News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Scheduled to launch in early 2015, the Health Care Cost Institute’s free online tool will give consumers access to data on provider prices and quality

It’s a significant sign of the times when three of the nation’s biggest health insurance companies agree to share data on healthcare prices and utilization specifically so that consumers can access this information. This will advance price transparency. It will also put more pressure on clinical laboratories to make it easy for consumers to see the prices of medical laboratory tests in advance of services.

This new price-transparency project includes Aetna (NYSE: ATE), UnitedHealthcare (NYSE: UNH), and Humana (NYSE: HUM). The three health insurers are partnering with the Health Care Cost Institute (HCCI), a nonprofit organization that maintains a database on healthcare cost and utilization.

The insurers will share healthcare price data. HCCI plans to provide the general public free, online access to this information, beginning in early 2015.

HCCI Offers Single, Secure Source for Healthcare Pricing and Quality

“Consumers, employers and regulatory agencies will now have a single source of consistent, transparent healthcare information based on the most reliable data imaginable, including actual cost, which only insurers currently have,” declared David Newman, Ph.D., J.D., HCCI Executive Director, in a HCCI press release.

“Voluntarily making this information available will be of immeasurable value to consumers and other health system participants, as they seek to manage the cost and quality of care,” he added.

Newman expects other major health insurers will join HCCI’s initiative prior to the launch of the independent nonprofit’s online healthcare cost “transparency tool.” The goal is for this tool to aggregate pricing data from commercial health plans, as well as Medicare and Medicare Advantage plans.

HCCI’s transparency portal will also provide information on provider quality of care and other information. This is all designed to help consumers make informed healthcare decisions. Additionally, it will provide consumers password-protected access to prices related to their specific health plans.

Other Sources of Healthcare Pricing Data

This is the latest attempt to provide consumers price-comparison information to help them shop for healthcare services. It comes amid a national effort to control healthcare costs, which now total about $2.7 trillion annually and comprise 20% of the U.S. economy, noted a report by CNBC.com.

In an effort to make consumers more aware of the arbitrary prices charged by different healthcare providers, the Centers for Medicare and Medicaid Services last year published an online list of what 3,000 hospitals and major physician groups charge Medicare for healthcare services. (See Dark Daily, “Medicare Officials Post Prices of 3,000 Hospitals in Effort to Raise Consumer Awareness of Arbitrary Hospital Pricing”, May 31, 2013.)

Additionally, some insurers; employers; and online healthcare shopping services, including Medibid.com, Castlight Health, Clearhealthcosts.com, and Healthcare Bluebook provide online tools to help their members, employees of client companies, and the general public shop for healthcare quality and value. Insurers who already provide members online access a price-comparison tool will integrate their own tools with HCCI’s tool.

HCCI Says Its Tool Offers Quickest Access to Comprehensive Cost Data

Newman contended that HCCI’s relationship with insurers provides access to data on billions of insurance claims quicker than another other source of pricing information. He claimed that HCCI has cost data for about 25% of the healthcare insurance market for people under age 65.

CNBC.com, however, pointed out that provider price lists often have little in common with the negotiated prices insurers actually pay for healthcare services.

Free Public Access to Healthcare Cost Data

In addition to providing free public access to healthcare cost data, HCCI will offer employers customized data for use by their workers, noted the HCCI press release. Revenue generated by this service will be used to support HCCI’s public initiative.

HCCI’s tool is encouraging and a step in the right direction, suggested Robert Field, J.D., Professor of Law at the Drexel University School of Law and Professor of Health Management and Policy in the Drexel School of Public Health and author of a book titled Mother of Invention: How the Government Created “Free-Market Healthcare.”

He noted that HCCI’s online tools will not only allow consumers to shop for the best deal, but provides them information to bargain with providers for a better price. He also pointed out that people are less likely to haggle when it involves a serious medical issue or emergency care.

Robert Field, J.D., (pictured above), is a Professor of Law at the Drexel University School of Law and Professor of Health Management and Policy at the Drexel School of Public Health. He contends that transparency will put downward pressure on healthcare pricing and is the first step toward creating a healthcare market that actually works. (Photo copyrigh Dexel University.)

Robert Field, J.D., (pictured above), is a Professor of Law at the Drexel University School of Law and Professor of Health Management and Policy at the Drexel School of Public Health. He contends that transparency will put downward pressure on healthcare pricing and is the first step toward creating a healthcare market that actually works. (Photo copyrigh Dexel University.)

Field expects transparency to put downward pressure on healthcare pricing. This is the first step toward creating “a market that actually works,” he contended. “And it should keep providers more on their toes, particularly with uninsured patients, where they [providers] have been able to get away with high-sticker prices. I think this should be able to rein this in.”

Insurers Weigh In on Reasons to Provide Consumers Transparency

An Aetna spokesperson told CNBC.com that Aetna supports HCCI’s initiative because it believes the healthcare system should be redesigned around the consumer’s need for reliable, transparent cost and quality information. The spokesman also emphasized that transparency is a major part of this process.

A UnitedHealthcare spokesperson agreed, noting that the initiative “is testament to our belief that educated consumers benefit the entire health system.” For its part, a Humana spokesperson pointed out that the HCCI tool satisfies demand for an easy and consistent way for consumers, employers and regulators to compare prices with a free, single source of information on health-care services, price and quality.”

Both government and private insurers are engaging consumers in the push for pricing transparency because research suggests that it can drive down costs. An analysis by researchers at the University of Chicago, for example, revealed that government regulations that force providers to disclose costs resulted in an overall 7% drop in the cost of common elective procedures.

Transparency Push Signals Clinical Labs to Align Pricing with Competitors

With such a comprehensive database of healthcare pricing and quality data, no providers—not even those providing ancillary services, such as clinical laboratories—will remain untouched by transparency efforts.

As more Americans are required to pay for a greater share of their healthcare bills, they will be motivated to shop around for both quality and value. This should alert lab managers of the need to align pricing for medical laboratory services with their competitors.

—By Patricia Kirk

Related Information:

Health Care Cost Institute to Develop Online Platform to Help Consumers, Employers and Regulators Examine the Price and Quality of Health Care Services

Want to shop around for health care? A tool to compare prices

Three Large Insurers Join Forces For Health Care Price Transparency

Castlight Health Offers Employers a Cloud-based Price Transparency Tool to Help Employees Shop for Low-Cost, High Quality Health Services

Price transparency stinks in health care. Here’s how the industry wants to change that

Clinical Pathology Labs Should Plan on Greater Transparency in Test Prices and Patient Outcomes

LA Times Reports That California Patients Who Pay Cash Get Rock-Bottom Price Discounts from Hospitals and Physicians

More Transparency for Provider Prices and Quality Is Goal of Employers and Private Payers During 2013

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