Why would a consumer overpay for any health care service?  This happens all the time because consumers have no idea what they are being charged for a service, and they have no idea what the fair price is for this service.  Since our health care system doesn't provide consumers with meaningful tools like Amazon.com, Expedia.com or Travelocity.com to research and compare prices/services --consumers are basically on their own to determine the best value.

I just read about a consumer that paid $1900 for an MRI at Wake Forest Baptist Medical Center.  The consumer has BCBS health insurance so we are not talking about an inflated price for someone that is uninsured.  About six months ago I conducted research on "the quest for the true price for an MRI".  I ended up researching 50+ tools available to consumers to help determine the price of an MRI at many providers around the country.  The results:  an MRI (in this example for a knee) can cost a consumer anywhere from $600 (in Milwaukee at SmartChoice MRI) to $3500 (Dartmouth Hitchcock Medical Center in New Hampshire) - for the exact same diagnostic test. An MRI is an MRI is an MRI.  Isn't it?  So why the huge variance in price?  In fact, if you are charged more than $1000 for an MRI I would suggest you negotiate down the price, offer to pay cash at time of service and start negotiating with the price that Medicare reimburses providers for an MRI- which is $463.  You can download a copy of my research here.

To help you make the most of your health care dollars and find the best value for routine services like MRIs, x-rays, mammograms, vaccinations, office visits, lab tests, vision and dental services, I suggest you use OutofPocket.com to compare and share prices of health care services so you know what others are paying for similar type of services.  Information can be powerful.  

One excellent reason to purchase health insurance is so that you do not have to pay full price (list) for services.  When you have health insurance, you get the discounted (negotiated) price for services that the insurer has negotiated with the health care provider.  If you don’t have insurance, then you are on your own to negotiate a price with the health care provider – and you should definitely ask the provider for a discount. 

Insurers and health care providers consider t the “negotiated prices” proprietary information that they don’t want this price publicized.  These negotiated prices are what insured consumers are expected to pay for services, but they are kept a secret and it’s difficult, if not impossible, to find out what these prices are until after you have visited the provider. 

From what I have heard, Blue Cross Blue Shield negotiates the best discounts from provider list prices.  Where BCBS negotiates 60% off list, other insurers negotiate 40% off list.  Knowing this can help consumers make informed decisions when purchasing health insurance.

Office visit list price:  $100

BCBS negotiated price for office visit: $ 40

Other insurer negotiated price for visit:  $ 60

It’s also very interesting that a provider can have up to 100 different prices for the exact same service, one for each type of insurance they accept.  Most price differences have more to do with a doctor’s negotiation power than with the quality of care from the provider.  Wouldn’t it be nice to know up front what providers offer the best value?

Here’s an interesting approach to exposing “true” health care prices (the negotiated price providers really charge for their services).  As you well know, most providers and health plans are unwilling to share pricing information before services are delivered.  In a bold move, two innovative health care providers are collecting contracted prices for services from consumers - for a reward. In April 2008, Alliance Community Hospital in Ohio launched a program offering consumers $100 if they share their EOBs so the hospital can find out how much health insurers paid for health care services received at rival hospitals. They received a lot of participation and this program is still active today. Just recently, Wuesthoff Health System in Florida announced a new transparency initiative offering consumers $100 in gas cards if they share cost information on health care services from providers in the surrounding area. This is an attempt to provide consumers with meaningful information on the true cost of health care services.

Transparency brings good things for consumers like:

1. lower prices
2. more innovative services
3. expanded choices
4. better patient care

Wouldn't it be nice to see more providers sharing true price information with consumers?

Selecting the right doctor

Consumers can find out about a doctor's experience and a hospital's success rates, and even find information on what these services cost.  First, get to know your doctor.  Do some research to find out what other patients have to say about the doctor.  Personal recommendations carry a lot of weight and people trust what other consumers have to say.  Check if your doctor is board certified.  Search the American Board of Medical Specialties to find out.  Make sure your doctor has done this procedure before.  Use Vitals.com to find out how many times a doctor has performed certain procedures in a year, and look up historical data to determine if there are any sanctions or malpractice claims.  If you cannot find this information on public sources, call the doctor’s office and ask. You want a doctor that has lots of experience.  Know the price before you visit the provider.  If you have out-of-pocket expenses, it’s well worth your time to call your doctor and your insurer to determine the amount you are responsible for.

