Indiana University (IU) Health in Indianapolis has built one of the most comprehensive cost estimators for patients of any hospital system, and is seeing a positive effect on its patient satisfaction scores.

The health system receives 50,000 requests a year for price estimates and can provide cost estimates for every inpatient and outpatient service at each of the system’s 16 hospitals and every outpatient facility. Estimates are given by phone, in person, or online, and 95% of estimates are completed within 24 hours, says IU Health Senior Vice President and Chief Financial Officer Jennifer Alvey.

The cost estimator tool is patient-specific, as opposed to providing a general estimate for a type of procedure or treatment, she explains.

“We work with a patient on what types of services they need, what their physicians have said they need to do, and we work with them to capture every part of that service,” she says. “If they’re planning to do a hip surgery, we make sure we take into account the surgery, the physician visits, the radiology, the lab, and we put the entire cost in. We also then work through their insurance as it exists at that moment to determine their out-of-pocket costs. If necessary, we can discuss the options in terms of what they would owe up front and a payment plan.”

The cost estimator tool enables the IU Health staff member to use information within the system that provides CPT codes, with the aid of a physician who works with the cost estimator group, and also provides access to the patient’s insurance information. Six staff members form the team that responds to cost estimator requests. Most members have worked in case management. They provide insight into the various costs associated with different types of care.

“It’s a sophisticated electronic system that facilitates this service, but it’s also about 50% dependent on an individual knowing where to go look for information about this type of procedure or healthcare treatment,” Alvey says. “It is not a simple, straightforward electronic system where you plug in a few bits of information and it spits out an estimate. Putting together pricing is complicated and more so when you want the patient-specific information that we provide.”

IU Health compares its estimates to the final charges on its consolidated bills. Alvey says 90% of the estimates are within 5% of the estimated patient responsibility. IU Health’s Net Promoter Score was 76 systemwide in 2019. Alvey says the cost estimator tool contributed to that achievement.

“It’s important as a healthcare system to build toward a comprehensive billing process where everything comes to one location. We see a lot of healthcare organizations around the country that do physician billing separate from facility without one integrated process,” Alvey says. “We think of it as a patient’s financial journey, and do the cost estimate well at the front. You have to do it well at the end also. You have to start there. If you can’t show it all on one bill, it’s hard to do the estimate up front.”

Alvey also emphasizes the importance of capturing patient-specific data, particularly now that so many patients carry large deductibles. Providing general estimates of overall expenses and out-of-pocket costs can engender significant resentment when the patient’s experience is different, she cautions. That can work to degrade patient satisfaction rather than enhance it.

“You also have to have the personal assistance of someone who is familiar with the healthcare system. If you just offer an electronic tool and ask patients to plug in the right information, you are not going to be able to provide an estimate that is specific enough to be useful to that person,” Alvey says. “When the patient needs a CT scan, there are lots of different types with different costs. The patient is not going to know all those details. It takes that personal touch, and that’s where we’ve put in our effort.”


  • Jennifer Alvey, Senior Vice President and Chief Financial Officer, Indiana University Health, Indianapolis. Phone: (800) 248-1199.