How Price Transparency & Psychographic Segmentation Can Encourage Patient Payments
Imagine going to a car dealership, writing a check for your chosen vehicle and driving home in your shiny, new wheels. Now imagine that 3-4 weeks later, you receive a surprise bill to cover the bulbs in the headlights and taillights, the battery, the brake pads and fluid, the oil and gas — every ‘extra’ that is, in fact, necessary for the car to run. It sounds ludicrous, yet healthcare consumers face an ongoing lack of price transparency, as we noted back in 2014. And it’s having a negative impact on patient payments. Why is transparency still an issue in the age of healthcare consumerism?
Healthcare price transparency is complicated
In January 2019, a federal rule went into effect, requiring all hospitals to post their list prices online. But surprise bills still seem to be par for the course. One reason is that the chargemasters hospitals are required to post can be difficult for even the most health-literate person to decipher. Kaiser Health News notes, “… what is popping up on medical center websites is a dog’s breakfast of medical codes, abbreviations and dollar signs — in little discernible order — that may initially serve to confuse more than illuminate.” A closer look at the barriers to healthcare price transparency reveals three issues:
- Shopping for healthcare isn’t always an option, as is the case for emergency care or for treatment of complex medical issues. Focusing on price transparency for more shoppable aspects of healthcare — such as prescription drugs, elective surgeries and preventive care — would help healthcare consumers get into the habit of comparing prices.
- Healthcare consumers don’t have the information needed to determine costs accurately. Hospital chargemasters itemize care and use medical codes that can be difficult for patients to decipher. As a result, identifying every line item required for a single episode of care is next to impossible for healthcare consumers. And even if they could figure it out, the chargemaster list prices are rarely what insured patients might pay once insurer-negotiated rates, deductibles and co-pays are in play.
- Healthcare consumers need to understand both price AND quality to make informed decisions. A person might look to independent review, like those in Consumer Reports, before buying an appliance to understand quality and decide if extra features are worth a higher price. In healthcare, however, many patients equate higher prices with better quality, when that’s not necessarily the case.
Healthcare consumers need better information in order to make informed decisions. Some hospitals have begun offering price lists based on an episode of care — the cost of a knee replacement surgery, for example. Modern Healthcare reports that Dallas-based Baylor calls patients with a cost estimate for higher-cost hospital services. The health system also offers estimates to walk-in and emergency room patients and a DIY cost-estimator on its website that uses its contracted rates and patient benefit information to deliver personalized results. Until this is a more wide-spread practice, however, healthcare organizations need to consider other approaches to motivate patient payments.
Can psychographic segmentation accelerate payment collection?
The c2b psychographic segmentation model looks at the factors that influence patients’ healthcare decisions, including the attitudes and preferences involved in patient payments. For example, Self Achievers and Willful Endurers are more interested in receiving a live phone call than other segments. Balance Seekers, Priority Jugglers and Direction Takers prefer receiving bills by mail. And all but Willful Endurers are interested in receiving email notifications.
When used in combination with a patient engagement platform like PatientBond, these insights into consumers’ wants and needs can lead to more efficient, effective collections. One organization saw day-to-day collections improve seven-fold within 48 hours of launching PatientBond. Instead of wasting resources on manual collection efforts, hospitals can automate the process based on individuals’ communication preferences and fine-tune the messages to align with their psychographic segment to spur action.
Price transparency will go a long way toward empowering healthcare consumers, but when it comes to paying a bill, knowing more about what makes patients tick can help too.
To learn more about our proven and proprietary psychographic segmentation model, download our whitepaper.