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Understanding Costs and Supporting Transparency—Keys to Quality Care

Decker, Tina Freese, FACHE

Frontiers of Health Services Management: April 2019 - Volume 35 - Issue 3 - p 14–24
doi: 10.1097/HAP.0000000000000052
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SUMMARY Demonstrating value is essential to the future success of healthcare organizations. Health systems that disrupt traditional delivery models and meet consumer demands will lead the way. However, value depends on understanding the true cost of care. Until now, determining the total cost of care has not been addressed for three primary reasons: (1) tackling such a herculean effort was not necessary; (2) a lack of effective coding, accounting, and billing tools connected to clinical systems made it next to impossible; and (3) consumers did not pay as much for their healthcare as they do now.

Diving headfirst into this challenge is Spectrum Health, a $6 billion system based in Grand Rapids, Michigan, with 14 hospitals, more than 225 service sites, a medical staff of 4,200 (about half of whom are members of its medical group), and a million-member health plan. Spectrum Health has transformed its care model and billing platform, transitioning to one electronic health record systemwide, because a high-performing, fully integrated approach ensures the highest-quality care and outcomes. At the same time, the cost of care directly correlates to what consumers pay through their insurance, and they want pricing information that can help lower their expenses. Spectrum Health’s insurance entity, Priority Health, is making significant strides in offering leading-edge price transparency tools.

This article outlines the challenges and opportunities in determining the total cost of care and ultimately reducing those costs. Equally important is translating this information into what consumers pay, as well as providing price transparency and other digital tools that engage consumers in their health and wellness.

Tina Freese Decker, FACHE, is president and CEO of Spectrum Health in Grand Rapids, Michigan.

The author declares no conflicts of interest.

© 2019 Foundation of the American College of Healthcare Executives
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