How price transparency in healthcare could be more effective

In this episode, Novant Health dives into the new 2021 price transparency rules and why healthcare billing is so complicated. Hear from Jesse Cureton, Novant Health executive vice president and chief consumer officer, and Melonie O'Connell, vice president of pricing strategy.

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Gina DiPietro:
Everyone talks about price transparency, but when a consumer wants that, what exactly does that mean? I'm Gina DiPietro with Industry Insights: a healthcare podcast presented by Novant Health. In this episode, we dive into what makes healthcare billing so complicated, explore the new pricing expectations in healthcare, and why those rules aren't as effective as they could be. For answers, we look to Jesse Cureton, executive vice president and chief consumer officer at Novant Health. You'll also hear from Melonie O'Connell, vice president of pricing strategy. Thank you for listening.

Jesse, I’m curious. How is Novant Health meeting consumer need for affordable care when and where they need it?

Jesse Cureton:
Novant Health exists to improve the health of communities, one person at a time. We’re tackling the challenge to provide access to higher-quality, more effective care at a lower cost with a unique, innovative approach that identifies, then meets, consumer expectations and needs. We empower physicians and nurses to be partners and decision-makers, not just service providers in this transformation. And we embrace disruptive innovations that have the potential to fundamentally change the nature of healthcare in the U.S.

Gina DiPietro:
Explain what took effect in January as it relates to price transparency in healthcare.

Melonie O’Connell:
Starting January 1, 2021, a new rule from the Centers for Medicare and Medicaid Services (CMS) requires all U.S. hospitals to offer patients access to a price estimator tool and a public list of prices for all procedures and services. The rule is intended to improve price transparency and increase access to pricing information for patients.

Gina DiPietro:
Everyone talks about price transparency. When a consumer wants that, what does that mean?

Melonie O’Connell:
What consumers really want to know is how much they will be expected to pay out of their own pocket. At a high level, this amount will vary based on a consumer’s insurance provider and where they are in their benefit year – so how much of their deductible or out of pocket maximum has been met.

Gina DiPietro:
Why is healthcare billing so complicated?

Melonie O’Connell:
Healthcare billing is built on decades of policy and regulation requirements to accurately account for all the resources used in providing care to a patient and ensure purchasers aren’t over or underpaying for care. Healthcare is also extremely personal, which adds a layer of complexity on to that policy and regulation. Each patient’s care is designed for the exact needs of that patient. And while we can, and do, provide estimates of how much that care should cost, there’s also a level of variability to it. There’s no way we can fully predict what care is necessary because no patient is the same. Our providers are specially trained to determine what a patient needs in the moment, which may or may not be reflected in a cost estimate a patient receives before the procedure.

Gina DiPietro:
It’s my understanding that Novant Health doesn’t believe this new rule is as effective as it could be. Can you explain why?

Melonie O’Connell:
While this rule is meant to make healthcare costs easier for patients to understand, some components of the rule actually make it more confusing. For example, the files required by CMS include negotiated rates with insurers for services, however, it does not provide the consumer information about their specific insurance coverage. The information isn’t valuable to the patient because it doesn’t take their insurance coverage, benefits and out of pocket costs into consideration. This may give patients a false sense of what their healthcare costs could be.

Gina DiPietro:
It sounds like providers can check the box on this rule by taking a wealth of information and posting it on their website in a spreadsheet. That’s a lot of information for people to comb through. What’s out there and how can it be overwhelming for people?

Melonie O’Connell:
That’s right. It’s a lot of data, and data that isn’t especially helpful for patients. If you used the file required by CMS to search for a common procedure, you’d find data that breaks it down by CPT code and charge by payor. But none of that information is what a patient will actually pay to receive care. There are so many factors involved, none of which are taken into consideration on this “price list.”

For example, a patient may search for knee replacement with Cigna insurance and find a few results. However, the search tool doesn’t take into account that patient’s specific Cigna benefits. Employers have their own benefit plans with insurance providers and those details aren’t reflected in this list. This list also doesn’t take into account where a patient is during their plan year, whether or not they’ve met their deductible, and what their out-of-pocket maximum is.

Gina DiPietro:
At a basic level, people just want to know how much something will cost. It’s my understanding that we tried to be a bit more helpful than the bare minimum of what was required. What did Novant Health do and why?

Melonie O’Connell:
We want to make sure our patients have access to information that is helpful and uniquely tailored to them. In keeping with the CMS rule change, we are providing easy access to the out of pocket costs of common procedures through an online price estimator tool on our website. This online price estimator tool provides a Real Time Eligibility check, which means it uses the patient’s member information to make a customized out of pocket price quote based on the member’s specific benefits at that point in time. This tool doesn’t require patients to comb through rows and rows of data. Our goal is to make receiving a price estimate for our services a simple and convenient process, so patients can make the most informed healthcare choices possible.

Gina DiPietro:
Where does Novant Health direct its patients to comparison shop and what is the organization doing to ensure patients have the tools they need to help them in that?

Melonie O’Connell:
Online price estimator- Our online price estimator tool is a simple, convenient way to find out-of-pocket facility prices for common procedures. Still, the price provided is only an estimate. It’s important to know that out-of-pocket costs may look different for each individual patient based on insurance coverage and other factors. This tool does not provide an estimate for physician and ancillary fees – like anesthesia.
Financial navigators- The best way for patients to understand the total out-of-pocket costs for care is to work with their insurer or speak with our financial navigator team. This expert team is on standby to support our patients and help them understand pricing estimates. Our financial navigators are often able to provide the patient a more robust view of the services they may need, helping patients understand what other services may go along with the care for which they’re looking to receive quote.
Our online price estimator tool is a great place to start, and our financial navigators can help patients think through the whole continuum of care and what services may be needed.

