Health IT, Hospitals, Payers, Startups

New cost transparency solution loops in payers, providers & patients to “let market forces work”

There’s a problem with “cost transparency” efforts in healthcare, according to Tami Hutchison.  It’s that […]

There’s a problem with “cost transparency” efforts in healthcare, according to Tami Hutchison.  It’s that much of what is being done with cost data today is actually more reflective than transparent. It’s vendors taking data from one party, doing something with it, and then reflecting it back to that same party.

That puts pressure on that one stakeholder to drive down costs. What Hutchison and her startup team at eLuminate Health are trying to do is to create transparency that allows all of the touchpoints in a care encounter to see through to the others. They’ve created what she called “an online marketplace to connect supply and demand and allow market forces to work.”

Here’s how it works. Initially, on the supply side, eLuminate will roll out to providers at imaging and surgery centers. Surgeons and radiologists will tell eLuminate who they are, what procedures they do, and how much they charge for those procedures. They then become part of an “in-network” at health plans that sign up for eLuminate.

Through the company’s dashboard, surgeons and radiologists can see where they stand compared to others who offer the same procedures, in terms of price and a quality rating calculated by eLuminate. Hutchison said the data used to create quality ratings comes from several places, including hospitals and physicians, and will eventually include consumer ratings. The company also mapped primary care data from the Centers for Medicare & Medicaid Services data, to show how many physicians, and which physicians, are referring to certain imaging and surgery centers.

“You can look in real time at your performance dashboard with us and say, I’m not winning, so in order for me to win I need to improve my quality or decrease my price,” Hutchison said.

On the demand side, primary care physicians use eLuminate when they’re making a referral. They tell the platform what kind of procedure a patient needs, and it generates a list of providers in the area who offer it. Patients then get online and customize that list based on their preferences, like price and quality rating.

But, since consumers will (hopefully) only need to use eLuminate a few times in their lives, it doesn’t make sense to try to force a user ID and password kind of relationship with them. Instead, the platform sits inside a pre-existing patient portal offered by the health plan.

For health plans, who are the targets of more health IT systems than we can count right now, Hutchison said the system integrates with their pre-authorization process. When they approve a patient’s referral from the primary care physician, eLuminate is prompted to send an outbound invitation to the patient to log on and use the customization tool. “We know what their co-pay is, and we allow them to select and schedule through us and pay through us as well,” Hutchison said.

That all sounds good, but it’s going to require some serious efforts by the eLuminate team to get providers, specialists and health plans on board. Hutchison brought with her quite a Rolodex. Prior to a three-year stint at Cerner, she spent most of her career working in business development at provider facilities. “I was thinking about how interesting it was that there’s this tremendous capacity for imaging and surgery, and yet that’s what commands the high profit margins, that’s’ what drives annual inflation and that’s were real prices are highest and there’s the most variability.”

She left Cerner in May of last year, when she “felt that the market was ready for what we’re doing,” pulled together an initial group of investors and recruited two software engineers to build the platform.

The Kansas City-based company has gotten some early attention from winning the Hackovate Health challenge hosted by H&R Block and business incubator Think Big Partners last month. It plans to begin onboarding surgery and radiology centers to the system in April and launch with its first health plan clients and their members in July.

“Our approach to the market is not to paint a target on anyone’s back and say, we’re going to relocate economic surplus that you currently own over here to somebody else,” she said. “We’re building a system that can solve problems for every stakeholder group.”

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