New Methods for Transparency in Healthcare Costs Emerging

As employers shift their healthcare costs and benefit plan designs to high deductible, consumer directed plans, employees are smart to seek out fiscally-sound and effective medical solutions. The days of patients simply accepting the course of their medical care as directed by a physician, surgeon or other caregiver are coming to an end and transforming the healthcare landscape.

One clear signal of that change is the emergence of new companies that act as employee advocates for workers whose employers self insure their medical benefits. Businesses like Castlight Health and Health Care Blue Book are making inroads in this new marketplace by helping to bring medical pricing transparency into today’s healthcare environment.

While many of the major North Carolina insurance carriers have been providing tools that enhance the awareness of pricing for any number of common procedures through “treatment cost estimators,” those tools have not advanced beyond giving general cost ranges and physician effectiveness scores. Similarly, the ranges provided do not give much in the way of transparency since those dollar amounts are based on negotiated contract rates on procedures that are not specific to medical providers. Those “network” rates are confidential as they are used by insurers to sell their competitive advantage over each other.

By contrast, companies like Castlight and Health Care Blue book are using new technology to analyze and decipher a company’s actual historical claims data. This puts the cost of specific treatments of specific conditions on a provider-by-provider network basis into the hands of employees so they can more easily compare prices. Since all claims are de-identified prior to delivery to the employee advocate firms, no personal health information (PHI) is compromised.

There are many difficulties a company like Health Care Blue Book faces in providing its type of service. Challenges lie within the variance of healthcare costs across the United States, which the company shows can range from $600 to more than $3,600 for a colonoscopy. Based on the geographic location of the patient and the specific health plan an employee has, however, a closer range can be determined – one that can help the more cost-conscious healthcare consumer make an informed decision. Of course, it is ultimately the decision of the patient to accept the recommendation, and then it is up to the caregiver to adhere to the researched price.

HCW Viewpoint
Rather than group medical plans simply acting as safeguards to financial ruin in the event of a large claim, being good stewards of employer-provided medical benefits can pay off in the long run for both the business and the employee. Rollover dollars from HSAs, lower overall claims costs, appropriate utilization, higher quality outcomes and many other cost containment measures help reduce premiums for everyone and can help motivate insurance carriers to negotiate a fair price of coverage.

HCW believes that the consumer-oriented websites that yield provider-specific cost data will continue to evolve, making the quality and cost of healthcare more consistent throughout our market. The next step toward pricing transparency will be for health insurers and medical providers to put their pricing and quality measures out in the public space, as opposed to third parties having to collect the data and back into what the discounted pricing is.