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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New Price Transparency Shopping Tools Help Healthcare Consumers Make Educated Choices and Save Money Using Smartphones and Other Devices

Apr 1, 2020 | Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations

Price shopping for clinical laboratories and other healthcare services and surgical procedures creates a ‘healthy competitive environment,’ an Optum executive noted

With the threat of infection from SARS-CoV-2 (the coronavirus that causes COVID-19) on the minds of most Americans, price transparency for medical care is more critical than ever, and new smartphone applications (apps) are helping patients shop for the best prices and quality when selecting healthcare, including clinical laboratory services. 

One example, SmartShopper by Vitals (now known as Sapphire Digital) of Lyndhurst, N.J., is a pre-paid employer- or health plan-based program that lets people use mobile phone apps and go online using their computers to check prices and quality ratings for healthcare service providers in their area. The program may also incentivize members to prices shop by offering up to $500 per service for choosing lower-cost providers. 

“Today, there is no reason consumers shouldn’t know the price of routine, non-emergency care,” said Heyward Donigan, former President and CEO of Vitals who is now CEO of Rite Aid (NYSE:RAD), in a news release. “Putting consumers in the driver’s seat for making informed healthcare decisions will create a competitive healthcare marketplace that ultimately lowers costs for everyone.”

Does Price Shopping Create a ‘Healthy Competitive Environment’?

Individuals whose health plans or employers have signed up for SmartShopper can use it to seek out the best prices for routine exams, preventative exams, imaging scans, and to schedule surgeries. The program’s provider data is compared by cost and quality based on nationally recognized metrics and patient reviews.

Some of the largest health insurers in the country, such as Anthem and Highmark, provide price shopping tools to their clients. 

“Up to 7% of overall healthcare spent could be reduced through price transparency tools like SmartShopper,” Becca Lococo, PhD, Vice President, Customer Experience at Optum, told Modern Healthcare. This can create a really healthy competitive environment in an industry where costs are already rising.”

Employers Save Big with Price Shopping

Large companies can reap substantial savings when they provide their employees with price shopping tools. Employer savings can range from $1,810 for a round of physical therapy to $80 for a mammogram. Patients, on average, save $606 for each procedure with SmartShopper, reported Modern Healthcare.  

“Even just one person shopping can make a difference for that employer in terms of the claims they’d be paying out at the end,” Steve Crist, Vice President, Commercial Health Plan, Blue Cross Blue Shield of North Carolina, told Modern Healthcare. “Even though the employer is paying the incentive, the cost savings more than make up for it. The ROI on this program is very strong.”

The Vitals SmartShopper Book of Business Report 2017 notes that, between 2014 and 2017, the tool saved employers $40 million and paid out $4.6 million in cash rewards to individual consumers. In 2016 alone, SmartShopper saved employers $15 million and paid out $1.8 million in cash incentives with the average incentive check totaling $85.

The Vitals report also listed the top 10 procedures and the three-year total cost savings for employers that used SmartShopper. The list includes clinical laboratory testing as the fifth largest source of savings for employers that used price-transparency tools as part of their health benefits programs:

  • Colonoscopy ($6,592,719)
  • MRI ($5,382,440)
  • Physical therapy ($4,545,758)
  • Remicade therapy ($4,364,887)
  • Lab and blood work ($3,600,105);
  • CT scan ($2,001,602)
  • Upper GI endoscopy ($1,301,916)
  • Knee Surgery ($913,436)
  • Mammogram ($868,322)
  • Shoulder Surgery ($636,615)

SmartShopper has a configurable list of more than 200 medical procedures and services included in the tool. Sapphire Digital (formerly Vitals) uses claims data and collaborates with clients to develop the ideal combination of services to maximize savings for their customers. 

“We don’t have to boil the ocean to produce a sizeable reduction in healthcare costs for our employer clients,” said Heyward Donigan, former President and CEO of Vitals and now CEO of Rite-Aid, in the Vitals report. “Focusing on routine, shoppable procedures that are relevant to the demographics of a client’s workforce generates significant savings.” (Photo copyright: Wall Street Journal.)

Price Shopping for Surgery

In 2018, before changing its name to Sapphire Digital, Vitals sold its consumer services division to WebMD. The sale enabled Vitals to focus on enhancing and developing its price transparency tools. The company then launched Medical Expertise Guide (MEG), which uses advanced analytics to create “proprietary Composite Quality Scores for surgeons and facilities to help consumers find the best surgeon and facility combination for their surgery, at a predictable cost,” according to Sapphire Digital’s website.  

“MEG brings consumers information, powered by data and analytics and supported by personalized service, to help them make quality healthcare decisions with confidence,” said Donigan, in a news release. “MEG guides employees to the best care, while helping employers manage the overall cost-effectiveness of their healthcare program.”

Examples presented in the news release of the “savings per case” for people using MEG include:

In October 2016, Dark Daily reported on another example of using healthcare transparency tools from Castlight Health. That tool enables Safeway employees to check clinical laboratory prices on their smartphones or computers before selecting where to have tests performed. At that time, Safeway and its employees were able to reduce spending on clinical laboratory tests by 32% in only 24 months by selecting the labs with the lowest prices.

