9 Clues That Your Market is Price Sensitive

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Shay Pratt

In a wide-ranging talk in which he reviewed pricing trends impacting the current imaging landscape as best as possible considering the many uncertainties, Shay Pratt, principle, The Advisory Board, reassured hospital radiology administrators that fee-for-service will not disappear (immediately) and hospitals are likely to enjoy a pricing advantage in the outpatient market (at least for the time being). In other words, there is no sign that the ax used to reduce imaging reimbursement in the freestanding market will be sharpened next on hospital outpatient imaging. However, there are some significant competitive threats.

Commercial payors are not waiting to see how the government will bend the cost curve, but instead are taking matters into their own hands by steering patients to low-cost providers. To that end, some payors are introducing tiered co-pays, whereby the patient’s share of a hospital-based MRI is $450, but just $50 in a low-cost.

While there is some evidence that higher prices can influence patient behavior, RBMs are not waiting around for consumer-driven health plan to take off, they are trying to influence the trend right now. Both CareCore and national Imaging Associates have moved from the traditional pre-authorization process to an RBM scheduling process. When the pre-authorization is granted, the RBM scheduler contacts the patient and can be aggressive about getting the patient to schedule at the approved site.

Some imaging center chains have also begun advertising to consumers and are working to secure preferred provider status with local payors and purchasers, including employers.

In a survey of member institutions, the Advisory Board reports that 59% reported feeling some urgency about making price adjustments. Pratt expressed some surprise at the results and identified the following red flags that may indicate price sensitivity in your market:

1. Are RBMs offering scheduling programs?
2. Does the institution receive a high volume of price inquiries?
3. Are you fielding complaints or inquiries from referring physicians on price?
4. Are high-deductible plan prevalent in your marketplace?
5. Is there a lot of volatility in admissions from the downturn? Are individuals staying away from health care in your market?
6. Does your state maintain a hospital price comparison site?
7. Do payors or RBMs maintain a hospital price list in your area?
8. Has your local press started covering the issue price transparency for imaging?
9. Have you heard of RBMs steering patients to other providers?

“It’s too early to panic, but definitely something to think about,” he says.