Investments in digital capabilities will bring clarity to insurance benefits and pricing
Patients have historically had little to no visibility into the cost of healthcare services prior to those services being rendered. A common justification for this lack of transparency? Simply that the matter is complex. There are myriad factors to consider when determining costs, making it difficult—if not impossible—to provide reasonable estimates beforehand or easily comprehendible itemizations afterward.
This kind of reasoning, while certainly not erroneous (there are nearly 900 different insurance companies in the U.S., each operating with their own benefit packages), has fostered an aura of unknowability that for years has left patients frustrated, confused, and without much leverage with which to push back.
This story, while familiar, is beginning to change: The entrance of newer, nimbler eCommerce retailers and the introduction of legislation like the No Surprises Act are challenging the often-perplexing and frustrating status quo—and signaling a shift toward a more consumer-focused approach to pricing and transparency.
Much of the attention in this movement has been on hospitals, health systems, and health plan organizations. But there’s another shift occurring. Look no further than a neighborhood optical retailer to see this shift toward price transparency in action.
Competition in the vision sector is hot. Optical providers are competing to deliver a best-in-class digital experience as the new edge in the industry. If a consumer can track every step of their pizza after it’s been ordered or see the wait time for their haircut, why can’t they do the same with their eyeglasses?
A slew of eCommerce retailers such as Warby Parker and Zenni have entered the space to deliver on the promise of a simpler patient experience and upfront pricing. While these companies don’t take insurance, their price clarity is enticing consumers to forgo using their complicated benefits and instead choose a product delivered to their door for an upfront price.
This transparency, however, is only an advantage so long as traditional optical retailers and vision providers continue to do nothing to improve in this area. Those companies need to invest in digital products and services aimed at improving the consumer experience across the board if they want to withstand the barrage from new competition.
For the vision sector, which is simpler compared to traditional medical insurance and its 10,000+ CPT codes, price transparency should include a clear explanation of what a patient’s insurance benefits cover compared to the costs for a vision exam and/or a pair of glasses.
The average pair of glasses in 2019 cost $231, an amount most would agree is hefty. While it sounds like a lot of money compared to Warby Parker’s “starting at $99” tagline, most insurance benefits would cover a large portion of that $231 bill. The only issue is that it is often unclear what the final tab will be, or whether the consumer truly maximized their benefit, potentially leaving consumers feeling that all-too-familiar sense of uncertainty as they shop for what they need or regretting a purchase that ended up being more expensive than they anticipated.
This begs the question: What good is an insurance benefit if the consumer doesn’t understand the buying power that comes with it? That’s the exact situation that players like Warby Parker and Zenni thrive on—and why their offerings are so attractive to consumers.
Nearly half of the 5,000 consumers who participated in West Monroe’s 2022 Be Digital Survey cited simplicity as a consumer experience priority. Companies that successfully transition to a truly digital operating model are putting the end user at the center of everything and are making sure the consumer experience is fluid, connected, and clear. This is especially true in the healthcare industry, where consumer loyalty can hinge on simplicity and convenience, even as those virtues are hard to come by.
Long-standing optical retailers trying to compete in this new age will need to leverage their integrated ecosystem to deliver an end-to-end consumer experience. Under this model, all parties (carriers, providers, and consumers) mutually benefit from a system that is transparent and easy to navigate.
Imagine if a doctor could see your insurance benefits in real time, letting you know what your exam is going to cost and whether you can afford that extra retinal imaging. Then, once you step out onto the retail floor to pick your glasses, the associate helping you can see what each frame would cost out of pocket, and what you’ll owe for the lenses plus any add-ons you need based on your prescription.
Does this sound too good to be true? This is what the vision sector is gravitating toward, with the goals of no more sticker shock, no more buyer’s remorse, and a consumer that leaves the store knowing they maximized their insurance benefits.
It’s easy to see why this scenario would be great for consumers and providers, but what’s the incentive for the carriers? When the goal is membership, putting the focus on the member experience should be common sense. Providing a simpler view into benefits means increased consumer satisfaction and more leverage when attracting new employer groups. In addition, sharing data between carriers and providers can improve revenue cycle management operations like claims processing, leading to fewer consumer complaints and lower overhead.
Mark Popp, VP of Transformation at Visionworks, has spent a significant portion of his tenure in the vision industry focused on simplifying how consumers use their benefits. “The vision industry is quickly shifting its focus to consumer experience to address the lack of pricing transparency. We are working collaboratively with our insurance partners, software developers, and industry leaders to shape a better consumer experience.”
The vision sector has the potential to be one of the most transparent segments of the healthcare industry, but carriers and providers must continue to work together to demystify insurance benefits to enable better consumer experiences and transparent pricing.
Consumers will reap the benefits of a complete understanding of their own buying power, enabling them to make well-informed choices about where and when they use their benefits. In the end, all parties benefit from being able to see the big picture.
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