5 strong price-transparency lessons NRC Health says consumers can teach hospitals
Posted at beckershospitalreview.com
If other prices at the grocery store grew at the rate healthcare prices have since World War II, consumers would be paying $55 for a dozen eggs, $48 for a gallon of milk and $134 for a dozen oranges. That’s more than $10 per orange.
“Yet in healthcare, consumers have had no choice,” says Ryan Donohue, thought-leader in healthcare consumerism and consumerism solutions expert at NRC Health. If healthcare were like oranges, he adds, “We would just switch to a different fruit or try an entirely different diet. It’s not worth it.”
Here, Donohue provides five discerning lessons based on NRC Health’s Market Insights, the largest consumer database of its kind in the United States, analyzing sentiment from more than 300 national markets. NRC Health’s consumer insights help healthcare organizations optimize marketing strategies to serve patients better. Here are the top five lessons from their latest special study on price transparency.
Lesson 1: Engaging and building trust with patients begins with Human Understanding.
Donohue says consumers are the fastest-growing payers of healthcare services, and it’s time healthcare organizations began to look at the new research to understand better why they’re frustrated with pricing transparency. The co-author of Patient No Longer: Why Healthcare Must Deliver the Care Experience That Consumers Want and Expect reveals that healthcare organizations must humanize the element of price transparency and see that behind every bill is a patient, behind every patient is a person and behind every person is a story.
“As soon as we give up our clothes and put on that gown, it’s like we give up control,” Donohue says. “This psychology is so important to understand because there’s another anxiety-producing issue to address after what you’re being seen for, and that’s cost. It’s going to be essential that we engage the consumer better in the future, that we build a relationship with them as a patient, that we have a human-to-human connection with the people we serve.”
Lesson 2: Your modern customer’s needs and expectations are changing more quickly than you realize.
“Everyone is at a different part of their healthcare journey, so their own story is going to help influence this larger issue of price transparency,” Donohue says. As people resume regular activities post-pandemic, Donohue predicts they’re going to turn fresh eyes on healthcare.
NRC Health’s Market Insights study found that of all the industries where it’s crucial to know prices up front, healthcare is at the top of the list.
Among healthcare consumers:
- 97% want to know pricing for a test, exam, or screening in advance
- 97% want to know pricing for minor surgery in advance
- 91% want to know pricing for major surgery in advance
“Going in for an MRI to figure out if there’s something very wrong with you is different from going in to fix a cracked screen on your iPhone,” Donohue says. “For healthcare consumers, the stakes are so high. Consumers want to know, ‘Can you treat me like other industries do? Can you treat me better? Because I expect more, given the severity and seriousness of what you provide.’”
Lesson 3: Your customers think paying for healthcare is as distressing as buying a car—and your window to catch their attention and loyalty shrinks fast.
While there have been strides made in the automotive industry, every consumer goes into a car-buying situation without knowing the exact price they’ll pay. It’s gotten a bit easier, now that they can research and even haggle online. But today, consumers visit fewer dealerships before purchasing a car: only one and a half on average, down from five. The same consumer principle applies to choosing healthcare.
“Consumers have that feeling of, ‘I’m going to get taken or bamboozled,’” Donohue says. “They think, ‘Somebody who knows more than me is going to take advantage of my lack of knowledge or confidence as a consumer. All of those things also apply to healthcare. It’s not like you go into the grocery store and get sticker shock. It’s not like Amazon, where you can buy with one click and can see what other people have to say. The stakes are so much higher in healthcare.”
NRC Health’s Market Insights study reveals how fickle consumers are regarding price transparency:
- 75% of consumers would choose a provider who shares prices over one who doesn’t
- 66% of consumers believe price transparency is very important regarding where they go for future routine healthcare visits
- 49% of consumers would switch to a more affordable doctor—even if they knew little about them (and half of consumers feel the same way about their most familiar hospital!)
- 45% of consumers believe doctors/hospitals don’t want to share prices
- 41% of consumers believe doctors/hospitals are waiting for the competition to share prices first
Lesson 4: You need to prioritize the modernization of a simple, fluid, dynamic, user-friendly pricing tool on your website to allow consumers to search—and if you don’t provide one, someone else will.
The healthcare industry usually ranks technology as its top reason why it can’t overcome price transparency, even though it agrees with consumers conceptually that it should share prices. The industry also sees, as consumers do, that cost has an impact on where patients go. Given that for 70% of consumers, cost impacts where they go for healthcare and how they select care, it’s time for healthcare organizations to figure out the technology.
NRC Health’s Market Insights study reveals these top most-wanted features of a pricing tool:
- Consumers want to see their total cost, out-of-pocket cost, and cost covered by insurance
- Consumers want to compare out-of-pocket costs for different care options (e.g., urgent care vs. ER care)
- Consumers want to calculate out-of-pocket costs based on their insurance type
- Consumers want to contrast out-of-pocket costs for in-network and out-of-network providers
- Consumers want to review quality measures of providers
Lesson 5: If you want a competitive advantage in future-proofing your organization, start listening to your consumers and investing in technology to market yourself better with an effective pricing tool.
Three-fourths of all consumers surveyed said they would choose a provider who shares prices over one who doesn’t. “Consumers are saying, ‘Hey, I’m open for business here. If someone comes in and cracks the code and starts sharing prices with me, that will affect my decision to choose them instead,’” Donohue says. Another top factor influencing consumer decisions? Insurance acceptance.
“As people come out of COVID-19, they’re going to try and shop healthcare, because they shop in every other facet of their life,” Donohue says. “And what are they going to find? I’m afraid they’re going to find a pre-COVID world of very, very difficult prices.” With that in mind, Donohue advises healthcare organizations to start thinking in consumerist terms: “‘Okay, the shoppers are coming, how do we deal with this? How can we be receptive to this? How do we show them that the world is different, and that healthcare is coming around on price?’”
The Market Insights study reveals how elusive pricing is, and who’s searching most:
- 74% of consumers with a deductible of more than $3,000 search for pricing
- 68% of consumers plan to shop around for healthcare providers in the future
- Only 1 in 10 consumers feels it’s easy to find or compare prices in healthcare
Nearly 90 percent of consumers surveyed agreed that they would use a website that included hospital and doctor charges for common procedures. And there are a few organizations doing price transparency well—such as Indiana Hospital Association, St. Luke’s Price Checker in Bethlehem, PA, and Surgery Center of Oklahoma, which pioneered price transparency in 2009, developing software development kits for hospitals to purchase and use.
Ultimately, the ability to pivot and reach today’s consumers tomorrow lies in telling the truth. The future success of healthcare organizations relies on price transparency—and the faster we act now, the more we’ll be able to serve consumers in the future.