The state's largest health insurer has launched a tool to help members compare prices on procedures, and it plans to pay consumers for choosing lower-cost providers.
"There's a lot of confusion around the health care system for the users of it," said David Hochheiser, a senior vice president for Blue Cross and Blue Shield of Louisiana, which covers almost half of the insured people in the state. "Getting information that allows them to better understand the relative prices ... really starts to put some of the power back in the consumers' hands."
The SmartShopper software uses Blue Cross claims data to show the insurance company's members the prices and, just as important, the price differences for more than 300 inpatient and outpatient procedures. Price comparisons are available for everything from imaging and cataract removal to spinal surgery and rotator cuff repair. Customers can access the information online or by calling (866) 217-5282.
UnitedHealthcare, the state's second-largest health insurer with 14 percent of the market, is the only other major insurance company in Louisiana that offers members such a price tool.
UnitedHealthcare has been offering members pricing guides for more than a decade. Nationwide, its members used transparency resources to help make choices on about $4.4 billion in health care spending in 2016, up from $3.7 billion in 2015. Members who use the price tool before getting services paid 36 percent less on average than those who didn't.
Jeff Drozda, CEO of the Louisiana Association of Health Plans, said insurers' efforts to arm consumers with price transparency tools are a positive move forward.
"It's these sorts of innovations that have got to take place," Drozda said. "With all the things going on in Washington right now, it really is incumbent upon the health plans to step up our game and be part of the solution."
Public health advocates like the Robert Wood Johnson Foundation have long said that price transparency lowers costs. For example, in the first two years after the California Public Employee Retirement System implemented such "reference pricing," the system saved $7 million just on colonoscopies.
Craig Hankins, UnitedHealthcare's vice president, digital, said the tools allow members to get personalized estimates that show how much the plan pays for a procedure and what the member's out-of-pocket costs will be.
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But UnitedHealthcare also has integrated cost information into basic searches when members check to see if a doctor or hospital is in their network, Hankins said. So when members look up a doctor, they will see a tab with costs for common services.
Integrating cost data into the search is one of the many factors UnitedHealthcare makes available to members considering a health care decision, Hankins said. Members don't have to seek cost information. It's right in front of them.
Hochheiser, of Blue Cross, said the point of SmartShopper isn't so much saving money as helping members make informed decisions.
Still, Blue Cross is encouraging members to use lower-cost providers. With cash.
Patients who use SmartShopper to pick lower-cost providers will automatically receive checks for $50 to $150. The amount depends on the price differential and the procedure. Blue Cross will pilot the program with some large employers in the fall. If that goes well, the insurer eventually could offer the incentive to all its customers.
In Louisiana, as in the rest of the United States, prices for the same procedures can vary widely. A SmartShopper search showed that a lower limb MRI in the Baton Rouge area ranges from a low of $441 to a high of $2,391. In New Orleans, the same procedure ranges from $439 to $1,342.
Blue Cross says the prices serve as guidelines. They are based on the benefits of the most common health plan, a preferred provider organization, and don't reflect what each person will pay.
Hochheiser said Blue Cross doesn't have estimates on how much SmartShopper could save consumers, employers or the insurer.
There is strong evidence that transparency lowers costs, Hochheiser said. But he admits it will be difficult to tease out transparency's impact from the many other efforts underway to control costs.
Still, if enough of the 1.6 million people Blue Cross covers use the tool, the insurer might bend the health care cost curve, company officials say.
Blue Cross economist Mike Bertaut said about 40 percent of the people who get health coverage through their employer are in plans with a family deductible of at least $3,000.
"If we can just give them the data ... if it just steers them to the lower-cost providers, think of the pressure it puts on" the highest-price provider, Bertaut said.
Catalyst for Payment Reform, a nonprofit supported by large employers, recommends that more than half of nonemergency services be shoppable, Project Assistant Lea Tessitore said. Companies should make sure their workers know about the tool and how to use it when they are having "a type of shoppable care," like a nonemergency surgery or primary care office visit.
