Some consumers are beginning to shop around for prices as they face higher deductibles and take on more responsibility for their healthcare costs. As a result, business is being diverted away from hospitals and toward retail clinics, standalone surgical centers and walk-up medical facilities that advertise their prices and services, according to a new report from PwC's Health Research Institute.
Here are four takeaways from the report.
1. When consumers shop around, they find wide price variation from one provider to the next. For instance, in New Hampshire, the average consumer looking for a chest CT scan could pay $2,701 at the hospital and $872 at the imaging center. In Maine, a wrist X-ray costs about $255 at one hospital, but only $52 at an imaging center.
2. Consumers are only starting to shop around for prices. In 2015, 30 percent of American adults had contacted different physicians and health systems about prices. Additionally, about 40 percent surveyed said they had asked ahead of time for the price of a prescription or procedure.
3. In response to consumers' shift from hospitals to standalone operations, some hospitals are looking for ways to incorporate clear pricing strategies into plans to compete for consumers, according to PwC. Altamonte Springs, Fla.-based Adventist Health System, for instance, conducted a market analysis on pricing, comparing its prices to others in the community, according to PwC. The firm said Adventist looked at its chargemaster to identify which services drove revenue for the organization and which prices could be cut. In the end, reducing key components of its chargemaster between 30 and 40 percent would result in reduced annual revenues between $50 million and $75 million, the health system discovered, according to PwC. Still, the firm said, Adventist stayed with the approach and plans to absorb those losses if only incrementally, and spread out over several years.
4. Amid growing consumerism, insurers are actively directing members to lower-cost providers, even offering financial rewards to enrollees seeking discounted treatments, according to PwC. In response, healthcare executives have launched programs to reduce charges for services such as imaging procedures. Most chief strategy and financial officers interviewed by PwC said they had adopted strategies common to the retail industry, including price quotes, simplified billing, consumer outreach, and money-back guarantees as ways to gain and maintain volume.
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