Guest Column: Dr. Christopher Raffo, Maryland Orthopedic Specialists
As an organization, we banded together with one common mission: To be the national leader in delivering the highest quality and most compassionate orthopaedic care through the private practice model.
We know that “quality” speaks to the entire patient experience, not simply the medical care received. In recent months, our group has focused on implementing initiatives to identify, measure and improve our service at every patient touchpoint. This is critically important for CAO and can set us apart as healthcare continues to evolve into a consumer-oriented field.
Becoming a price-transparent organization is a logical step for The Centers. Here’s why it would benefit all of us:
- Consumers love it. Consumers already evaluate price and quality in everything they buy, from groceries to vacation rentals to college tuition. Consider what companies like Amazon have done to the retail industry. Why would healthcare be an exception?
Price has become especially important to our patients as they sign onto plans with high deductibles, shouldering the majority of costs alone. Research released last year from TransUnion found that 80 percent said price transparency was a factor they evaluated when choosing medical professionals – right up there with bedside manner. We want new patients to choose us.
- Patients are more likely to pay their bills on time. The TransUnion study found that a vast majority – 79 percent – said they would be more likely to pay bills on time if they had a price estimate first. And there’s more: 55 percent say they are sometimes or always confused by medical bills, and 61 percent are surprised by out-of-pocket costs. Having the cost estimate in advance allows them to address questions and save for the costs upfront, instead of after the procedure.
- We can increase market share and drive business. As an organization, we know that our contracts with payors are lower than those of the health systems we compete against. We need to leverage that fact and use it to our advantage by directly advertising it to our patients and to employers with self-funded insurance plans. It gives us an opportunity that we have not even started to explore. If we can actively demonstrate that we offer the highest quality care at a more affordable price, we can enter into exclusive contract with businesses for all the orthopaedic care needed by their employees. Providing affordable care is one of the reasons we are so dedicated to the private-practice model. In the price transparency game, we can win.
As we prepare for the inevitable transition to bundled payment models, we will be collecting price data in order to tell an insurance company exactly how much it costs for a rotator cuff repair, ACL surgery or knee replacement. We need to further leverage this data as a strategic advantage.
Implementing transparent pricing will require carful forethought. It is not clear that publishing the entire fee schedule would have any benefit. But providing estimates for the most common procedures – such as ACL construction, total joint replacements or even an episode of garden variety back pain – and incorporating the costs of imaging, physical therapy, etc., would give our patients a more accurate understanding of the cost implications for the entire episode of care.
Finally, to prepare for price transparency, we need a fee schedule makeover. Nearly all of our transactions occur within the framework of an insurance contract. Despite charging 300 percent of the Medicare fee schedule, we almost never see that level of reimbursement. It would be far better for our public image to charge a “reasonable” price – slightly above our highest negotiated reimbursement for each CPT code. It is bad for our public image for our charges to be so high and would be disastrous in a price transparent setting. Under this type of model, we still capture all the possible fees while conveying the most accurate pricing possible to our patients.
It’s time to start using our size to our advantage. I believe we have only scratched the surface of the strategic benefits an organization like The Centers for Advanced Orthopedics creates. We need to start being proactive so that the changes in healthcare are beneficial and not detrimental to us. While this is not an overnight process, I propose that we all begin thinking about the role of price transparency within CAO more seriously.