As of January 1, 2019, all hospitals in Texas have to publish what they charge for all tests, imaging, surgeries, or other procedures. Though many welcome the move toward price transparency, the lists of charges can be difficult to interpret, and, when insurance is factored in, the out-of-pocket costs might look nothing like the posted charge. We spoke with Paul Hain, chief medical officer and divisional senior vice president of market delivery at Blue Cross Blue Shield of Texas, about the impact of the new law.
Comparison shopping is key, right? Price transparency is important because it allows people to understand the cost of their care. The United States currently has the most expensive healthcare in the world, and the Dallas-Fort Worth area is one of the most expensive areas in the United States. Until people can see where they can get more efficient care, it will be difficult to have market forces reduce our excessive prices.
But how much money can people really save? According to research, roughly $38 billion is spent annually on shoppable services or nonemergent procedures that can be scheduled in advance, like hip and knee replacement operations, flu shots, blood tests, colonoscopies, and MRIs. Why is this important? Our claims data found that the cost of an MRI in the Dallas-Fort Worth area ranged from a high of $3,783 to a low of $106, while a major procedure like a hip replacement ranged from a low of $11,483 to a high of $64,601. Healthcare consumers armed with this kind of transparent pricing information can make informed decisions and, at the same time, help themselves save a lot of money.
Does more data mean more confusion? Making hospital charges more transparent is a good thing. If nothing else, it continues a very important conversation about healthcare costs in this country. If done right, healthcare consumers will have tools at their fingertips to compare prices and make informed decisions about their care. But it’s critical for providers and facilities to make their prices clear, transparent, and accessible. They also must provide the tools to help consumers engage and become better shoppers. Many patients—and even physicians—are surprised to find out that the cost of the same test or treatment can vary by thousands of dollars, with no measurable difference in quality.
How are insurers helping customers be better shoppers? Most insurance companies have various shopping tools, like health savings account calculators and pricing tools. We have pricing tools that use our cost data to help members identify the cost of common procedures from in-network providers in their area. Some BCBSTX plans also offer a person known as a benefits value advisor to help them navigate the different provider options and answer cost queries. In some cases, members may even be able to earn rewards for choosing a high-quality, lower-cost facility rather than using one of equal quality but a higher cost.
Will price transparency help change healthcare for the better? Time will tell, but I can tell you healthcare pricing transparency is here to stay. It’s going to be important for consumers to take the time to interact with the tools available so they become better shoppers. I think rewarding smart choices will be a key component, because providing transparency pricing and tools is not always enough to motivate patients to engage in finding the best price for shoppable services.