It's a common experience for frustrated patients across the country. They receive treatment in the hospital or undergo an expensive medical procedure, and then the bill comes with a litany of unexpected charges.

But in a move toward greater transparency, hospitals are publishing drug formularies that give patients the peace of mind to at least have an idea of what the medication portion of their bill will cost.

Several health systems, including Wilmington, Del.-based Christiana Care and University Hospital in Newark, N.J., are responding to patient demands for transparency by making public their drug formularies, giving patients new insight into the details of what to expect.

Rick Gundling, vice president of healthcare financial practices for the Healthcare Financial Management Association, says a hospital posting its formulary is designed to kick-start conversation between patient and physician. Often doctors do not keep a running log of drugs on the hospital formulary, and the posting opens the door for patients to ask questions and work with physicians to lower costs. A more educated consumer base means that patients and their physicians will have more influence over the drugs that are used, as opposed to hospital administrators making the decisions.

Healthcare reform is driving patients to be more consumer-minded because their out-of-pocket costs are soaring. High-deductible health plans are becoming more and more popular among employers and individuals purchasing coverage through health insurance exchanges, resulting in a more consumer-centric business environment. Increased cost sharing is causing patients to take on the burden of reducing their own care costs. When paying a $2,500 deductible, consumers want to know where their money is going, why the bill is so high, and how they can reduce the cost. As a result, hospitals are under pressure to end ambiguous billing and provide patients with detailed descriptions of procedure costs.

Transparent formularies are a step in that direction. Expect hospitals to be under pressure to provide more detailed invoices; inform patients about the differences in their options; and improve the transparency of their formularies. Consumers will be looking for cost-saving measures and will return to the organizations that provide pricing matrices that breakdown procedure costs and work with the patient to keep costs down.

As the percentage of patients responsible for a larger portion of the cost of care increases, the demand for transparency will grow. Several hospitals are already preparing themselves for a more educated and cost-conscious consumer. Hospitals that do not include patients in cost control may lose them to those that do.

Expect topics like this to be discussed at the National Rural Health Association's  37th Annual Rural Health Conference starting this Wednesday, and follow me on Twitter for developments from that conference.

 

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