We can budget for groceries ─ why can’t we budget for health care costs?

Estimated read time: 3 minutes

Key takeaways

• Patients need access to prices in advance to make informed decisions and find low-cost, high-quality care.

• Cerner offers integration with tools that provide price transparency capabilities. One such tool through Experian offers web-based price transparency to let users quickly and accurately estimate their health care costs.

• Providers following the principles of the HFMA patient-friendly billing initiative can offer financial counseling to patients to help them understand their payment options.

• Choice, competition and transparency will only make the health care experience better.

When we go shopping for groceries, order a cup of coffee or request a ride using our smartphone, it’s easy to see how much something costs and to make an informed purchase. So, why don’t we know how much our health care will cost when we schedule a visit or a procedure?

U.S. health care spending is projected to grow at an average of 5.7% from 2020 to 2027, up from 4.8% in 2019. By 2027, it’s estimated that the country’s health care costs will be almost $6 trillion. A survey of nearly 700 people, each with at least $35,000 in household income, found that more than half of respondents are concerned about their ability to pay a medical bill of less than $1,000 and 35% were concerned about paying a medical bill under $500. The bottom line: Patients need to know the price in advance to make informed decisions and find low-cost, high-quality care.

Earlier this year, President Donald Trump issued an executive order aimed to “enhance the ability of patients to choose the health care that is best for them.” The order supports the development of price and quality transparency initiatives and a proposed database of “shoppable services.” Centers for Medicare and Medicaid has backed the executive order with a proposed rule on price transparency requirements that call for hospitals to make pricing information publicly available. While these changes are meant to increase transparency and improve health care affordability, patients would have to search through an overwhelming volume of services, then search for the rate that was negotiated with the health care payor.

Patient-friendly systems that provide accurate estimates of out-of-pocket expenses can provide consumers some relief from this burden. Cerner partners with vendors that can provide this capability to health systems, with integration into the core Revenue Cycle workflows. Experian offers a web-based pricing transparency tool that lets users quickly and accurately calculate cost estimates. The estimate is based on the price information in the facility's chargemaster, payer contracted rates, patient claims history and eligibility/benefits information. 

Resources such as the Healthcare Financial Management Association’s (HFMA) patient-friendly billing initiative help guide providers on predictive payment systems. These systems help patients understand what their out-of-pocket costs will be for their health care payor. They consider variables such as the amount of a patient’s insurance, current deductibles, copayments and out-of-pocket payment limits.

To make it as easy as possible for patients to access these predictive payment systems, many health care providers have established customer service units as a part of their patient access departments. These units collect information on the clinical service being rendered and then combine it with the patient’s most current insurance information. This gives the patient a timely and accurate estimate of what they’ll have to pay.

Health care providers following the principles of the HFMA patient-friendly billing initiative can provide financial counseling to patients to help them understand their options. Additionally, providers can help patients get extended plans that allow more time to pay for health care services. Hospital financial counselors can also determine if patients qualify for financial assistance.

We shouldn’t have more choice, competition and transparency when shopping for groceries than we do when shopping for health care. While there’s more work to do, patient-friendly tools and resources that provide accurate payment estimates are the right next step for improving the health care experience.