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You'd Better Shop Around
Published Tuesday, October 6, 2015


New Hampshire recently received top grades for its shopping experience. No, we’re not talking about tax-free shopping for shoes, clothes, household items and liquor. We’re talking about X-rays, MRIs, blood work and doctor visits.

New Hampshire is the only state to receive an A on the July 2015 Report Card on State Price Transparency Laws, released by the Catalyst for Payment Reform and Healthcare Incentives Improvement Institute, two nonprofit health care advocacy groups.

The main reason NH nailed that grade is NHhealthcost.org, a free, public and searchable website listing prices for more than 30 common outpatient procedures (based on claims data) for both insured and uninsured patients. The site also breaks out data by insurer, location and type of health plan.

For the 100,000 or so uninsured NH residents, the site offers cost estimates that are only available by calling individual hospitals or doctors, a time-consuming process. For the insured, payment data is searchable by location and, soon, by quality. For both insurers and practitioners, the data is a goldmine, as it lists competitors’ prices, which could potentially open the market to NHpricing pressure.

Data Goldmine
The people who build NHhealthcost.org start by examining reams of claims data from 600,000 of NH’s 800,000 commercially insured residents. That data is then fed into an All Payer Claims Database, or APCD for short. The Granite State is one of 11 states nationwide with such a database and one of only a few with a state law mandating that insurers report all claims. There are 17 other states with searchable cost databases, though the Catalyst for Payment Reform and Healthcare Incentives Improvement Institute states that many of those have few searchable procedures and questionable accuracy.

New Hampshire uses its data trove in two distinct ways: one is aimed at consumers and the other at practitioners and insurers. On the consumer side, NHhealthcost.org’s searchable pricing is bundled, meaning it includes such ancillary services as office visits and lab work. For the uninsured, information about discounts offered by practitioners is also available. For practitioners and insurers, data is broken out into median charges (what practitioners charge) and median prices (what insurers pay) for 914 individual procedures. Those are further broken into 6,769 median prices based on the insurer and plan type for each procedure. Self-insured businesses (those that take on the risk of paying claims themselves instead of passing that on to an insurer) have an incentive to find the lowest priced options, says Steve Norton, executive director of the NH Center for Public Policy Studies in Concord. These companies may also be using this data to shop for an insurer.

“We have potentially more data than any insurance company because we have data from multiple insurance companies,” says Tyler Brannen, health policy analyst for the NH Department of Insurance. “The website was designed for consumers, but we knew health insurers and providers were using it just as much. Our assumption is if the markets function more efficiently, then the providers who are the lower cost will be rewarded if they also provide high quality.”

Brannen says that for insured residents, searchable websites created by their insurance provider will be more accurate. The state’s three largest insurers, Anthem, Cigna (which is being acquired by Anthem) and Harvard Pilgrim, all have such sites, but for uninsured residents and, as a matter of policy, having the data available from the state is crucial, he says. The state will also be expanding the site to include quality measures from the Centers for Medicare and Medicaid.

While NH is a pioneer in transparency, consumers here have Massachusetts to thank for the detailed insurer websites. A Massachusetts law required that as of Oct. 1, 2014 all insurers covering Massachusetts residents were required to post prices for procedures online. Anthem, Cigna and Harvard Pilgrim all operate in the Bay State. Harvard Pilgrim’s pricing tool, Now iKnow, went online in December 2013 and Cigna’s in 2012.

Does Data Change Things?
With regard to the efficacy of the system, some policy experts are skeptical. Norton says the consumer value is limited when it comes to price accuracy. “There is a reason these types of systems haven’t transformed the world of cost decision making. Five to 10 years into transparency we’re still evolving. This is more likely to have an impact on self-insured organizations who define their own benefit,” he says.

Norton says for many people there is little incentive to find a lower-priced procedure as the savings is not worth the hassle of researching and switching providers. Also the costs for expensive procedures often exceed deductibles. The latest data (2013) from the NH Insurance Department shows 28 percent of those with commercial insurance through a NH employer had no deductible while 32 percent had a deductible of more than $2,000. In total, 16 percent of people have a high deductible health plan where all services besides preventative ones are subject to the deductible. And deductibles keep rising, Brannen says. A survey by the Kaiser Family Foundation found that the average deductible for individual coverage in employer-sponsored plans nationwide was $1,217 in 2014.

There is another wrinkle that stymies shopping by price tag. Some HMO plans with a high deductible include financial incentives directing customers to specific providers. People are less likely to shop around at that point and go to the lowest cost option specified by the insurance company.

Another challenge is that consumers don’t know where to find cost information. And asking one’s doctor can result in a blank response when he or she doesn’t know the answer. A survey by insurancequotes.com last year found that 86 percent of Americans don’t understand what a health savings account (HSA) is or how it must be used with plans that have a deductible of at least $1,250 for individuals and at least $2,500 for a family.

But that may change as more people fall into high deductible plans, which the nonprofit American’s Health Insurance Plans reports has grown 15 percent annually since 2011, a trend  that is expected to continue. And those with high deductibles, and specifically HSAs, are most likely to shop by price as they foot the bulk of the bill.

Market Opportunities
Shopping around can result in huge savings, and that’s what spurred serial entrepreneur Mark Galvin to launch MyMedicalShopper.com in Portsmouth last year. The site syncs with a person’s individual health insurance and provides cost and quality data for more than 7,500 tests and procedures. Galvin’s site is targeted at employers, who pay $60 annually per employee for access to the site. Galvin’s company provides training to employees on how to use the site, including assisting employees with setting up the app on their mobile phones so they can use it while in the doctor’s office to research prices for a suggested procedure. His company also sends emails to members to keep the site top of mind.

