On May 8, Health and Human Services (HHS) Secretary Kathleen Sebelius released a massive data file, detailing what more than 3,000 hospitals charge for the 100 most frequently billed medical services under Medicare.
As part of the Obama administration’s efforts to increase healthcare transparency for patients, this pricing data can actually benefit your practice as well.
See, hospitals often compete directly with private practices by offering many of the same services. And the competition will only increase as many physicians leave the private practice for the hospital setting.
If used properly, the release of the HHS pricing data will give your practice the upper hand against hospitals offering similar services. It’s always helpful to know what your competitors are charging for care.
Taking a Cue from Value Guides
When shopping for a vehicle, consumers turn to value guides like Kelly Blue Book or Black Book® to determine the price they should pay. What they don’t know is how the guides calculate these values.
It’s actually quite simple. The value guides obtain information about the actual purchase prices of vehicles from dealerships and auctions across the country. Basically, a vehicle’s value is calculated by finding the average price of those sales. The guides obtain data of sales from all over the nation to generate geographically specific values.
With the release of the HHS pricing data, you now have access to this type of information, which could serve as a powerful tool for setting your own prices.
Armed with this data, you can easily find the “value” of treatments offered at your practice that are also offered by local hospitals and then set your prices accordingly. You can lower rates if you’re charging too much or raise them if you aren’t asking for fair market value.
Let’s look at the treatment of kidney and urinary tract infections without major complications as an example.
In the above screenshot taken directly from the data file, you can see how your location affects the price you can reasonably charge. In Montgomery, Ala., charging $10,000 would make your practice a viable option for patients who don’t want to pay the exorbitant rates of the local hospitals. But in Elba, Ala., that same price would drive patients toward the hospital charging only $5,488.
The data set’s drop-down categories also make it easy to sort through the data to find the information you need. In fact, with this information, you can create your own value guide that will keep your practice one step ahead of competing hospitals.
In such a competitive industry, using every advantage at your disposal is vital. Prior to the release of the HHS pricing data set, this type of information wasn’t available outside the hospital setting, but now it’s public domain. Use it to your advantage.
Need more information that’ll help you compete with the big boys? Check out our Physician’s Guide to Marketing.
