Payers, Events

What else is needed for price transparency to control costs?

A panel at the MedCity Engage conference in San Diego on Nov. 6 will delve into the methods companies are undertaking to improve price transparency and the potential impact that price transparency could have on lowering larger healthcare costs.

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As healthcare spending continues to increase, consumers are increasingly demanding more transparency into the actual price of healthcare services and procedures.

Whereas this process would be relatively straightforward in most industries, in healthcare the question is a complex calculation involving where the service is performed, what kind of coverage the patient has, opaque negotiations between providers and health plans and who actually provides care.

Take an MRI for example. Figures from financial-planning site Bankrate say an MRI can costs between $400 and $3,500 for what is essentially the exact same procedure.

A panel at the MedCity Engage conference in San Diego on Nov. 6 will delve into the methods companies are undertaking to improve price transparency and the potential impact that price transparency could have on lowering larger healthcare costs.

The event, moderated by Cedar CEO Otto Florian, will feature Heather Fernandez, the CEO and co-founder of San Francisco-based urgent care company Solv and Kristin Mowat, the senior vice president of corporate development for Castlight Health.

Price transparency has been historically difficult in healthcare because of the roundabout way that patients pay for care through health plan premiums, insulating both consumers and providers from the true cost of care.

But a number of factors are driving the trend toward more transparency like the shift to value-based payment systems that pay for outcomes instead of the volume of service and the growth of high-deductible health plans leading consumers to shoulder more of the direct financial cost of their care.


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That consumer anxiety when we get sick is exacerbated by not knowing how it will cost is unacceptable,” Fernandez said, citing the fact that half of bankruptcies in country are healthcare related.

Solv is attempting to head off this problem by being an online directory platform to urgent care and outpatient clinics, displaying the upfront price of visits and services online and giving

“Facility fees are the major culprit in the driving up of costs of care administered in hospital settings – often the same care could be provided in community clinics or local outpatient provider practices without those variable, and often astronomical, costs,” Fernandez said.

However, just because patients know the costs of healthcare options doesn’t mean they will  make the most cost-conscious decisions about their health.

While analogies are often made between shopping for healthcare and the traditional retail experience, there are a few key differences, namely the importance of quality of care in healthcare, the difficulties in being able to access lower cost or preventative options and simply a lack of knowledge of benefit or healthcare offerings.

When Castlight Health was founded in 2008, it promised to offer a platform to share the prices negotiated by insurers, hospitals and physicians. But as the company developed it realized that in order to make better care decisions, consumers needed but also navigation tools to point them to the correct resources.

“They need personalized information. So just having generic information on price, generic information on providers, generic information on their benefits is of no use to anyone,” Mowat said.

Castlight Health’s platform – which it sells to employers – collects health and benefits options in one hub that spans healthcare coverage, chronic disease management and wellness and nutrition.

Education is also a key part of Castlight Health’s strategy, in both being able to explain the complicated world of healthcare to users and highlight new technology-enabled options like telemedicine or remote monitoring solutions.

We know that most benefit programs that are available to people have under 10 percent utilization,” Mowat said. “From an employer perspective that’s just so sad because here they are spending good money on programs that could deliver a bunch of value that aren’t being used and the employee just doesn’t know that they’re there to be used.”

Ultimately, according to Fernandez, admitting the problem of price variability and shining a spotlight on it is only the first step to recovery and controlling costs.

“A meaningful change in the cost of care will also require other changes, like alignment between consumers, providers and payers through shared risk, and technology tools which empower consumers to make the right decisions for their health and their pocketbooks,” Fernandez said.

Photo: adventtr, Getty Images

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