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Patient Responsibility Estimation Takes the "Gasp" Out of Healthcare Pricing

The era of consumer-driven healthcare is in forward motion. Today, patients may be as inclined to ask their physicians “what’s this going to cost me?” as they are “what’s my prognosis?”

No question about it, recipients of care are increasingly being handed or are taking the reins and responsibility for portions of payment. Patients need to know potential costs and payment options to make informed decisions—as purchasers of healthcare services. In the simplest iteration, trips to the doctor need to work more like trips to the store; costs should be stated and payment alternatives clearly expressed to ensure those who receive care can most adeptly pay those who have rendered it.

There must be an answer to the question “what’s this going to cost me?,” and that answer begins with patient responsibility estimation.

Patient responsibility estimation is the responsive “supply” to the market’s “demand” for information. In this newly consumer-driven model, technologies and services are being developed to accommodate the shifting paradigm. Innovative tools and communication methods are equipping providers to be able to inform patients of anticipated expenditures and guide the payment process.

“A knowledgeable patient is an empowered consumer,” states Ed Caldwell, Senior Vice President of Provider Services and Sales for Emdeon. Emdeon, a leader in revenue cycle management solutions, has created an interactive, web-based estimator tool for use in provider settings. “In any purchasing decision, consumers deserve to know the scope of treatment and costs in order to make intelligent choices. Healthcare is an industry that has not traditionally delivered this level of transparency to its consumer until after the service has been rendered.”

Patient responsibility estimation is an essential solution for a population that’s grown up with—and an industry that evolved from—third-party payment systems involving high indemnity, managed care and co-payment scenarios. In the past, patients had little need to know cost details and participated only minimally in the adjudication process. With such distance between the consumer and payment (coupled with the innately complex, unpredictable nature of healthcare), patients have long deemed medical care to be exorbitant and exclusionary—so complicated and costly that the idea of being more deeply entrenched in the payment process is daunting if not totally overwhelming.

Patient responsibility estimation is helping to lower the veil, bringing patient-consumers in direct contact with the facts about their healthcare costs. In pre-encounter estimations, providers must thoroughly approximate procedures and calculate associated costs transparently. The summation of anticipated activity and expenses is output in retail-style estimates and bills that can be easily explained by providers’ frontline employees and understood by patients. Up-front pricing, even in speculative form, along with pre-determined payment options, are the keys to revolutionizing the evolution to a consumer-based healthcare system.

Of course, the healthcare industry’s reputation as costly and complicated is based on truisms. Any point of care—be the encounter small or involved—is no “trip to the store.” Each contact with a healthcare provider encompasses many layers of costs and adjudication. Thus, the ability to create fully accurate or unalterable estimates is rarely possible. Even still, estimating is immensely effective in giving ballpark costs, educating patients on the aspects of care and initiating discussion about payment alternatives. Though specifics may change throughout the encounter or episodes of care, patient-consumers are better informed and prepared for their financial responsibilities.

The benefits of patient responsibility estimation are far greater than just the enhancement of the retail-oriented process. When patients are knowledgeable about the costs and are prepared for payment, they make better choices and are more proactive about their own health. Uninformed patients may avoid seeking care, even if there’s notable need, simply out of fear of being unable to pay, and such avoidance could exacerbate medical problems and ultimately increase costs down the road.

Furthermore, informed patients are more likely to pay in total and to do so promptly. That’s good for the entire system, as providers must receive compensation in order to continue their services. To that end, providers are now coupling pre-encounter estimations with opportunities to pre-pay as well. This approach is proving very effective, as patients are often able to cover out-of-pocket costs up-front.

“Thorough estimates are the foundation of patient-friendly billing,” Caldwell summarizes. “For too many people, one of the most painful aspects of their care has nothing to do with their physical condition; it is the shock of unexpected costs that hurts the most. By setting the proper expectation prior to treatment, consumer estimates alleviate patients’ concerns around costs and make the entire system healthier and more efficient.”

Clearly, when patient-consumers have answers to the question of “what’s this going to cost me,” the prognosis for the entire health system is improved.

To find out more about patient responsibility estimation or see how Emdeon is simplifying the business of healthcare contact us today at 877.EMDEON.6 (877.363.3666) or visit us online.

In our Estimation: Tools for Patient Financial Responsibility Estimation

Electronic calculators: web-based estimating systems that compute anticipated patient out-of-pocket costs; often created to work in real-time; calculates totals in context of patients' health plan verifications and third-party coverage

Patient-friendly billing statements: retail-like invoices and follow-up documentation, created for ease of reading by patient-consumers

Frontline training/patient relations: advanced training to give frontline personnel skills and tactics to communicate financial responsibility and payment options at the point of access into the system; more consumer-focused methodology and counseling techniques