That last part is important because price tools, at least in the early stages, don't always lead to lower health care spending. A 2016 study in the Journal of the American Medical Association compared the spending of 150,000 workers with access to a transparency tool over two years with 300,000 workers who did not. Only 10 percent of workers used the tool at least once the first year, and 20 percent in the second. The study failed to find "meaningful savings" associated with a price tool.
In fact, the study's authors say price transparency could increase spending if patients connect higher prices with higher quality, the same way they do with cars, food and houses.
Although it's hard to calculate the exact savings from price transparency, it's possible to determine whether a price tool will generate cost savings by counting how many people use it, she said.
Hochheiser said Blue Cross is aware of the generally low usage rate for price tools. The company is hoping to boost utilization through incentives. Blue Cross also will focus its promotion efforts on large employers, a strategy the company hopes will increase shopping.
It's a win-win, Hochheiser said. Using SmartShopper saves employers and their workers money on medical costs.
Scott Wester, CEO of Our Lady of the Lake Regional Medical Center in Baton Rouge, said transparency, or shared decision-making with providers, is especially important given "the extraordinarily high deductibles" that consumers face.
It's difficult to say what impact price transparency will have on the hospital, he said.
Cost is part of the care equation, but it shouldn't be the "absolute decision-making tool," Wester said. People consider many factors, including quality, in making health care choices, he said.
The Lake has always trusted that patients can have those conversations with their doctors, he said.
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A 2016 survey by Deloitte, a consultant and financial services firm, found that the top priority for consumers was the health care provider relationship. Price was secondary.
Dr. Carol Patin, past president of the Capital Area Medical Society, which represents physicians, said patients have become more involved in their care and better informed about it over the last decade.
The information contained in insurers' explanations of benefits has helped patients learn where the various costs come from, Patin said. The data also have reduced some patients' belief that physician fees are the major cause for high health costs.
"So I think this is the next step in providing patients with information so they can make good choices about where they want to be, just like any other competitive service or competitive item for sale," Patin said.
Blue Cross and Blue Shield of North Carolina has had price transparency tools for members and the public for more than five years. But the insurer can't pin down the savings the pricing tools have achieved.
"I have seen some evidence, but I wouldn't say absolutely we've seen a decrease in the cost of care," said Phillip Edwards, a principal strategic adviser. It's more that transparency has helped slow the increases, he said.
In some cases, some providers, particularly with services like hospital X-rays, have reduced prices, he said.
"But sometimes they squeeze the balloon in another place. That's why I can't say it went down," Edwards said. "But I do think they are more sensitive to some of the variability in some of the individual service lines."
Hochheiser said Louisiana Blue Cross let providers see the transparency tool in February, and some have asked how they could avoid being "disadvantaged" by the price list.
Patin isn't one of those providers.
She said doctors and other providers must be careful when it comes to deciding on prices with an insurer or another provider because that can be misconstrued as price fixing.
Tessitore said most price tools include quality measures, like whether a provider achieves the desired outcome for a procedure.
Catalyst for Payment Reform said it believes the next step is to create an overall value rating that incorporates quality and price.
Blue Cross spokesman John Maginnis described the SmartShopper tool as health care transparency 1.0.
The tool will be continuously improved, with the data refreshed every six months, he said. The current version doesn't include information on quality of care, nor is it customized to each member's health plan. But those improvements will be looked at.
Louisiana is mired in a health care cost crisis, Maginnis said. The state ranks high in terms of health care spending but low when it comes to people's health.
In 2013, Louisiana had six of the 10 highest-spending Medicare markets — Monroe, Alexandria, Lafayette, Shreveport, Baton Rouge and Metairie — in the country.
Blue Cross, as the oldest and largest health insurer in the state, felt it was important to take a leadership position in beginning to handle the cost crisis, Maginnis said.
"We've taken what I think is a large first step in doing so," he said.