Human bodies are complex. Human minds are complex. If you are working on either, you will encounter surprises. The unexpected is the norm. As hard as you try to provide pricing your patients can understand, there are always variables. Complications, new discoveries from the lab or the exam, additional and unanticipated materials were needed, or a hundred other potential issues can arise. These tend to fight against pricing transparency.
Now you could take the 68,000 ICD-10-CM codes or the 87,000 ICD-10-PCS codes and put a price to them and hope everything goes well. Not that any practice would ever use every code in the book, but you get what I mean. You could try to put a price to every code your practice uses and hope the time the doctor spends on each diagnoses is exactly (or close to) the same. But it just doesn’t work that way, does it? (I’m not even going to consider the labyrinth of confusion insurance adds to this conversation)
The same diagnosis the doctor spends ten minutes to treat in one patient, may take him or her an hour to treat in another. Sometimes for reasons that don’t fit any codes.
Let’s say you do put a price to a treatment or one of your common ICD-10 codes. You quote that price to the patient as the primary price they will incur for the procedure. You also state that the price doesn’t cover any complications that may arise. Do patients hear that part? You could shout it into their ears with a bullhorn and they will very conveniently forget that part - they will argue with you about the price you quoted and claim you never said anything about complications and the potential for higher costs.
What happens if more issues are uncovered during the procedure? You are back to square one and needing to quote more prices for more procedures. Some issues will run into pages of price quotes, none of them exactly accurate to what will actually happen once the treatment begins. So what do we do?
Knowing that the market is going to continue to push for pricing transparency and ignore the complexities of the human mind and body that make transparency so difficult, let’s at least make a start. To get ahead of the curve a bit try doing these three things:
- Cost Study Your Most Common Codes: Take 10-20 of your most common codes, starting with an office visit/exam and conduct a thorough cost study. By cost study I mean to count the cost to your practice for everything from the first call to the last dollar collected. Include man-hours at cost (office staff all the way to physician time, with benefits - not just hourly wage), paper shuffling, data input, time talking to staff, physician visit, physician note recording, billing, collections, postage, everything! You may be shocked what a simple diagnosis actually costs your practice when it’s all said and done!
- Price Those Codes. Once satisfied you’ve tracked down the complete costs, then put your desired margin on that number. Don’t forget you have to cover your overhead (rent, insurances, equipment, supplies, etc.) in that number as well as make some money at the end of the year. Then compare that number to the market - the other practices in your community that do what you do. If a patient can go down the street and receive the same care for 20% less, why wouldn’t he? And what happens if you are way overpriced for the market? You’ll have to find ways to cut costs or explain why your rates are so much higher than the competition.
- Provide ESTIMATES For Your Most Common Codes. Rather than giving hard and fast prices for your procedures, give a range. If procedure X could be as low as $76 but as high as $120, be honest and say that. Carefully include language like I have in this article. “The human body is complex. While we attempt to provide the most accurate estimates possible, it’s not always easy to tell what a procedure will cost. Your final bill may be different to this ESTIMATE.” I know, they probably will ignore this statement, but if it’s in writing you can always point back to it.
Getting in front of the conversation works much better than trying to catch up once the market has already soared past you. This is hard work but it will pay off if you can get the core of your business studied, priced, and estimated for patients.