Robyn Jackson, COO of Entrust Inc., discusses price transparency in healthcare and what it means for ambulatory surgery centers.
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Q: What is the importance of price transparency in healthcare?
Robyn Jackson: Transparency of price and quality is of paramount importance to keeping the cost of healthcare under control. The consumer has the right to know their cost of care, and they want to know it. Providers that address this need will be in a better position to capture a greater segment of the market in the future.
Q: Are there any trends you're seeing toward large-scale price transparency or will it be more local market-driven?
RJ: Every state has transparency legislative bills in front of it. There is also legislation popping up at the federal level. It's not a question of "if," but "when" that legislation will go into effect. If we don't have a free market in healthcare, we will have a federally dominated healthcare system.
Q: How do ambulatory surgery centers fit into this trend of price transparency?
RJ: The ASCs are more flexible and more adaptable. They are also more willing to address the consumer and patient needs when compared with the big dominant hospital systems. The ambulatory surgical centers today are beginning to bundle their services and providing one price. They do not discriminate based on who is going to be paying that fee. Because they bundle payments, they are willing to give a cash option to the patient, which can apply if someone is insured, not insured or under insured.
Q: How will ASCs decide pricing for their treatment?
RJ: The normal business-trained person can figure out how to price things. Look at what kind of profit margin you want and make sure prices are reasonable and fair. It's not a complicated equation. The ASC's challenge is to run a business like a business. Some ASCs are perfectly situated to stop the oligopolies in healthcare like the non-profit hospitals and it's time for them to begin doing so.
Q: How will the new healthcare market evolve with more transparency?
RJ: If we had true price transparency in a free market for healthcare, the consumers would be able to shop for their healthcare just like they do with every other item in society today. They would be in a position to decide how they want to finance their care. There has been a bill in Texas stating that if the provider doesn't give patients a price in advance, they can't adversely impact the patient's credit.
Today, according to the Federal Reserve, more than half of all adverse credit ratings are the result of unpaid medical bills. According to the American Journal of Physicians, around 62 percent of all personal bankruptcies are a byproduct of unpaid medical bills and more than 30 million Americans have adverse credit ratings as a result of these unpaid medical bills.
ASCs understand this basic underlying principle.
Q: Are ambulatory surgery centers embracing a new level of transparency?
RJ: There are a few ASCs that excel at this. One of the most well-known is the Surgery Center of Oklahoma. Transparency trends in the future are going to include global and bundled pricing and alternatives for cash options. The challenge will be communicating the price differential when you have transparent pricing. However, patients, employers and third party administrators are interested in transparent plans because their employees are demanding it.
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