Imagine this scenario: Your car died and isn't worth repairing, so you go to a car dealership to buy a new one. The salesman offers you a shiny red car that fits your needs, so you agree to buy it (because you consider the salesman to be the expert) and drive your new car right off the lot. About two months later, you receive a bill from the dealership for $50,000. You're in shock and awe that your car came with such a high price tag and you're not in a position financially to afford the extra costs.
While this sounds like a wildly ridiculous situation--who would even imagine buying a car without researching the available options, comparing choices and understanding all the costs involved?--that's what happens every day in the health insurance industry.
Since most consumers don't know about healthcare prices, including how much a simple office visit or a complex surgery costs, they can't make wise decisions about their own medical care.
But insurers are working hard to change that. For example, Pittsburgh-based Highmark has its own cost transparency tool, which allows its members to see estimated prices for medical procedures, as well as compare and rate doctors and medical facilities.
To learn more about Highmark's price transparency initiatives, FierceHealthPayer spoke with Matt Fidler (pictured left), vice president of consumerism and retail marketing for the insurer.
FierceHealthPayer: Can you explain how Highmark's care cost estimator works?
Matt Fidler: Highmark members can log into our members' website, where they have access to the care cost estimator and a slew of other transparency tools that are all aimed at helping folks understand the cost and quality of the care they can receive. The reason we created the care cost estimator was because we're starting to see, as every other insurer is, many employers shifting more cost responsibility to individuals for which they provide plans.
It just makes sense that we need to create a set of tools that people can use to understand and investigate the cost of care they receive. And that's really where the care cost estimator was born.
The tool itself works from a national database of about 100 million different claims contributed from all of the Blue Cross Blue Shield plans around the country. It's a massive, robust database that allows members to really investigate the cost of a procedure or a bundle of procedures in their area. What makes it proprietary to Highmark is the interface and the way we use and present and show the data on our member site.
I live in Pittsburgh, but travel all over the place. So if something happened to me while I was in Florida, I may not know what the hospital systems there are. But because this data set is so broad and our tool can adjust for location, you can actually use the tool anywhere in the country to understand and investigate costs while you're traveling.
The cost estimator also takes into account all the different components of a service like a knee replacement that's made up of five, six or seven different procedures that all play into the total costs. The tool's estimated price includes every touch that's involved in the knee replacement and it lays out those costs.
FHP: Could you provide an example of how a member could use the care cost estimator?
Fidler: I'll use myself as an example. If I'm in the tool and select that I'm looking for care for myself, it defaults to the address on file for me. So I choose the option to show providers within 25 miles of where I live, and then I can select what kind of care that I'm looking for, including inpatient, outpatient, office visit, diagnostics and labs.
If I pick diagnostics, I have another set of choices and I select an EKG. Obviously the member has to have a little bit of information about what type of service they're going to get, but when folks use this tool, they're often looking at a doctor's order or something else from the doctor about what they need to have done. So I go through all that information and the tool provides all the providers offering that service within 25 miles of my location and all the costs associated with that procedure.
The great thing is it doesn't just show me what the rack rate cost is for each procedure. It also pulls in my own product information, including whether I have met my deductible and co-insurance. So you're truly getting your own personalized rate.
For example, the tool says the EKG costs $118, but based on my own plan's information, my cost is estimated to be between $11 and $13. So that will change throughout the year as a consumer is building up to meet the deductible or has met it. The tool uses that real-time information, looks at their product design, looks at whether co-insurance and deductibles are met and returns their personalized cost estimate.
FHP: Does the tool also provide quality information or ratings?
Fidler: The tool helps give a proxy for quality. So one of the thingswe touch on a lot is the Blue Cross Blue Shield Association has something called the Blue Distinction Centers, which are facilities around the country that get a gold star for certain procedures based on their clinical outcomes. The care cost estimator includes how many of the procedures [the members are searching for] have been performed by a doctor or facility and whether they're a Blue Distinction Center. We're trying to bring a lot of information into one space so when consumers look at it, they're not only getting cost information, but they're getting some understanding of quality as well.
We also provide a patient experience review where any member can go in and rate their doctor or facility based on five or six different dimensions. We're so accustomed as consumers to take to heart feedback that a peer or group of folks rate on websites like Amazon or iTunes or Netflix. So we created a place where anyone can go see the ratings our members are giving doctors or facilities. But only our members can actually go in and rate those providers. The tool then bumps up the reviews against claims to verify that the member actually saw the particular doctor. And we have other checks and balances that occur behind the scenes.
