Just last year, GE Capital Retail Bank’s Major Purchase Shopper Study found that 81 percent of consumers go online to research products and compare prices before making purchases valued at $500 or more — a 20 percent increase over the previous year. While the study was limited to consumers shopping for big ticket items like appliances, electronics, home improvements or lawn and garden equipment, the trend seems to be catching on in another sector — health care. Particularly among consumers with high deductible health insurance plans, shopping for health care providers that offer the best price and quality is increasingly common.
With patients acting more like consumers, it comes as no surprise that transparency is a big buzzword among hospitals and other health care providers, but is it possible to overshare?
Using psychographic segmentation, organizations can ensure they are providing the right amount of information to the right people at the right time. More on this in a moment…
Ready or Not, Here Comes Price Transparency
According to a recent webinar from the Institute for Healthcare Improvement, the financial realities of health care costs are bleak. In an August article, Marty Stempniak of H&HN Magazine noted that “Medical bills are the leading cause of personal bankruptcy in the United States.” Moreover, nearly 30 percent of health spending — around $750 billion based on 2009 data from the Institute of Medicine — is squandered on unnecessary tests and procedures.
The push for greater price transparency has been gaining traction for some time, but the influx of patients who opted for lower-cost, high-deductible insurance plans on federal and state marketplaces last year has made it even more critical.
While the intent of moving individuals from uninsured to insured status is to make quality health care available — and affordable — for more people, high-deductible plans can still leave patients in dire financial straits.
During the IHI webinar, Neel Shah, M.D., the founder and executive director of the non-profit Costs of Care, told participants that the conversation doctors have with patients must change. “At some level, the transaction is the elephant in the room,” said Shah. He continued, “The problem is that it’s not made explicit at the point of care, and that’s when the vast majority of health care decisions are actually made.”
Knowing when and how to have those conversations is critical.
The American Hospital Association has put together a kit to share best practices and help providers evaluate their own transparency efforts. A 13-question assessment explores how well providers communicate price information — both in person and on the web — as well as information on financial assistance that may be available.
How Much Should Hospitals Reveal?
In an interview with H&HN Magazine, Jamie E. Orlikoff, the national adviser on governance and leadership to the American Hospital Association and Health Forum, suggests health care providers must accept that transparency is here to stay.
While health care consumers can use comparison tools offered by insurers or other sources like CalPERS — the California Public Employees’ Retirement System — Orlikoff notes that hospitals should want take the lead, saying, “In a consumer-driven market, the source of information is a very powerful market force, and hospitals should want to be the source of information. Otherwise, they run a great risk of being dictated to as opposed to taking control over their pricing.”
At the same time, as health care providers are well aware, patient compliance is an on-going challenge. Is it possible that full price transparency could lead to even lower compliance as patients make health care decisions based strictly on price lists?
Hospitals and doctors must walk a very fine line — providing the information a consumer needs to take financial control of their health care — without alienating the patient. Psychographic segmentation enables health care providers to offer more strategic, customized and “right-sized” communications about pricing.
Earlier I mentioned using psychographic segmentation as a means of ensuring organizations are providing patient-preferred communications to improve transparency. Psychographics focus on a consumer’s personality, lifestyle and motivations, and segmentation can group patients according to shared characteristics.
If, for example, a hospital uses c2b solutions’ Consumer Classifier to identify a patient psychographic segment known as Balance Seekers, the conversation may center on the different options — and price variations of those options — available to those patients, allowing them to feel more in control of the process. On the other hand, a different segment might prefer being offered “package pricing” that sets a clear all-inclusive fee for a specific procedure, like a tonsillectomy.
To learn more about how psychographic segmentation marketing can help you match transparency to patient needs, contact c2b solutions today.