Analysts agree that one reason hospital compliance with the CMS’s Hospital Price Transparency Rule remains so low is that CMS has not provided a template for formatting pricing data.
This means that, to comply with the rule, hospitals must not only do the work of gathering, publishing, and updating their data but also the work of figuring out how to format data so that both the consumer-friendly and machine-readable versions comply with the rule’s many requirements.
It also means that, in the absence of guidance from CMS, there’s an opportunity for hospitals to create and monetize such a template.
The Opportunity: Comply & License
To date, CMS has yet to engage in any serious enforcement of its Hospital Price Transparency Rule. So while most hospitals in the country are not in compliance, CMS hasn’t issued anything more than a warning letter to correct that status.
With the burden of compliance so high and the penalty for not complying so low, it’s easy to understand why compliance rates are so bad. But there’s actually a bigger opportunity here than avoiding fines: driving revenue by licensing or selling access to a usable template.
Compliance as a Revenue Driver
Here’s how it would work:
- Hospital A decides to dedicate resources to publishing its pricing data so that it’s compliant with CMS’s price transparency rule.
- Hospital A then creates a template based on its solution that any other hospital could use to format its own data.
- Hospital A sells or licenses its template to other hospitals, thus recouping its initial investment in compliance and possibly even driving revenue from template licenses or sales.
Why the Comply & License Model Can Work
We’ve seen from the software world that selling or licensing a digital product can be lucrative. And the opportunity in healthcare is significant: today, CMS requires just hospitals to publish their prices (and 94 percent still haven’t done so in a compliant way). Eventually, though, it’s likely that other healthcare providers (clinics, specialist offices, offices of independent practitioners, etc.) will also have to publish prices.
Most healthcare organizations simply aren’t staffed to aggregate, format, and publish large data sets. They need an affordable way to facilitate the process – which is exactly what a template could provide.
This model is why it’s so easy for small businesses to launch right now: services like AWS, Square, and Etsy make it easy for anyone to access server space, accept credit card payments, or get their physical goods in front of a large audience. These companies invest money in building and maintaining infrastructure, then charge smaller entities a fee to access it. It’s a win-win.
Another Possibility: The Public-Private Model
There’s also precedent for an ongoing public-private partnership for the organization that gets this right.
Look at the National Flood Insurance Program (NFIP), the nation’s federally funded source of flood insurance. It relies on private partners for several functions, including marketing, selling, distributing, and servicing the policies it sells and even evaluating flood risk around the country.
As compliance requirements evolve, CMS may seek such a private-sector partner to ensure it’s facilitating compliance – and transparency – to ensure innovation and cost controls in the healthcare industry.
How We Can Help
As we mentioned, most hospitals aren’t staffed to create the kind of template that could turn price transparency compliance into a revenue driver.
But Healthcare Data Analytics may be able to help. Our consultants can work with your hospital to publish your pricing data in a compliant format, and we can even help you develop a template you could sell or license to other organizations.
Not interested in licensing a price transparency template? We can still help: use our compliance search engine to find out what your hospital’s current compliance score is or get in touch to find out what your competitors are paying.