Spectrum offers custom hospital bill estimates

March 5, 2011
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Spectrum Health has introduced a program to estimate patients’ out-of-pocket hospital expenses before they ever walk through the doors.

“In a way, it’s not unlike getting an estimate for a car repair,” said Joe Fifer, vice president of hospital finance for Spectrum Health Hospital Group. “It’s an estimate. It’s based on what is ordered at the time. But you don’t 100 percent know that’s the service that is ultimately going to be rendered.”

For years, Spectrum has contacted patients who have scheduled procedures via telephone prior to admission. The pre-arrival call is used to verify insurance coverage, provide directions and other non-clinical information, said Fifer.

Now, during that phone call, the Spectrum representative can check immediately with the patient’s insurance carrier and provide an estimate for out-of-pocket costs.

“We now have the capability to connect real time with most insurance companies,” Fifer said. “The vast majority of the insurance companies we deal with, we can communicate with them, get up-to-date status of how their plan works, their out-of-pocket status and where they are in their deductible. We combine that with the service they are going to have here, and we are then able to give that patient an estimate of what it’s going to cost them out-of-pocket.”

The estimate comes with a few caveats: It does not include doctors’ charges or other providers; every patient requires different care and may have complications that increase costs; and there are still a few gaps, Fifer noted, such as a few insurers that are not part of the system and a few services that are difficult to include.

Still, Fifer said, he thinks the information is valuable to patients as they face higher deductible and co-insurance charges.

“This is what people really want to know,” he said. “This is meaningful information for them. It enables them to plan accordingly.”

It’s also a way to help patients who qualify for programs such as charity care or Medicaid to apply for them well ahead of the billing cycle, he added.

The majority of Spectrum Health patients, both inpatient and outpatient, are scheduled ahead of time for services, spokesman Bruce Rossman said.

“What I like to think is that people, when they get here, don’t have to be worrying about their bill. They can worry about their health,” Fifer said.

The system uses software from McKesson, a California health care software developer, and another application that originated with Priority Health, Rossman said.

“It, in a very short period of time, brings together a pretty complex set of dynamics, meaning you’ve got to communicate with the insurance company on a real time basis if somebody’s got a $2,500 deductible; you have to figure out where they are in that deductible, plus the estimate on our end of what the procedure is going to cost. All that has to converge into one estimate that we try to make as simple and as understandable as possible for our patients.”

There’s not much in the way of data on how the program is going because it’s been in place for only two months, Fifer said. But the reaction has been varied among patients who are offered the opportunity to obtain the estimate, he said.

“Some do and some don’t,” Fifer said. “Some get mad that we even ask the question. Some love it. Sometimes it depends on what kind of coverage they have. We get all kinds of reactions. No matter what, we think it’s the right thing to do, so we are going to keep offering it.”

It’s a better alternative, Fifer said, than waiting until after the service, sending bills that the patient can’t pay and dealing with collection agencies. That process consumes time and resources, not to mention good will.

“This enables us to move that whole conversation much earlier,” Fifer said.

Metro Health Hospital and Saint Mary’s Health Care are both considering software-based solutions for hospital bill estimates, their spokespersons said.

Metro Health posts average prices on its website, spokeswoman Ellen Bristol said. Customer service representatives will work with individuals at their request to provide an estimate of hospital charges, she said.

Saint Mary’s is considering a software solution that could be implemented in four outstate hospitals owned by its parent company, Trinity Health, spokeswoman Katie Halloran said. That would include Mercy Health Partners in Muskegon, Mercy Hospital in Cadillac and Mercy Hospital in Grayling, she said. A system could be implemented in 2012, she added.

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