FHP: How have your members responded so far to the Care Cost Estimator?
Fidler: We've been working on a slate of transparency tools for a few years. The care cost estimator went live in April and, so far, we've had about 25,000 people use that tool. Though it's not really fair to contrast that number against our entire membership base because some of our members aren't actively engaged in a course of care now, we're happy with that response rate.
FHP: If cost and quality transparency is a Highmark goal, how is the company working to make consumers more focused on cost and quality of care?
Fidler: The broader topic we're trying to address is how do you shift the consumers' mindset to starting to care about the costs of receiving medical care. It's strange--often times you don't know the costs of the procedure before having the work done. But you wouldn't think about bringing your car to the shop and without knowing how much the work is going to cost. And you wouldn't buy a new TV and not know how much it's going to cost you.
The big consumer mindset shift we and every other insurer are facing right now is how do you get folks to take a vested interest in quality and do that investigation upfront so it can inform how and where they receive care. But it's only through tools like this and the continuing marketing and raising awareness of these tools that will get the adoption we're looking for to make those folks more informed and educated shoppers for care.
Each of the tools and features [regarding price transparency] we've launched has a multi-pronged marketing plan to end-users but also to folks like employers so they're aware of these tools their employees can access to be better informed about care. Employers differ based on size and plan type but we've been finding employers have been out promoting these tools because they want their employees to be more informed and educated shoppers, particularly those larger clients who tend to pay their own claims. Any dollar that an employee saves while still getting a good course of care helps that organization control their healthcare costs. So part of the marketing plan we do is communications with members across our social presences and spotlight it on our members' websites to build that awareness.
But like anything else that's in the infancy of adoption, what we really need are some very influential folks to use the tool, have a great experience and let word of mouth help drive awareness of these tools. And that will come. This is the very early stage of the shif--employers are starting to move more costs to employees, and consumers are becoming more aware of cost and quality prior to receiving care. We've created this slate of tools, now it's a matter of leading the consumers to the tools and having them spread the word of value for it.
FHP: Is Highmark modeling its price transparency tools after any other industries or companies in particular?
Fidler: It's been an interesting evolution for our industry. The good thing is we can take cues from other industries. We know consumers are being conditioned by those industries so we don't have to recreate the wheel; we just have to learn how to apply it in healthcare and better serve our members.
We're watching a lot of out-of-industry brands that consumers really enjoy doing business with and we're trying to take cues from them on how we design our products. Obviously, we have members at the center of our design. We spend a lot of time benchmarking brands from Amazon to American Express to Ritz Carlton to Apple.
We know our members are being conditioned by their shopping and investigation experiences from other industries, so if a 500-pound gorilla like Amazon that's stellar at what they do is going to create a new way for consumers to shop, that's going to trickle down into every component of many other industries. So let's be aware of that and let's embrace that and utilize some of that wisdom and the existing groundwork they've laid down to give our members a better experience in this insurance category.
FHP: How have providers responded to Highmark's price transparency tools? Have you received any pushback from them?
Fidler: Any time you create a new feature or something distinct, you have some folks who embrace it and some folks who have concerns and take time. But the reality is websites like Healthgrades and Angie's List have provider ratings and costs, so that information and data is out there. We're just trying to put it in a place where our consumers can access the information and a bevy of other tools to help them make that choice.
I can't think of a specific example where we've had substantial provider feedback around these transparency tools, but most of these doctors and facilities recognize this is the way of the world moving forward. In fact, many of those providers who are recognized as Blue Distinction Centers, which really is a feather in their cap, want these types of tools available so folks know they're delivering an above-average experience of care. And providers actually like the idea of the consumer taking a more active role in their healthcare and being an engaged player.
FHP: How does Highmark plan to address cost transparency as it changes the health insurance industry?
Fidler: It's a three-step process. The first is that we have the tools like the care cost estimator and the patient experience reviews available to our members so that when they're ready those tools are waiting for them. The second step has to be raising the awareness of our members and our employers on why those tools are here and how we think consumer adoption of them will help lead to more educated, informed buying decisions when it comes to health.
And the third step is we need folks to tell other folks. We're still an insurance company and a percentage of the population isn't going to trust us as far as they can throw us. But when people go in and they have a good experience with these tools and endorse the tools, that's really impactful for us and, quite frankly, for every brand. This is what word of mouth does for a brand. So that would be a really nice outcome that would help expedite the adoption curve on this.
- Dina (@HealthPayer)
Editor's Note: This interview has been edited and condensed for clarity.