A health-insurance company’s “price transparency program” succeeded in driving insured patients to less-expensive MRI facilities and away from hospital-based facilities, according to an article in the current edition of Health Affairs.
The insurer was WellPoint. One of its subsidiaries commissioned the study, and another conducted it. The study looked at more than 100,000 members of WellPoint health plans from 2010 through 2012. About 61,000 had health plans that included a program “that makes health plan members aware of MRI imaging costs and proactively shares relevant information about alternative providers close to the member’s home,” according to a WellPoint news release.
When a physician ordered an MRI at a facility that WellPoint considered expensive, the plan member received a telephone call suggesting imaging facilities that charged less. Consumers were not required to choose a cheaper option. But many apparently did. During the study period, the average MRI price decreased by $95 for those 61,000 members. The subjects also decreased their use of hospital-based MRI facilities from 53 percent of their visits in 2010 to 45 percent in 2012.
For about 44,000 WellPoint members whose health plan did not include the “education program” that notified them of lower-priced alternatives, the average MRI price increased by $125.
Brandon Cady, president and CEO of AIM Specialty Health, the WellPoint subsidiary that both commissioned the study and administered the education program, said the program showed the benefits of price transparency:
As costs have risen, so has member cost share, but members don’t typically have efficient ways of comparing prices before receiving health services. This program reinforced to us that once members are made aware of similar services at a lower cost, they will often choose the lower-cost service.”
Of course, insurance-company support for price transparency can be selective. Many insurers balk at revealing the prices they negotiate with members of their provider networks, considering those figures to be trade secrets. Many contracts forbid providers to disclose prices.
So consumers have turned to crowd-sourcing to create online price lists. Two California public radio stations, KQED in San Francisco and KPCC in Los Angeles, have teamed with the online price-transparency project ClearHealthCosts to launch PriceCheck, billed as “a community-created guide to health costs.” The initiative, launched in June, allows California consumers to pool information about what specific providers have charged them for specific services.
So far, PriceCheck has focused on costs for two imaging procedures: mammograms and back MRI. As of a KQED report last Friday, back MRI prices in San Francisco ranged from $575 to $6,221. Interestingly, when ClearHealthCosts founder and CEO Jeanne Pinder described the project on The Health Care Blog, most of ire in the online comments was directed at insurance companies, not providers.
In health care at the moment, much is uncertain. We can be pretty sure, however, that price transparency and other methods for squeezing costs out of the system will proliferate—and that providers will be among those squeezed.
Related CME seminar (up to 13.25 AMA PRA Category 1 credits™): UCSF Musculoskeletal MR Imaging