Selecting the right hospital

Hospitals provide a lot more performance data.  Just like doctors, hospitals get better with experience.  You can use Vimo.com to find out how many times a hospital has performed a procedure.   RevolutionHealth.com also provides similar information.  HealthGrades is an excellent source of quality ratings for hospitals. You can purchase a report from HealthGrades to obtain cost and quality information. 

I am pleased to announce the new release of OutofPocket.com, version 2.0.  Our new search engine enables consumers to look-up prices for health care services, and allows providers to list their prices/services in the directory - free of charge.  In addition, the search engine features expanded search technology and searches for health care price data across other public price transparency tools.

I welcome all your feedback and comments on this new release and I would appreciate if you could help us spread the word.  As you know, the more people that contribute and use this tool, the more powerful it will become for everyone.

Thank you for all that you do to help promote health care price transparency. 

NEW FEATURES IN OUTOFPOCKET.COM VERSION 2.0

(1) Enhanced search engine provides more relevant search results

(2) Easy for consumers to post/share their own visits and prices they paid for services

(3) Comprehensive search results - searches other websites that publish pricing and websites that offer price transparency tools

PRICE DATA COLLECTED FROM MULTIPLE SOURCES

·         Providers can submit price lists for their services

·         Consumers are invited to post/share prices they paid for actual visits, along with their personal recommendations on the provider

·         Claims Data from Businesses, Health Plans or TPAs

·         Government CMS Medicare payment data

·         Websites that publish prices for health care services including hospitals, diagnostic testing facilities, clinics and physician practices

·         Price Transparency Tools on public websites including health plan tools and state price transparency tools

BENEFITS for BUSINESSES

·         Load your claims data into OutofPocket.com to enable your employees to search for their true out-of-pocket costs for specific service

·         Employees can use OutofPocket.com to search for prices for specific services in your network plan

·         Encourage employees to collaborate and post prices they paid for health care services, to share these good deals with other employees

·         Eliminate providers that overcharge - Use OutofPocket.com to direct your employees to affordable, low-cost providers

·         Avoid providers with poor performance by encouraging employees to share recommendations on provider visits

BENEFITS for CONSUMERS

·         Look-up prices, comparison shop and find the best value for routine health care services in your neighborhood

·         Tool makes it easy for you to post/share prices you paid for actual services with other consumers

·         Share your recommendations on a specific provider with other consumers

BENEFITS for PROVIDERS

·         Add your true prices/services to the directory – free of charge

·         Consumers can easily find your services and link to your website

·         Include additional information about your practice, services

·         Search results links directly to your website

·         Provides additional exposure for your services

A recent article in the March issue of Consumer Reports identifies some contributing factors to the high cost of health care.  The article High Health Care Costs discusses some of the factors including:

1. Hospitals and doctors  - in our current health care system financial incentives are given for costly interventions rather than preventative care

2. Drug companies -  rise in prescription drug spending and large amounts of money being spent on pharmaceutical advertising (have you seen all the commercials?)

3. Insurance companies - increase in administrative and marketing costs contribute to inflated premiums

4. Politicians and government regulators - policies affect the bottom line

5. Lawyers- malpractice insurance premiums and defensive medicine (overuse of diagnostic tests)

6. Health care consumers - modifiable behaviors such as poor eating habits, lack of exercise, and smoking, all contribute to poor health

Here’s my recommendation.  Some of these factors consumers have no control over, but two of these factors consumers are definitely in the drivers seat.  First, healthy lifestyles result in healthy people. Make good choices.  Good health is priceless.  Second, consumers need to educate themselves.  Do your research to help you make informed choices about health care services.  Use tools like OutofPocket.com to look up prices, find the best value and make the most out of your health care dollars.  If you shop for health care services the way you shop for electronics, automobiles, and clothing, you will save yourself thousands of dollars.

