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Show me the money: Healthcare consumers seek price transparency

TRANSPARENCY BUILDS TRUST

Many providers still don’t offer the price transparency that 91 percent of healthcare consumers seek. Yet offering cost information upfront does not change most patients’ buying behaviors. Nearly half say they require the information for budget planning purposes. Only 11 percent use such information to shop around for a different provider.


Even so, younger consumers are significantly more likely to price shop than older generations. Furthermore, affordability runs a close second to budget planning as a driver of the quest to understand costs: a key consideration for both insured and uninsured health consumers.

By offering better financial education and support for all types of patients, providers could promote informed choices, encourage responsible budgeting, strengthen health consumer engagement and reinforce the patient/provider relationship, especially among younger demographics.


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Almost half of consumers say they require healthcare service price information to aid with budget planning.

Why is knowing your out-of-pocket price estimate important to you?


Half Require Healthcare Price Information Chart

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EDUCATE TO DIFFERENTIATE

Providing cost information up front and offering healthcare consumers financial education and support could be critical market differentiators for providers.


  • If patients know the costs of the medical service they seek, the majority (60 percent) choose to proceed via their provider. Most of the rest (23 percent) opt only to delay care, rather than cancelling it altogether or choosing a lower-cost provider.
  • Healthcare consumers reported more price shopping for routine services such as dental (40 percent) and vision (35 percent).
  • 61 percent of uninsured patients are concerned about affordability. But so too are nearly 40 percent of the insured.

However, Gen X and younger consumers are more than three times as likely to price shop as older generations (17 percent vs. 5 percent), a trend likely to intensify as younger consumers mature.

BE PROACTIVE

Although 49 percent of health consumers know their estimated out-of-pocket costs before seeing a medical professional, only about a quarter were informed by their providers. For the rest, the burden was on the patient to seek out the information on their own, potentially impacting the accuracy of cost estimates obtained.

As insured cost sharing grows, so do the numbers of underinsured patients, who require a different level of financial education and assistance and who are harder to detect without upfront communication.

Providers are plainly in the best position to give patients accurate upfront information about their out-of-pocket costs. Doing so proactively would strengthen health consumer engagement, especially among younger demographics and the price sensitive.

TRANSPARENCY PAYS

Giving patients the price transparency they want would not only strengthen health consumer engagement. For providers facing a looming collections crisis, it could also help avoid future financial headaches.

Nearly 40 percent of patients say they would pay medical bills in advance if they knew their costs, and generally a provider’s ability to collect patient responsibilities is much higher when price transparency and payments conversations occur upfront. By offering such financial education, advice and support, payers could improve payment adherence to plans that work for patients, and ultimately boost overall collections performance. Indeed, price transparency for patients could be good for providers too.

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