In addition to understanding general consumer behavior, knowing dynamics specific to your local market can help produce a winning strategy under price transparency. Competitive intelligence on pricing and accessibility of services, as well insights into internal costs, can help healthcare organizations understand which shoppable services are best to offer in their geographic region.
Know local market dynamics
Solutions and services from Watson Health can help payers and providers successfully engage consumers — turning the new mandate for price transparency in healthcare into an opportunity for financial growth. Apply IBM’s deep insights into consumer behavior and local markets to help formulate a strategy that puts you ahead of the competition.