Left in the dark – three ways to stop the fear of affordability from preventing access to care
Years ago, my wife and I went to a show in New York. As we left the theater late that night, a pedicab came by. "Wouldn't that be fun?" she said. We weren't going far, and it was raining, so we hopped in.
When we got to our destination, the driver told me the ride cost $150. I thought, are you kidding me? Sure, I should have asked him how much the ride would cost before we got in. But I didn’t, and the driver had no incentive to tell me. I paid him, but I was mad—and I'll never get in another pedicab.
Pedicabs aren’t nearly as important as healthcare, but the healthcare system treats patients a lot like I was treated that night in New York. Getting sick or injured can feel like stepping out to a dark, rainy street. You’d love a ride to a warm, dry place; but if you don’t know the cost—and especially if you’ve been burned before—you are unlikely to seek help.
When consumers’ fear of the price of healthcare outstrips their fear of illness, they delay or skip care. So it’s not just affordability of healthcare that is a barrier to access—it’s also the fear of the unknown cost of that care.
A toxic cocktail of high deductible health plans, rising out-of-pocket costs, and surprise out-of-network bills has unnerved patients across the board. And with good reason: 66 percent of bankruptcies in the U.S. are due to medical expenses. No wonder 33 percent of Americans delayed or avoided medical care due to concerns about its cost in 2019. Meanwhile, Gallup reports that visits to emergency departments have climbed by 20 percent, an indicator that lower-cost routine care is being replaced by higher-cost emergency care. Today, one of the fastest growing categories of bad debt for hospitals is from people with commercial insurance—those who keep the health system precariously viable.
Big pharma is demonized for its pricing strategies, yet the retail pharmacy side of the business tackles the fear of those prices by allowing consumers to know what to expect at the register. Medications may not be cheap, but you can drop off a prescription, ask how much it will cost, get an answer, and then make a decision. Your pharmacist may even tell you about GoodRx and other ways to lower your out-of-pocket burden. One-third of U.S. adults may leave their prescriptions unfilled due to cost, but at least they know the cost. When fear is allayed with information, consumers can make informed purchase decisions.
It’s different on the health services side. There’s no one to ask and nowhere to go to learn the price you will pay before potentially risking financial disaster. As hospitals and health systems perpetuate byzantine, opaque billing systems, retail care is stepping into the void. Have you seen Walmart Health’s price list for primary, dental, and behavioral healthcare?
The affordability crisis in healthcare is real and won’t be resolved anytime soon. That shouldn’t stop us from trying to reduce people’s fear of the price of their care, which alone can increase access and lower costs.
Talk about it. Pick five hospital websites at random and try to find the price for various kinds of care. You won’t because it doesn't exist. So, the first step—one that is not complicated—is for health systems to talk about openly about the expected price of care. This is how health systems avoid inadvertently delivering this frightful story to their consumers: “We are hiding the price you will pay for care because it will be very bad news for you.” Note that merely posting a list of prices isn’t talking. Speak with your consumers, in plain English and with the compassion that aligns with your mission and values. This is a real conversation that needs to be held everywhere, from online to on the phone to face-to-face with scheduling staff and physician practice managers. Simply talking about the price of care will go a long way toward alleviating your customers’ fear of the unknown.
- Give consumers tools and resources to help them understand. Provide your consumers with simple, easy-to-use tech tools like estimate calculators so that people can figure out their likely out-of-pocket expenses. Equip your billing or scheduling staff with the education and resources to walk people through their coverage and expected out-of-pocket costs before they book surgery or other care. Then they can discuss available payment options with clarity and empathy. Does the unknown cost of developing an estimating tool or training staff alarm you? Welcome to your patients’ world. But unlike your patients, you can find out how much it will cost to build such a tool. If they are too expensive or difficult, consider a call-in option for consumers and physician office staff.
- Practice strategic pricing in a new way. Historically, “strategic pricing” has been code for maximizing payments from payors. While most organizations have gone through chargemaster optimization exercises that help keep the doors open, it’s time to look at pricing through a different lens, one of minimizing consumers’ financial fear and pain. Within the natural cycles of managed care contracting with each commercial payor, it is possible to shift dollars paid by consumers for retail-oriented services into areas less likely to generate out-of-pocket costs and where consumers may feel less impact. Much of the control of those cost assignments is with health plans and benefit plans, but hospitals can go to large employers and say, “We want to help protect your employees from high out-of-pocket costs. Here are some suggestions for designing a benefit plan as your next insurance cycle approaches, including preventive services that we’ll do on a zero out-of-pocket basis.” The process may require three or more years to reach 75 percent of your commercial volume, but over time will reduce both your consumers’ fear of price and their actual out-of-pocket burden.
Why is reducing fear your responsibility? The same question has been asked in terms of social determinants of health. Why should a hospital build housing for the homeless or run a food pantry? The answer is the same: Because if you don’t address it, the problem is still there, no one else is solving it, and it’s preventing people from getting the care they need.
So, at a certain point, it is your responsibility to consider the health of your consumers’ financial lives as well as their physical lives. Yes, putting your pricing in daylight risks blowback. Saying nothing may seem safer, but it feels downright dangerous for your consumers. Hospitals spend millions to advertising and marketing and cultivating physician networks to attract patients. Yet 45 percent of American still avoid your services—shrinking your potential market by nearly half—because they fear the unknown costs of your care. That’s an access problem we can solve together.