Are you paying too much for your health insurance?  Before you go out and replace your current health insurance plan, you really need to do your research to understand the different options that are available for you to choose from.  

Years ago, health insurance was almost always provided by your employer.  The only choice you had to make through your Human Resources Manager was whether to choose plan A, B, or C.  Today, more individuals are now purchasing health insurance on their own.  As the cost of health care continues to rise, many employers can no longer afford to provide their employees with health insurance.  Some businesses are even offering their employees more affordable options that are described with words like “consumer directed”, “high deductible”, and “HSAs”.  What exactly does all this mean to you?  If you have always had traditional first-dollar coverage employer-based health insurance, this could all be very confusing to you.  My advice to you -- before you go out and purchase health insurance on your own, you should get up to speed on some important issues that can save you thousands of dollars and avoid making painful mistakes selecting the wrong plan for you/your family.   Purchasing health insurance requires a level of knowledge that many of us are not comfortable with.  

I just read a book that does an excellent job informing consumers on how to save money on your health insurance.  This easy to read book, Get a Good Deal on Your Health Insurance without Getting Ripped Off, written by Jonathan Pletzke was recently published and is a must read if you are a consumer in the market for health insurance.   I highly recommend this book if you feel like you’re paying too much for your health insurance and want to understand your options.  For $16.45 at Amazon.com your return on investment (ROI) is substantial.  You can save yourself hundreds of dollars a month by becoming a well informed consumer and can avoid making the costly mistakes from purchasing the wrong type of health insurance plan for your family.   The book and accompanying website is available at www.BestHealthInsuranceBook.com. 

Happy Holidays,

Mona

Last week I attended the AHIP Business Forum that was held in Chicago on November 12-14.  The conference had outstanding speakers, and some very interesting ideas were being discussed concerning transparency. 

Pete Neupert, Corporate Vice President Health Solutions Group, Microsoft Corp. shared some practical comments about transparency during his keynote speech.  He described transparency as enhanced customer service.  He also suggested the healthcare industry should start using copies of data since the data is already being collected and the technology already exists.  Peter said data should be shared in a meaningful way.

Some of the challenges and chief concerns for transparency include:

·         Who will be the first mover to disclose this “secret” data

·         Who is accountable

·         Existing cultures within insurance companies are a huge barrier– guts to let go and share data

·         Existing complicated pricing structures (result of the system)

·         Are the motivations in the industry aligned

·         What is our capacity for change

·         Who will develop the standards

·         How will health plans use the information to make it available to members

One of the presentations at this conference was an interactive session, “Preparing for Transparency: What it Means to You” and included lively discussions on transparency.  The discussions included understanding the vision behind a transparent health care system, how transparency promotes competition in a consumer-driven world and practical approaches and tools for achieving transparency.

The session was presented by:

Mark Ganz, President and CEO, The Regence Group

Luis Machuca, President and CEO, Kryptiq Corporation

Guiding Principles for Transparency

1.       Focus on the consumer

2.       Cover members, providers and organizations

3.       Requires historic collaboration across the industry.  Understand the difference between competitive differentiation and common infrastructure

4.       Must be forward focused and relevant and valuable to the consumer

5.       Requires significant culture shift  (control à empowerment)

The closing keynote speaker was Regina Herzlinger, professor of business administration at Harvard Business School, senior fellow at the Manhattan Institute and author of “Who Killed Health Care?” Regina is a powerful speaker.  She fills the room with compelling research statistics, bold statements, and her humor.  Regina is an advocate of market-driven, consumer-oriented health reform.  Her powerful closing statement was, “….the governments micromanagement of the prices of insurers and providers should be avoided, not emulated.  Instead the government should help lower-income people, enforce transparency, prosecute fraud and abuse---but otherwise get out of the way.”  I had the honor of meeting her in person after the event and I mentioned OutofPocket.com to her.  She said my price transparency tool using consumer collaboration to expose true prices is a great idea!