Healthcare cost has always been a controversial topic within the global health industry. Governments and patients often see hospitals as profit-oriented. How can hospitals in Asia debunk this widespread perception?
For Dr Kenneth Tsang, Chief Operating Officer at Gleneagles Hospital Hong Kong (Gleneagles), healthcare cost can be justified by good clinical governance and high clinical standards.
Justifying healthcare cost
“Healthcare services are a lot like a supply chain, costs are intrinsically expensive, taking into consideration the upstream investments like healthcare professional education, development of drugs, and research into new facilities like MRIs and CT scanners,” says Dr Tsang. Since hospitals are at the tail end of this supply chain, patients and payers need to understand the correlation between the cost and the quality of care considering the framework from which pricing can be based.
For one, hospitals need to adhere to government standards. In Hong Kong, the relevant cost for this is high, as it involves observing healthcare manpower ratios, laboratory accreditations, fire safety ordinances, electricity supply requirements, and sourcing of safe drugs.
Second, the hospital needs to “do extra”. For Gleneagles, this is equivalent to an investment on a quality and safety team that looks into any errors made and what can be learned from the identified mistakes.
Third, hospitals, in order to remain competitive and motivated to deliver top-notch clinical outcomes, bring in external accreditation bodies. Plus, they promote continuous learning of healthcare staff, thus, there are also costs related to participation in international conferences and seminars.
While it should be acknowledged that hospitals must meet these costs to provide quality care, Dr Tsang recommends that patients should be approached about treatment outcomes rather than monetary terms. When patients believe that a hospital is able to provide superior outcomes for the procedures they need, they will definitely regard this hospital as first on their list, especially if their budget aligns with the cost. Hence, Gleneagles believes that it is important for patients to have access to how a hospital puts a price tag on its services.
Gleneagles has participated in the Hong Kong Government’s Pilot Programme for Enhancing Price Transparency for Private Hospitals. Potential patients can visit Gleneagles’ website and check how much the hospital’s historical bill size statistics of common procedures. Dr Tsang emphasises that this programme addresses the predictability concern of their potential patients.
For private healthcare, this predictability of how much a patient has to pay for hospital treatment is of utmost importance. Patients would want to know how much they’re expected to pay for a certain procedure, whether their insurance could cover the treatment, or at what percentage could be charged to insurance. Hence, it is imperative to be transparent in pricing so patients can have a meaningful comparison of prices between healthcare providers and hospitals, therefore, know how much they’re expected to pay upon discharge.
Gleneagles provides price transparency for patients via two means: fee advisory prior to admission and ‘all-inclusive fixed-price medical packages’.
Fee advisory means providing fee estimation for any patient coming to Gleneagles for treatment. This way, patients are able to understand how much they would likely have to pay, thus, enabling them to do proper budgeting before committing to getting treatment. Because of this, patients have peace of mind in terms of financial expectations. Since fee advisory is done by experts who have a thorough understanding of Gleneagles’ procedures, such as equipment usually used by doctors in the operation theatre, and duration and type of surgery, the quote patients get is customised.
Meanwhile, patients using ‘all-inclusive fixed-price medical packages’ pay a fixed fee for a particular surgery, including doctor’s fee, anaesthetist’s fee, medication, diagnostic tests, equipment, and all related charges. So, even when complications arise in intensive care, the hospital will be the one to absorb the additional cost. Patients, then, will know what they’re getting for a fixed price, and “what they’re getting is not just the committed procedure but also the uncertainty of the procedure”.
Setting the pace
Implementing price transparency is what sets Gleneagles apart from its competitors in Hong Kong as it provides value for insurers, the hospital, and the patients.
Knowing how much they are expected to pay gives patients an idea of what to expect with getting healthcare services at the hospital of their choice. Because they understand that the cost is broken down to the quality of care they will be given, justifying pricing is a lot easier.
Being in a very competitive market, Gleneagles’ advocacy for price transparency enables it to drive change in Hong Kong’s private healthcare landscape while at the same time increase patient catchment. Payers in the healthcare market include both patients and insurance companies. Insurers are definitely keen on referring their customers to Gleneagles because of its fixed-price packages and transparent pricing. Since insurers want cost that they can control and get the best estimate, price transparency initiatives work for them as well.
As a service provider, Gleneagles is committed to providing quality service to patients. Notwithstanding being a for-profit hospital, Gleneagles aims to help patients understand that the high quality of care they can receive could be assessed with the prices the hospital has made available.