The examples presented above are evidence that price transparency is gaining a foothold in healthcare. These are early demonstrations that price shopping tools do help consumers make more informed decisions when choosing hospitals, physicians, or clinical laboratories. The trend is for ever-growing numbers of consumers to rely on pricing transparency tools when selecting their medical care.

Pathologists and clinical laboratories should not ignore this trend, as it could affect business workflow and revenue streams. 

—JP Schlingman

Related Information:

Encouraging Patients to Shop Around Amid High Healthcare Prices

Show ‘Em the Money: Paying Patients to Shop for Affordable Medical Care

Vitals SmartShopper Expands to Millions of Consumers in 2018

Vitals SmartShopper Book of Business Report 2017

Vitals Launches MEG, A Medical Expertise Guide for Health Care Shopping

Vitals Announces Company Name Change to Sapphire Digital

From Casting Light to Total Eclipse? Can a New CEO Turn Around Castlight Health?

Vitals Study Shows Consumers Using Cost Transparency Tools Select Clinical Laboratories with Low Test Prices

Using the Reference Pricing Strategy, Safeway and its Employees Reduce Spending on Clinical Laboratory Tests by 32% in Only 24 Months by Selecting Lab with Lowest Prices

Study Reveals Surprises in How Healthcare Consumers Respond to Wellness Programs and Incentives, Some of Which Utilize Clinical Laboratory Tests as Benchmarks

Feb 22, 2017 | Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Management & Operations

80% of US employers are using financial incentives in wellness programs, and Penn Medicine research suggests better incentive design is needed to get people to exercise

In recent years, there’s been plenty of headlines about wellness programs offered by employers and health insurers. Data show that such programs are cost-effective. But, until now, there were few studies about employees’ attitudes toward wellness programs. Because some of these wellness programs incorporate clinical laboratory testing, medical labs have a stake in their future.

The fact is that companies want healthier employees and they’re willing to pay for it. Experts say about 80% of US employers use financial incentives in worker wellness programs. And for each dollar a company spends on a wellness program, it saves about $3 in medical costs, according to an article the journal Health Affairs. (more…)

Vitals Study Shows Consumers Using Cost Transparency Tools Select Clinical Laboratories with Low Test Prices

Dec 23, 2016 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing

Researchers find shopping for medical laboratory tests increased by nearly 50%, and people are saving more than a million dollars annually by shopping for blood tests

Each year, more consumers use online healthcare price-shopping tools to find hospitals, physicians, and clinical laboratories that have the lowest prices. And medical laboratory tests is among the top services on their lists!

Researchers at Vitals of Lyndhurst, NJ, a company that publishes online physician ratings, analyzed how consumers were using its price and quality transparency tools. They confirmed that shopping for medical laboratory tests/blood work is one of the top healthcare procedures checked by consumers.

According to a recent Vitals press release, approximately 46% more people shopped for blood tests in 2015 than the year before, and they saved $1,149,682 by doing so. That’s because their health plans reward them for selecting good quality and low-price providers, as well as adopting healthy behaviors, such as losing weight, exercising more, and lowering high cholesterol scores. (more…)

CMS Issues New Telemedicine Guidelines and Approves Seven New Procedures in Move to Further Encourage Telehealth Initiatives

Jun 10, 2015 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations

As the Medicare program expands telemedicine services, the opportunity may arise for sub-specialist pathologists to offer consultation services across state lines

More use of telemedicine across state borders has long been predicted as a way to improve access to care—particularly for patients in rural areas—as well as to give physicians and patients access to talented sub-specialists. Within the anatomic pathology profession, however, there are probably as many pathologists who view telemedicine across states lines to be a threat as there are pathologists who see it as an opportunity to raise the quality of care.

For its part, the Centers for Medicaid and Medicare Services (CMS) is taking a step forward in supporting the wider use of telemedicine. It is issuing new rules that expand reimbursement for remote patient services, a move that one day could benefit pathologists who provide sub-specialty pathology consultations with referring physicians across state lines. (more…)

PeaceHealth and University of Washington School of Medicine Form Strategic Alliance, Further Integrating Academic and Community Care Settings

Jan 3, 2014 | Laboratory Hiring & Human Resources, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Sales and Marketing, Management & Operations

There’s more consolidation in the hospital marketplace as institutions look to build scale and offer a fuller menu of healthcare services

Across the United States, multi-hospital health systems and stand-alone academic medical centers are looking for the right collaborations, alliances, and consolidation opportunities. This is happening because hospitals of all sizes and types recognize the need to be part of a comprehensive, integrated provider network in their region.

This is a trend that has ramifications for clinical laboratories and pathology groups that operate in the regions where these alliances and collaborations happen. That is because such collaborations can often change the competitive market for medical laboratory testing in the communities served by the partners in the alliance.
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