"Roughly, 30% of total healthcare spend for provider organizations falls into the shoppable category."

Q: Change Healthcare will be now a part of Optum from what we see in the news. Is that right?

Bill Krause: We expect the transaction to close in the second half of 2021, subject to regulatory approvals and other customary closing conditions. Until that time, we will continue to operate in the market as separate entities. That means, for now, it is business as usual from both the Change Healthcare and Optum sides.

Q: Since we spoke on this podcast, you have continued to focus on payment, transparency, and solutions for healthcare consumers. What is driving that focus from a marketplace standpoint, and what is the emerging need you are trying to serve?

Bill: Several factors are going into this, and the government has also provided a fair amount of commentary around their rationale for putting forward the regulatory changes. From a customer standpoint, the provider and payer experience underneath it needs more information to be available at decision making time to inform consumers on their healthcare journey.  There is tremendous friction today with consumers in understanding their financial responsibility at points in time when they can manage and make decisions to address whatever those needs are. This friction in understanding has a ripple effect for provider organizations because it’s challenging for the revenue cycle departments to function at a high performance given the challenges. From a more macro standpoint, better-functioning markets require transparent access. This plays into the government’s objectives to create a more functioning health care marketplace.

Q: The CMS had announced the hospital price transparency rule in May 2019. The deadline for compliance is already up. Can you tell us more about that?

Bill: The CMS price transparency rule became effective on . The rule requires providers to post on their websites all prices in a machine-readable format and prices for a select group of shoppable services in a consumer-friendly format. That has changed the dynamic as it relates to making information available. The rule went much further than previous iterations of transparency rules requiring publishing providers’ chargemasters. Now, providers must put forward the negotiated rates for services that they have established with all the payer organizations that work with the providers.

Q: As a consumer, I should see some degree of price transparency, which allows me to exercise some choice. With digital transformation, I should see all this information online, make choices, and make payments before taking the service. How does this fit into the notion of a seamless digital patient experience?

Bill: It fits in a very critical way through a lot of the research that we have done with consumers around their top needs and friction points in healthcare. Among the very top is understanding consumer benefits and their financial responsibilities. When provider organizations are laying out their strategic priorities to transform digitally, financial management and financial information are among the top areas providers are looking to address first. For a consumer, the beginning of that care journey begins with awareness of what they need and then considering in more detail where they should go, their care options, and financial responsibility.

Q: Change Healthcare recently launched a solution to meet this need. Can you talk a little bit about that?

Bill: We had previously rolled out Shop Book and Pay™, which is the solution to create digital storefronts for provider organizations. You can brand and put forward into the public square shoppable tests and procedures. Last year, we decided to enhance the solution further by meeting regulatory requirements for price transparency. Many hospitals have adopted the solution to comply with transparency, host, create and host the machine-readable files, and meet other requirements around both tests and procedures in a consumer-friendly, self-service searchable format. So that’s part of our connected consumer health and patient engagement portfolio. It is an area that, as a company, we have been making a lot of investments and innovation.

Q: How are hospital administrators responding to the Shop Book and Pay™ solution? As consumers, are we going to see the level of transparency that is intended through this ruling?

Bill: As of December, the estimates were that about 60 percent of providers were still not compliant with the rule. The smaller providers are more likely to be compliant, probably because they cannot afford the three hundred dollars per facility per day penalty. For large hospital organizations, achieving that transparency is on the agenda, but they have not yet gotten into compliance with the rule. Across the US, there is varied adoption of the rule while many are still working towards it. The work itself requires a fair amount of detailed analysis of their contracts with payers and efforts to bring that data into a format to comply with the rule.

Q: What impact does it have on the business of the health systems?

Bill: According to the initial assessment, there has been tremendous interest from all parties in accessing this information to incorporate it into decision making, beyond just informing consumers. Many providers are just beginning to integrate ways to communicate the availability of the tool in a language that a consumer can understand. When you compared this to the situation prior to the CMS rule on transparency, there have been select examples in different markets throughout the country where transparency information was made available through a few contracting cycles.

Right now, among the top issues are the providers and payers thinking through what this means for pricing strategy for shoppable tests and procedures, which then will come back to consumers. It, however, will be driven more from provider and payer strategies than it might be from direct consumer shopping in the immediate term.

Q: Consumers who are covered by employer-based health insurance do not care who pays and how much. What would be driving this interest in increased transparency among consumers? Are there specific types of procedures that are now transparent to consumers, and is it making an impact in the way they make their choices? Is there a certain type of demography among consumers taking advantage of this more than the others?

Bill: The government has specified the everyday services and tests to be included in the consumer-friendly requirements of the rule. Things like physical therapy visits, office visits, and simple lab tests are the highest volume areas and have the largest everyday care needs across the broader population. In the case where a patient has purchased care prior to a service, the demography is typically a female in her early forties managing a household, and thus taking care of healthcare needs of the household and demonstrating a real tendency towards shoppable behavior. This demography is going to pursue shopping more frequently. The other thing is, there are many organizations that are growing quite rapidly in the arena of care navigation and support. When you think about the consumer holistically, the influences, and their healthcare experience, they will have other resources such as navigation services that an employer or organization may license for the consumer to use. There are other ways that steering and price shopping can show up and drive consumer behavior beyond just a consumer going to the front door.

Q: How did the pandemic impact consumer attitudes for healthcare services in general and price shopping? Has it accelerated the price shopping behavior?

Bill: It is accelerated the movement to digital healthcare journeys. There is a dramatic shift toward telemedicine behavior. The general behavior of interacting with a digital-first channel of care is the primary driver. This also supports the digital transformation initiatives of companies putting information transparency directly in front of the consumer. With the most recent rollout of price transparency, it is really in the first innings. It has not yet shown up from a shopping standpoint so much as just the general shift in the use of the digital-first approach to care, which is a precursor to shopping for care services and using transparency and further.

Q: We see more employers contracting directly with providers, taking control of healthcare costs, and funding something themselves. What do you make of this trend, and what kind of impact does it have on consumer behavior and price transparency and choice? Is there a correlation between this trend and what you see as the demand for your offerings in particular?

Bill: I see a correlation between those trends. Employers are taking an active role and driving our health care industry to be a more value-based care system. [9.9s] Direct contracting is an example of things that provider organizations, associations, and others representing the self-insured employer segment are helping to facilitate. There have been many examples of centers of excellence, strategies of large employers contracting with health systems for certain services, and more. Direct contracting strategy for price transparency and a focus on shoppable testing procedures is probably poised to grow even faster. For example, according to data shared by a payer customer, there’s a vested interest on both the provider and the employer organization to find new ways to direct contract to include shoppable tests and procedures. Previously, this interest might have been focused more on certain surgeries, service lines, and centers of excellence.