“It’s a spectacular benefit to give to your employee if there is a deductible associated with your health care,” Galvin says. And while NH’s three largest health insurers all have price shopper tools, he is skeptical they go the “extra mile” to ensure ease of use, including informing and training employees on search tools. “As a company, this is all we do, drive cost transparency.”

For example, Galvin says, his app shows the cost for a knee MRI ranging from $499 at Four Seasons Imaging in Bedford and Nashua to $2,997 at Wentworth-Douglass Hospital in Dover. (The app uses the average cost of all regional health care plans and is therefore weighted 60 percent to the state’s largest provider Anthem.) MyMedicalShopper.com also has three quality measures: how many times a facility performed the procedure in the last year, a star rating by members and federal data from Medicare surveys of members. In this case, the lowest-cost facility had performed 29 knee MRIs while the highest-cost facility had performed 40.

MyMedicalShopper.com currently has 3,000 subscribers through contracts with employers. Galvin now has eight employees and will be expanding services to employers in Maine and Massachusetts by year end. Employers who subscribe receive regular updates on insurance costs (something people with insurance don’t see on the state site) and they don’t have to retrain employees on how to search if they end up switching insurers, which Galvin says is a huge benefit.

The Price of Care
As deductibles rise and pressure mounts for patients to be better-educated consumers, insurers have implemented various ways to incentivize low-cost, high-quality providers. Some insurers now offer tiered networks where choosing providers in a given tier comes with a lower, or higher, price tag. Others give gift cards or cash rewards for choosing a provider they deem to be high quality and low cost. Still others offer a copay for imaging services, but only if you choose a high quality provider. All of those programs lower patient costs, but they do not provide full price transparency. That has only come with the development of searchable online databases that measure cost and quality.

Anthem, Harvard and Cigna customers can sign in to the insurers’ websites, enter their account information (deductible, copay amount, network limitations) and look up a procedure based on cost, location and quality (designations earned from the insurer as well as federal designations of quality, such as being a medical home provider and managing all aspects of a person’s health and wellbeing).

The pricetags are surprisingly varied. Through Harvard Pilgrim’s “now iKnow” portal, the cost of an ankle X-ray within 25 miles of Manchester ranges from $49 at Convenient MD in Concord to $294 at Concord Hospital in Concord. Using myCigna, that same ankle X-ray ranges from $34 at Metro West MRI in Andover to $257 at St. Joseph’s Hospital’s facility in Milford. The prices are usually bundled, meaning they include all costs associated with a procedure, such as labs or office costs, which are broken down in a separate tab. The state site offers both bundled rates and straight procedure costs.

Comparative data searched through NHhealthcost.org yielded different high- and low-cost providers and specific costs. That difference is because users of the state site can only choose to search prices within an HMO plan or “other” plan, which makes it less accurate than insurer websites. The state website did provide accurate rates for procedures for patients without insurance. Business NH Magazine searched for the cost of gallbladder surgery and found the lowest provider, Speare Memorial Hospital in Plymouth, charged $8,734, which included a 23 percent discount the hospital provides for self-pay, a common offering to the uninsured. A call to the hospital confirmed this number.

The data on all of these sites has limitations. A provider will not show up as an option if it has a low volume of service for a given procedure or too much variation in patient costs to calculate a reliable estimate. For example, Convenient MD, which ranks lowest for cost of an ankle x-ray through Harvard Pilgrim, charges $150 for an x-ray and office visit, with a maximum of $250 for anyone without insurance. That should have placed them, at best, second, or, at worst, fourth, on NHhealthcost.org. But they did not show up as an option.

Changing the Price Curve
While the price comparison tools are available, there is little data on the effect and use of these various transparency sites. Galvin says there is at least $600 million annually in savings available to NH consumers if they shop around. But do they? Sue Amsell, senior product manager for Now iKnow, says more than 5,000 people have used Harvard Pilgrim’s price shopper tool. But that’s out of 850,000 members, of which 125,000 are in NH.

MyCigna, which also includes a mobile app, reports about 10 million visits to the price tool, roughly a third of the 31 million website and app visitors.

Cigna has 12.8 million commercial members in the United States. For those that do use the tool, office visits and imaging services are top searches.

This trend stands to lower costs. Not only do patients save money, but Anthem says providers have been lowering costs in order to be deemed a high quality, low cost provider within their network. Denise McDonough, regional vice president of sales, says providers lower costs so they do not show up as an outlier.

The state does not have data on usage, but Brannen says he knows the cost comparison tool is being used, especially the Excel table of services sortable by carrier, procedure and type of plan that requires an email to download. The state site is also moving beyond just data to education.

“We will provide information in a neutral way on how they can use their health benefits most efficiently,” he says. “We can tell people information without bias.” This includes understanding that once you’ve used your deductible, all services are covered and that while a physician may refer you to a specific doctor or hospital for a test or procedure, you can choose other providers. Often, he says, physicians refer patients to colleagues they prefer, but they could also refer you to other doctors if you prefer it.

Francois de Brantes, executive director of the Health Care Incentive Improvement Institute that lauded NH for its state website, says the existence of NH’s site and its neutral stance is critical to providing a wide breadth of information.

For example, he says, employers may want to know average prices by insurer as they consider what plans to offer, or people may be choosing between their own or a spouse’s plan and want to know average procedure price data to compare. Plus, while NH’s largest insurance carriers have searchable websites, de Brantes says many insurers do not.

“Can a state set a standard for all payer claims database system so the insurers will have a standard they must meet? The answer is yes,” de Brantes says, noting, though, that is not the norm. “Today you can go to most states in the Union and you can’t find this information.”

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