'The right thing to do': 7 Qs with Waystar's Heather Kawamoto on price transparency in 2021

In January, CMS' final price transparency rule for hospitals will take effect. The rule aims to make information on care costs readily available for patients seeking care. Price transparency has long been a vexing challenge in healthcare. Meeting the requirements of this rule has become a top priority for healthcare leaders.

Here, Heather Kawamoto, vice president of product at Waystar, answers seven questions about achieving price transparency in healthcare.

Question: Why has achieving price transparency been such a challenge in healthcare?

Heather Kawamoto: Fundamentally, healthcare pricing is complicated, and it takes a huge amount of data to determine who owes what to a provider. Although there are now technologies that can solve this, with profit margins as narrow as they are for many providers, price transparency has historically been seen as a "nice to have" rather than a "need to have." Now, of course, that is changing.

Q: What are the biggest challenges with meeting the mandate, and are there ways to solve them?

HK: Many healthcare organizations are even more strapped than they were, both financially and in terms of staffing, since the onset of COVID-19. The way to mitigate, if not solve, these challenges and meet the mandate is to prepare. Healthcare organizations should educate internally about the mandate, put together a task force to manage the transition, consider external partners and technology solutions — such as price estimation tools — and continuously measure progress.

Q: Would you say the tide is turning on price transparency? Are hospitals making real progress here?

HK: Yes, and I am hopeful the CMS requirement will spur progress on a much greater scale. When it's done right, patients can go to any provider to get information about what their out-of-pocket cost will be. Additionally, this can help healthcare organizations drive up-front collections. For example, Waystar has a client in Texas that has increased point-of-service collections by 60 percent since they began offering price estimates.

Q: In an ideal world, what does price transparency look like in five years, and what technology or processes would we need to get there, whether they exist now or not? Or, put another way, what is the price transparency nut that everyone is trying to crack?

HK: In an ideal world, there would be a centralized location, be it a website or app, where patients could go to indicate the type of service they need and find providers near them, see who takes their insurance, and get an estimated price across multiple providers. In five years, I hope patient satisfaction has increased significantly, denials are reduced, and patients feel prepared and empowered to pay providers faster and more fully. I believe the machine-readable requirement of the CMS Final Rule is a big step in that direction.

Q: With 2021 CMS changes on the horizon, how can hospital leaders prepare? What tools can these organizations leverage to get ready?

HK: Leaders should be looking at third-party experts and technology vendors to help them provide accurate patient estimates, both patient- and provider-facing. Those processes and technologies should be aligned so that the figures a patient gets from a self-service estimate are in line with what they will get from the organization. Healthcare organizations should also be evaluating how a patient pricing tool fits in with their larger up-front collections process and strategy, including tailored patient communications, to build both loyalty and a stronger patient-pay pipeline.

Q: What about supporting a better patient financial experience as a whole? What solutions are available to hospitals?

HK: Providers need to be strategic about tailoring their patient communication strategy if they want to ensure the best financial outcome for both the patient and the organization. Analytics can predict whether a patient will be able to pay, and if so, suggest the best way of engaging that patient through multi-channel payment communications to support timely collections at the lowest possible cost. On the flip side, if the patient is not able to pay, you need to streamline your financial assistance processes to find the best possible assistance program. The good news is there is technology that can solve for both of these challenges, and those solutions can tie nicely in to your price transparency and up-front collections processes.

Q: Anything else you'd like to say about price transparency in healthcare?

HK: Making available price information can feel scary. But I don't think patients will necessarily gravitate to the lowest-cost provider. Patients want a provider they can trust. Giving patients meaningful information about the cost of their care is the right thing to do, both from an empathetic and a financial angle.

In January, CMS' final price transparency rule for hospitals will take effect. The rule aims to make information on care costs readily available for patients seeking care. Price transparency has long been a vexing challenge in healthcare. Meeting the requirements of this rule has become a top priority for healthcare leaders.

Here, Heather Kawamoto, vice president of product at Waystar, answers seven questions about achieving price transparency in healthcare.

Question: Why has achieving price transparency been such a challenge in healthcare?

Heather Kawamoto: Fundamentally, healthcare pricing is complicated, and it takes a huge amount of data to determine who owes what to a provider. Although there are now technologies that can solve this, with profit margins as narrow as they are for many providers, price transparency has historically been seen as a "nice to have" rather than a "need to have." Now, of course, that is changing.

Q: What are the biggest challenges with meeting the mandate, and are there ways to solve them?

HK: Many healthcare organizations are even more strapped than they were, both financially and in terms of staffing, since the onset of COVID-19. The way to mitigate, if not solve, these challenges and meet the mandate is to prepare. Healthcare organizations should educate internally about the mandate, put together a task force to manage the transition, consider external partners and technology solutions — such as price estimation tools — and continuously measure progress.

Q: Would you say the tide is turning on price transparency? Are hospitals making real progress here?

HK: Yes, and I am hopeful the CMS requirement will spur progress on a much greater scale. When it's done right, patients can go to any provider to get information about what their out-of-pocket cost will be. Additionally, this can help healthcare organizations drive up-front collections. For example, Waystar has a client in Texas that has increased point-of-service collections by 60 percent since they began offering price estimates.

Q: In an ideal world, what does price transparency look like in five years, and what technology or processes would we need to get there, whether they exist now or not? Or, put another way, what is the price transparency nut that everyone is trying to crack?

HK: In an ideal world, there would be a centralized location, be it a website or app, where patients could go to indicate the type of service they need and find providers near them, see who takes their insurance, and get an estimated price across multiple providers. In five years, I hope patient satisfaction has increased significantly, denials are reduced, and patients feel prepared and empowered to pay providers faster and more fully. I believe the machine-readable requirement of the CMS Final Rule is a big step in that direction.

Q: With 2021 CMS changes on the horizon, how can hospital leaders prepare? What tools can these organizations leverage to get ready?

HK: Leaders should be looking at third-party experts and technology vendors to help them provide accurate patient estimates, both patient- and provider-facing. Those processes and technologies should be aligned so that the figures a patient gets from a self-service estimate are in line with what they will get from the organization. Healthcare organizations should also be evaluating how a patient pricing tool fits in with their larger up-front collections process and strategy, including tailored patient communications, to build both loyalty and a stronger patient-pay pipeline.

Q: What about supporting a better patient financial experience as a whole? What solutions are available to hospitals?

HK: Providers need to be strategic about tailoring their patient communication strategy if they want to ensure the best financial outcome for both the patient and the organization. Analytics can predict whether a patient will be able to pay, and if so, suggest the best way of engaging that patient through multi-channel payment communications to support timely collections at the lowest possible cost. On the flip side, if the patient is not able to pay, you need to streamline your financial assistance processes to find the best possible assistance program. The good news is there is technology that can solve for both of these challenges, and those solutions can tie nicely in to your price transparency and up-front collections processes.

Q: Anything else you'd like to say about price transparency in healthcare?

HK: Making available price information can feel scary. But I don't think patients will necessarily gravitate to the lowest-cost provider. Patients want a provider they can trust. Giving patients meaningful information about the cost of their care is the right thing to do, both from an empathetic and a financial angle.

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