Hospital pricing transparency is another offshoot of the consumer movement that has already revolutionized how Americans shop.

The real differentiator between buying health care services and buying any other product has been the involvement of a third-party insurer that pays hospitals most of the cost of consumer health care services.

The advent of skinny health care insurance, higher deductibles, and front-end collection efforts by providers has caused many consumers to price-shop for diagnostic testing and laboratory services, two anchors of hospital retail strategy.

The feds mandate for hospitals to post what they accept as payment for 300 shoppable services on their websites is an attempt to reduce the overall cost of health care services by instilling greater competition (consumerism) among hospitals.

This creates an opportunity to enhance patient engagement strategies beyond posting a consumer-friendly pricing estimator tool on the website. It should include reconfiguring the chargemaster, refining pricing strategies, and optimizing the patient process itself.

Taking charge of the chargemaster to reduce widely inflated contractual allowances and charges will bring the ratio of costs-to-charges in-line once again. A strategic analysis of the chargemaster starts with determining the unique relationships among charges and payers.

Again, we drill-down to the cost of services on several different levels and use a consistent mark-up across service lines to reduce charges and contractual allowances while preserving the net revenue stream.

We also generate a fresh analysis of the hospital’s market since charges should be market-relevant to enhance the effectiveness of key revenue-drivers and the patient funnel.

Reconfiguring the chargemaster requires a pricing strategy that increases pricing transparency, delivers rational and defensible pricing, and right-sizes charges for the hospital’s market.

See what ‘Q’ can do for you!