California May Grab the Headlines but Need to Address Price Transparency is National

August 29, 2014
William Balfour

By George Krueger, Regional Sales Director.

Hospital pricing is back in the news. If you live in California, a new study has found that a simple blood test can run you anywhere from $10 to $10,000. Headlines like this are popping up in news feeds with regular frequency, and pretty soon consumer awareness will transform into action.

Addressing pricing transparency is all about finding the market sweet spot. A colleague of mine equates it to driving on the highway; you want to drive just above the speed limit but not to such an extent as to draw the attention of law enforcement.

Identifying that sweet spot and preserving your net revenue requires knowing a little something about the competition. Our assessment of hospital performance in California includes some thought-provoking metrics. The California hospital average for Charges (as determined by the Hospital Strength INDEXTM) is well below the national average, indicating that these hospitals are charging more than their peers. And among common DRGs, there’s a significant gap in commercial payment.

In this era of price transparency, hospitals that find themselves on either end of these graphs need to act quickly or run the risk of (1) consumer backlash, (2) decreased market share or (3) lower revenues.

If you’d like to know how your state measures up when it comes to Charges, reach out to us at 480-773-8770.



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