ASCs tend to execute price transparency to attract medical tourists, compete with hospitals for health savings account patients and become attractive to payers with lower rates. This process of price transparency lays it all out on a surgery center's website, citing all inclusive costs, implant costs, surgery center fees and any overnight stay fees.
"Our patients are enjoying the fact that they know the total cost of surgery and they only have to write one check," says Gabby White, RN, of Newport Beach, Calif.-based Orthopedic Surgery Center of Orange County, a direct subsidiary of Irvine, Calif.-based Hoag Orthopedic Institute. The Orthopedic Surgery Center of Orange County is a frontrunner in price transparency, listing all-inclusive prices for 54 procedures.
Ms. White's surgery center labels this cash transparent pricing as "global" pricing on its website. This term is synonymous with bundled pricing.
ASCs are poised for a head start in executing price transparency, as they know their real costs.
Employing price transparency
Price transparency relies on accuracy, so ASCs should start the process small.
"Choose procedures that are fairly predictable, with not a lot of variation of time in the OR, supplies or implants used," says Ms. White.
Before publishing an all-inclusive cost for an open rotator cuff repair on an ASC's website, for example, administrators must know the actual true costs of the procedure. Once the price is on the website for patients to see, recoiling from the cited price later isn't an option — the ASC will sever the trust with patients.
"You'll lose the whole program," says Ms. White. Some procedures have unpredictable prices, however. In those cases, surgery centers can list a "starting price" or an "average price" and discuss the potential for price increases on an individual patient basis.
To avoid this faux-pas, look at the specific procedure's costs as a whole instead of following a typical insurance-payment process of breaking costs down by individual CPT codes.
The next step involves persuading the center's physicians to get on board, and provide accurate rates for the specific procedures. Then, apply a margin for wiggle room in case an atypical event arises in a particular case. This final rate is the "global" cash or bundled rate for the procedure.
Ms. White warns about physicians using an additional implant during the procedure or some other extra cost that will hike up the procedure rate. An ASC's administrative office and operating room must be in clear, open communication to execute price transparency.
"It's a change for everybody. There has to be a very trusting professional relationship," says Ms. White. She recommends implementing price transparency gradually rather than all at once.
Dealing with payer complications
An ASC's "global" cash rates may raise payers' suspicions about true costs of procedures.
Since Ms. White's surgery center estimates the cost of a procedure as a whole instead of nickel-and-diming every CPT code, some of the "global" cash rates may be less than the commercial reimbursement rates.
"Payers may see that result and say, why are you charging less for the procedures than what we pay you?" explains Ms. White. However, because the prices listed represent all-inclusive rates, payers do not know who receives what amount of money.
Some patients who opted for the "global" cash rate may attempt to pay with insurance. This presents a problem, as the ASC cannot accept insurance for a procedure at the bundled price outside of the insurance company's contracted rates. Overemphasize the conditions of using the "global" transparent rate to the patient, pre-surgery.
Striding ahead with transparency
Price transparency provides an ASC with predictable pricing that eases financial disagreements for both the surgery center and patients. "Patients know upfront what they're getting."
It may prove challenging for hospitals to put all the rates into one pot, as all entities want to know who's paying the money. Surgery centers have "a lot more trust between the surgery center and doctor's office," says Ms. White.
Ms. White sees price transparency as a tool for surgery centers to advance value-drive care.
"I think it gives you a competitive edge in your community, because the community knows you're putting your prices out there," says Ms. White. "They see that as a trustworthy move, putting yourself behind your work and the prices you're offering."
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