What’s the cost of the procedure? A common (and, frankly, reasonable) question from patients contemplating a surgery.
“It depends” is the honest and accurate answer — yet frustrating to provider and patient.
The reason for the ambiguity is that it’s all but impossible to tell a patient what his or her own cost will be.
Patients (again, reasonably) express frustration as to why there isn’t a set price for a given operational procedure. Why can I get a comprehensive estimate for something like a car repair, but not a hip transplant?
While a cost range or estimate can be provided regarding what the physician will bill for a specific service, we can at best make an educated guess about other surgery costs (hospital bill? anesthesiologist’s bill?) and follow-up costs (physical therapy? prescription drugs?). People, unlike cars, are not identical “under the hood,” and treatment does not work consistently between people or even at different times for the same person. An expected procedure may need to be changed and additional testing or procedures may be necessary.
This can be a good time to discuss value transparency. Because, like so many things in life, what can look like a “good deal” at the start can end up costing a patient more later on.
The costs of over-the-counter allergy medicines, for example, are transparent. Same with prescription drugs, and patients can choose between brand names and generics. These medications reliably have the same ingredients in the same quantities. Even so, the response to a given drug may differ greatly from one person to another, and a specific brand may or may not be covered by a given health plan.
For something more complex like a kidney transplant, value can (and probably should be) a larger patient concern. One surgeon may charge less to do the procedure – but it is scheduled at a more expensive hospital. A hospital may have lower costs – but worse outcomes. What’s more important to the patient: saving money or assuming higher risk? For example, is the patient willing to assume the risk of a 10 percent higher rejection rate in order to save $5,000?
Not to mention other key factors – particularly intricacies within a patient’s insurance coverage. A new report calculates that out-of-pocket healthcare costs in the U.S. increased 11 percent during 2017. The steady, years-long transfer of more financial responsibility from insurers to the insured continues with no end in sight.
Insured patients ultimately want to know what their out-of-pocket cost will be after their health plan makes its share of the payment. Yet it isn’t easy to ascertain that on the provider side because of the variability of coverage from plan to plan, and factors such as whether the patient has met a deductible. Such lack of certainty can, of course, lead to an even bigger, albeit understandable problem: the patient opts to delay or decline a necessary procedure.
Sometimes a patient just needs to know what questions to ask the insurer. For instance, the health plan may cover the diagnostic portion of the colonoscopy at 100 percent, but not treatment if polyps were uncovered during the screening. If you didn’t know about the limitations before the procedure, you will have a bit of a medical expense shock following.
For patients, part of the value equation is knowing how much they don’t know – and being able to rely on health care professionals to help them make correct choices.
Here’s an easy tip — let every patient prescribed a prescription drug know that they can shop around for the most competitive price. It might save them $5 or $50, which can add up quickly. They will repay you later with their loyalty. Be transparent about those things that are known for any visit, procedure or medication to help them have realistic expectations and be able to more intelligently evaluate options.
Meanwhile, the health care industry needs to broaden public awareness as to what drives health care costs and cost increases. Our industry must be a clear voice and should actively participate in crafting new care and payment models because, along with our patients, we also must live with the results.
We also have an obligation to work with patients frustrated by big bills they are about to incur and often won’t fully comprehend when they get them.
Always, an educated consumer will be the best customer. That means we can’t shy away from discussing cost uncertainties. It means we can and should put into context the importance of value.
Ted Matthews, MBA, CPA, CGMA, serves as Chief Financial Officer (CFO) for Austin Regional Clinic and Covenant Management Systems. As CFO, he has financial oversight and assists in strategic development for both organizations.