It’s been four years since Massachusetts signed a law mandating that health insurers in the state develop a database and online tools that enables consumers to research and comparison shop prices for healthcare procedures.
Over three years, the number of total procedures that the state’s three biggest health insurers—Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim Health Plan and Tufts Health Plan–now let consumers price online has grown to 3,052. That total includes 1,568 inpatient and outpatient produces available from Blue Cross, 800 procedures from Harvard Pilgrim and 684 from Tufts.
From 2014 to 2017, the number of online estimates generated for various procedures on those health-payer websites also has increased by 47% from 73,923 four years ago to 108,868 estimates last year, according to the Pioneer Institute Public Policy Research, a Boston think tank.
Online cost-estimator tools give consumers and plan members online information about a range of information for outpatient and many inpatient procedures. These tools display the amount that has to be paid by consumers to any particular provider, how much the plan pays the provider and information about provider quality. Consumers can compare several providers at the same time.
“Price transparency can help initiate reforms that reduce healthcare costs and allow market forces to drive patients to lower-cost, higher-value providers,” says Pioneer Institute senior fellow in healthcare Barbara Anthony. While more Massachusetts consumers are using the websites of the state’s three biggest healthcare payers, which the Pioneer Institute says accounts for about 80% of the market, more work on healthcare price transparency remains, she says.
For example, Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim Health Plan and Tufts Health Plan had about 297,000 aggregate inquiries on their cost-estimator tools from early 2014 through 2017, but those numbers are small compared to a potential market of at least three million people that the three carriers cover.
“The number of aggregate inquiries shows that carriers still have a lot of work ahead to achieve price transparency’s potential to rein in healthcare costs,” says Pioneer Institute executive director Jim Stergios.
In 2015, Massachusetts’ median annual household income was around $70,000, and the average family spent about $20,000 on premiums and cost sharing. “These figures show that transparency in healthcare is important to the budgets of Massachusetts families,” Stergios says.
But the Harvard Pilgrim and Tufts’ estimator tools still don’t provide cost data on many behavioral health procedures, says the Pioneer Institute.
The Blue Cross site is compatible with online translation tools, but none of the carriers’ cost-estimator tools are readily available in a language other than English.
“While state government has not provided any compliance leadership for consumer price transparency, now, after overcoming resistance and a lack of support, the market is waking up to the potential benefits of price transparency and incentive programs,” Anthony says.
For their part, the three health insurers are looking for ways to increase use of the online tools and comparison shopping for procedures online. Under incentive/rewards programs, employees are rewarded by either small or no co-payments or cash rewards from $25 to several hundreds of dollars for choosing lower-cost, high-value providers, such as outpatient surgical centers rather than a hospital outpatient clinic, says the Pioneer Institute.
“Members who understand their benefits—those who aren’t surprised by bills and feel empowered are much more likely to be satisfied members and engaged patients,” says Blue Cross Blue Shield of Massachusetts CEO Andrew Dreyfus.
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