CFOs brace themselves for increased price negotiations—this time, by consumers

Healthcare Financial Management, Feb, 2006

HFMA recently brought together a group of healthcare finance executives to learn how they are adjusting their processes to accommodate the increase in consumer-directed health plans. The following is an excerpt of their discussion.

Question: Do you worry about patients calling different hospitals for pricing information like they would for other retail purchases?

"We already have that happening, especially with obstetrics patients. They will call and ask, "What do you charge for a C-section?' The thing is, it depends. We don't know if there are going to be complications or other extenuating circumstances, so we can't always say. It is hard to price a lot of the time, so you give them a range, but that typically doesn't make them happy.

"If patients are truly self-payers or have a high deductible, they will call around. We have had this experience already where they will call each facility and then come back to us and say, 'Well, the hospital in this town has this price. Axe you willing to underbid them?' It's a difficult situation in trying to then figure out what you're bidding against."

--Jeanna L. Adler, CPA, CFO, Wise Regional Health System, Decatur, Texas

"I think we are going to see web sites with comparative hospital pricing. Our immediate concern--because we, too, are experiencing this--is the negotiation process that may start occurring at the registration desk. What do you do in those situations? The patient has just bought a car and now they want to negotiate their appendectomy.

They come with the mindset, 'We don't care what your list price is.'

"A few mouths ago, I was at a meeting where Steve Forbes gave an overview of the economy. When somebody asked him his opinion of health care today, he replied that he was more optimistic than ever before because he saw the wave of consumerism as fixing the industry faster than any legislation could ever do. He reasoned that there has been no industry in this country that the consumer has been unleashed on that hasn't responded almost instantaneously. When you think about that, it's unnerving if you're in the industry, but there's a lot of truth to it."

--Jay S. Herron, CPA, vice president or finance and CFO, Christus Health, based in Texas and Louisiana

Source: "Meeting the Challenge of Consumer-Directed Plans," an HFMA Executive Roundtable.