Sapphire Digital: Consumer incentives creating cost savings for payers, employers

A man taking cash out of his wallet
Consumer incentives are creating cost savings for payers and employers. (Getty/lzf)

There is no doubt that the huge discrepancies in the cost of care and the rise in high deductibles are forcing consumers to play a more active role in their healthcare coverage. 

“We have high quality healthcare in this country, we just can’t afford it,”says Rob Graybill, vice president of SmartShopper Market Strategy at Sapphire Digital. 

And while pricing transparency is not new in the U.S., consumer usage is still quite low. Graybill believes the big players in healthcare must empower people to act like true consumers and shop around for medical services. 

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Rob Graybill (Sapphire Digital)

So, what will it take to motivate patients to act more like consumers? Graybill says it’s that “a-ha moment” of receiving the first really expensive lab bill that becomes a teachable moment for any person.

Typically, most healthcare consumers go where they have been trained to go—wherever their physician tells them to go. 

“You get a recommendation and make an appointment, no questions asked,” Graybill said. Cost doesn’t often cross the mind of the patient, and the physician community is not one for lengthy conversations about choosing provider services. 

But as the landscape of the industry changes, and more and more physician practices are scooped up by hospitals, doctors may not feel they have a choice but to recommend their affiliated provider. 

So, Sapphire’s goal is to put the right information in the hands of the consumer, at the right time, benefiting all in the industry. 

It’s time for the consumer to stand up and say: “I’m paying, I’ll make my own choice,” Graybill said. 

Of course, savings in the medical practice vary by procedure. One of Sapphire’s top members’ savings is for recommended colonoscopy providers, saving a customer, on average, around $1,100.

Sapphire’s SmartShopper transparency with rewards began in 2010 in New Hampshire, the state with the highest insurance premiums in the nation. Plus, today, the state is led by hospitals, employing more than 90% of all its primary care physicians. 

Flash forward to the present, SmartShopper Savings totaled $4 million in New Hampshire in 2017 and $9 million in 2018—125% growth in savings and incentives. 

Looking at the country as a whole, in 2017, Sapphire paid consumers $2.1 million in SmartShopper incentives and in return, employers and health insurance companies saved north of $17 million. 

“It all starts with consumers understanding that they have a choice and a say in their own healthcare decisions,” Graybill said. The second step is understanding that cost wildly varies but quality does not directly equate with cost.  

Healthcare savings via Sapphire in 2018

Nationwide use of theSmartShopper tool

  • 157% increase in year-over-year total healthcare cost savings
  • 189% increase in year-over-year claims processed 
  • 210% increase in year-over-year incentives paid to patients
  • $545 average savings per case 

Nationwide, most shopped medical procedures

  1. 1. Lab/Blood work
  2. 2. Mammogram
  3. 3. MRI
  4. 4. Colonoscopy
  5. 5. CT Scan

Top savings per procedure

  • Spinal fusion—$11,816
  • Back surgery—$5,900
  • Knee replacement—$5,803
  • Kidney stones—$5,543
  • Sinus Surgery - $5,117

Top savings overall for payers, providers, employers

  • Colonoscopy—$3.2 million
  • MRI—$2.7 million
  • Remicade—$2 million
  • Lab/Blood work—$1.8 million
  • Physical therapy—$1.7 million

(Source: 2018 Sapphire data)

For example, a colonoscopy is the No.1 outpatient surgery in the country and the highest in cost. And a patient could have the same GI physician perform the procedure at a hospital or outpatient surgery center and the cost would be different.  

When Sapphire was developed, the idea was simple: Build a platform that mimics retail for healthcare pricing. The platform, while aimed at consumers, requires partnerships with local providers, employers and payers. The incentives and savings go directly to shoppers, but also have a large impact on the other invested companies.

Ultimately, it’s about bringing the best value to the customer: high quality and decent price. In fact, Sapphire has a Medical Expertise Guide to help patients with these decisions. The platform matches quality metrics with the support of a health professional for surgery specific data. 

The program kicked off in April 2018. Of the 176 cases opened, 60% scheduled with a high-value provider, leading to an average savings of $4,212 per case. 

And really, the success of price transparency largely falls on the responsibility of successful partnerships with payers. Graybill points out that insurers are the only entities that hold all of the data necessary to help consumers make the right choices. 

“We are a tool and solution that can utilize data that they [insurers] have and provide options to their members and employers that will encourage them to participate,” he said. “At the end of the day, whomever is paying the claims is generating savings.” 

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On average, Sapphire pays individuals between $25 and $500 for an individual service. Overall, that is a savings of $606 for every check sent out—if you include payer and employer savings.

Looking at the big picture of health insurance in the U.S., Graybill says that each individual needs to do his or her part. “When we start to see individuals at volume receiving savings, interesting things start happening,” he said. 

And demand from consumers is what improves the pricing in the marketplace and the options. For example, just a few years ago, there was only one location for patients to get outpatient infusion therapy in New Hampshire. And this infusion facility started offering SmartShopper rewards.

So, this monopoly on the procedure sparked the interest of other providers to become equipped with this technology and now there are 18 physical locations and three home health providers that offer infusion therapy in the market. 

Again, this is an example of individual consumers making a change on a large scale. But the change doesn’t happen overnight. Sapphire has been working with companies, nonprofits, government agencies, payers and providers in New Hampshire for almost a decade and today has clients in many states across the country.