Gina DiPietro:
Do you view it as our responsibility as a healthcare organization to go beyond the federal requirements for price transparency?

Jesse Cureton:
In order to build trust with our patients and meet their needs, we have to do more. We’ve said for years that as our patients increasingly become savvy consumers of healthcare, they are looking for us, their healthcare provider, to meet their needs when and where they want it and at a price they can afford. We are constantly working to meet and exceed those needs by shaping new services and experiences that resonate most with our customers.

Think about it – our patients today expect a level of predictability and convenience from healthcare that they experience in other industries. My background is in banking where most people do their transactions online. By using consumer research, we know that our patients expect the same from healthcare. We clearly know what our patients want for price transparency. They expect the ability to access information when it’s convenient for them and that’s what we’re working to provide through our online price estimator tool. Melonie has already mentioned that healthcare billing is complicated. We may not ever be able to fully guarantee a price because of the way care is tailored for each unique patient. But we need to provide our patients an estimate so they can prepare for it. This level of predictability builds trust.

We consider it a privilege and a great responsibility to ensure that every patient has access to the care and information they need and deserve. We are actively working to design a human-centered patient experience and we look forward to engaging with our patients and their families in new ways around this important piece of their care journey.

Gina DiPietro:
What is your hope for the future of price transparency as it relates to healthcare? What would make this process more effective?

Melonie O’Connell:
I know I mentioned previously, but Healthcare is a complicated industry. It took many years for us to get to this point, and we know it will take many years to get to where we want to be. We’re actively working to make sure patients fully understand every aspect of their care so we can help them make the most informed healthcare choices possible.

Gina DiPietro:
Price transparency beyond the federal requirements is a way of meeting the consumer needs. Another way we do that is through affordability and accessibility– providing the right care, at the right location, at the right time. Can you explain Novant Health’s value-based care concept?

Melonie O’Connell:
For more than a decade, Novant Health has delivered innovative, value-based care, building on its commitment to meet the needs of patients and their families wherever they are in their health care journey at a price they can afford.

We have taken a multipronged approach to make health care more affordable and accessible while getting people well and keeping them healthy. From our perspective, a health care system where value is defined by quality, cost and patient experience more closely aligns with our mission to improve the health of our communities, one person at a time.

We participate in value-based care programs covering over 450,000 attributed lives with multiple payors. In one of those programs for over 80,000 members, including our own team members, we have demonstrated significant reductions in the cost of their care compared to the market – over $17 million in savings in a single year. Likewise, our Medicare Shared Saving Program (MSSP) accountable care organization has delivered top decile national performance on the cost per patient.

In addition to innovative, strategic value-based care programs, our providers are focused on helping patients be more proactive in their health care, whether online through MyChart with over 1 million patients, or connecting with people who are at higher risk of developing complications from chronic conditions. Some of these initiatives include:
Developing a dedicated diabetes service line with resources to provide nation-leading diabetes care in both primary and specialty care settings.

Offering an episodes of care benefit option for team members, including total joint replacement and maternity care. This option includes coordinated and clearly defined care paths with a single point of contact and a single bill with upfront cost information.
Partnering with TytoCare to provide virtual physical exams for team members and consumers in North Carolina. Patients have the ability to perform their own guided medical exams with a health care provider – all from the comfort of their home.

Offering Novant Health Care Connections, which offers interventions to manage health for a wide range of patients, from those who are healthy to those managing chronic conditions. Our Care Connections team handles millions of inbound and outbound calls a year, connecting with patients and coordinating referrals

Jesse Cureton:
I want to highlight what Melonie said again – that a health care system where value is defined by quality, cost and patient experience more closely aligns with our mission to improve the health of our communities, one person at a time. This dedication to quality and patient experience is for all of our patients, in all of the communities we serve. We have demonstrated a long-standing commitment to improving access to quality, affordable health care for communities that need it most.
We have been investing in community clinics, mobile health units and innovative wellness initiatives with the help of our community partners. This is to ensure vital access to primary and preventative care services are available where and when our communities need us.
Together, we are removing barriers to health care, closing health equity gaps and improving the overall health and wellness of all of our communities.

As we think about healthcare costs, I do think it’s important to highlight our financial assistance policy, which I’m proud to say is one of the most generous charity care policies for patients who come to us for care and are uninsured. If patients have an income that's 300% of the federal poverty level or lower, they get free care, regardless if they are seeing a primary care physician or specialist. This policy is a cornerstone of our culture and is an essential element in allowing us to provide remarkable healthcare to all members of our communities, regardless of their ability to pay. This program covers about 90 percent of all uninsured patients. For the other 10 percent who do not qualify because their incomes are above the guidelines, we offer a discount on their bill that is similar to a managed care contract discount, which means that patients in this category will not pay more than what an average insurance company may pay. We also offer no-interest payment plans for those who do not qualify for financial assistance and need the option of paying their outstanding balance over a period of time.

While healthcare is a complicated industry and billing is confusing, we at Novant Health work every day to offer solutions to our patients and to help them fully understand every aspect of their care so they can make the most informed healthcare choices possible.

Gina DiPietro:
Gina DiPietro again. Healthcare is a complicated industry and Novant Health is committed to helping patient's understand every aspect of their care - down to what they can expect to pay. Thank you for listening to this episode of Industry Insights. If you enjoyed this podcast, please take a moment to rate and review it, and subscribe to this and all the Novant Health podcasts. We post new episodes all the time and most are just 15 minutes.