In an era of rising health care costs and consumer-driven financing alternatives, the need for health care cost transparency solutions has become increasingly important. Consumers demand information about their health care fees, and regulatory measures will continue to drive this need. In order to stay competitive, as well as responsive to market and patient needs, health care organizations must embrace this movement and launch a comprehensive pricing transparency strategy. The cornerstones of this strategic effort include weighing procedure costs, managed care issues and market risk considerations.

Initial steps in achieving this strategy require establishing a rational pricing methodology by rebasing charges for items and services within the health care organization. Efforts to get there include:

  • Evaluating the range and relative defensibility of current Department of State markup factors
  • Evaluating multiple scenarios, narrowing and widening cost corridor guardrails, while assessing gross and net revenue implications
  • Analyzing short-term net revenue needs while transitioning to a more defensible, cost-based pricing methodology

This managed care analysis requires an intimate understanding of marketplace and methodology-related opportunities and risks presented by charge-sensitive contractual agreements. It also provides an opportunity to evaluate longer-term revenue risk associated with accountable care incentives, declining utilizations and transparency-motivated charge reduction strategies. In addition, the analysis offers an opportunity to evaluate payer-specific charges and net revenue leakage risks and mitigation strategies.

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Questions? Contact RSM’s health care industry consultants.