2 health system revenue cycle leaders talk price estimates: 'There's no reason healthcare can't be Amazon'

Hospitals are increasingly making efforts to provide price estimates.

But these efforts can be difficult for organizations. A recent Medical Group Management Association survey revealed only 69 percent of hospitals could provide an estimate upon request compared to 79 percent of ambulatory organization respondents.

Several factors, such as the patient's health benefits and deductible amounts as well as provider contracts with payers, must be considered when providing estimates. These factors can be difficult to estimate prospectively, notes Timothy Reiner, senior vice president of revenue management for Altamonte Springs, Fla.-based Adventist Health System. But he says there are technology tools that attempt to help, and his organization uses these to determine eligibility for the patient and to provide an estimate upon request.

Adventist Health System

Currently, AHS patients must contact the call center or fill out a web form to obtain the estimate if the service has not yet been scheduled. The turnaround time is within 24 hours.

For patients who do have a service scheduled, the system proactively provides estimates and tries to collect payment prior to service. Overall, AHS provides more than 70,000 estimates a month to patients, and strives to get these estimates to patients three or four days prior to their scheduled service.

Mr. Reiner says the system's estimates are within a 10 percent margin or error. If the system undershoots the estimate by 10 percent, the patient is billed for the remaining balance. If the system overshoots the estimate by 10 percent, the patient is issued a refund.

Moving forward, AHS plans to make more efforts to streamline estimates. For instance, the system is partnering with a third-party to launch a self-service estimator, which will be open to the public. After plugging their insurance information into the tool, patients will receive an estimate, says Mr. Reiner. It will take into account the patient's benefits as well as the system's contract with that payer. Mr. Reiner projects all AHS facilities will have a self-service shopping option for patients by the end of the first quarter of next year. The goal, according to AHS, is "to make this process easier and more user-friendly" for consumers.

"We get thousands and thousands of page views to our estimate sites at our facilities, facility-led pages where people can request an estimate. But once get they are there, they don't want to type in information. So we're hoping by exposing a self-service page they'll go ahead and give us that information so they can get an interactive estimate right then and there," says Mr. Reiner.

Northern Arizona Healthcare

Northern Arizona Healthcare, with primary locations in Flagstaff, Cottonwood, Camp Verde, and Sedona, provides average estimates to patients, which are based more on a guess than science. Generally, patients must request these. Once they do, NAH is able to get the estimate within minutes.

As far as accuracy, that depends on the patient's insurance coverage, according to Ryan O'Hara, the system's chief revenue officer.

"If you have a mainstream benefits plan and let's say for us it's one of our top five [in-network] commercial plans, it's probably not going to be too far off provided there's not some sort of extra services delivered that we didn't order or authorize for. But as we get into some other plans, it might be close [or] it might not be," he says. But he stressed there will still likely be inaccuracies within the system's top commercial vendors because contractual terms vary from procedure to procedure.

In the near future, NAH will change its practices when it comes to estimates. For example, Mr. O'Hara says the system seeks to provide estimates based on science — and within seconds — both verbally and electronically. This means not simply providing a patient with an average of a diagnosis-related group or Current Procedural Terminology Code.

Instead, "we want to be able to say this person's coming in with these benefits, here's how the charges work, here's how we model that benefit plan [and] here's what you owe," he explains.

Given this goal, NAH has made contract management and modeling a priority. Mr. O'Hara says the system can now load contract terms into a database that can then aggregate that data into contract modeling, which is tying back to the chargemaster and providing a more scientific estimate. He notes there may still be inaccuracies when something happens during a procedure that wasn't planned for.

Overall, he believes the healthcare industry can do a much better job at providing estimates.

"We're getting better at the idea of having model plans provide an estimate, but what I think we haven't done is get some sort of critical mass where we're allowing patients to pay for their things on their own terms," he says. "That's an important part of patient information. Because anybody can put [an] estimator in place, but does that drive patient satisfaction? That's the end game. I believe an educated patient who we can clearly articulate to what they owe is a satisfied patient for the most part. Most people want to pay. We just haven't educated them on where they can do it and how they can do it on their terms and not ours ... There's no reason healthcare can't be Amazon. It's just not."


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