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Posts Tagged ‘change:healthcare’

Cost Transparency + Education = Engaged, Savvy Healthcare Shopper

Doug GhertnerPresident and CEO

Doug Ghertner
President and CEO

A recent New York Times article titled “The $2.7 Trillion Medical Bill” compares the costs of common medical procedures – like colonoscopies, hip replacements and angiograms – in the U.S. and other developed countries.  The article’s findings are shocking, but not surprising. Increasingly we’re hearing about the extreme differences in healthcare costs between our country and others like Spain, Switzerland, France and Canada.

But what about the price variances that exist within the borders of our own country? Within our own cities…our own zip codes…even within a single provider network. Case in point, Change Healthcare’s client data shows the following price ranges for healthcare services for employees in the same geographic area on the same benefit plan:

  • Diagnostic screening colonoscopy: $786-$1,819
  • Type II Diabetes Screen: $51-$437
  • CT Scan: $375-$3,035

The $2.7 Trillion Medical Bill” (and data like these) reinforces the importance of cost transparency and consumerism in healthcare…the importance of individuals comparison-shopping for care with an eye for quality AND cost.

Of equal importance, the article reinforces the need for better consumer education on the basics of healthcare.  Ms. Yapalater, who shares with readers the story of her routine $6,385 colonoscopy, says she has insurance, yet can’t figure out why she has to pay so much.  The fact is words like these are uttered far too often – and when people don’t understand things like deductibles and coinsurance, the consumer experience can be surprising and upsetting.  It’s a big part of why greater cost transparency without an understanding of the business of healthcare won’t necessarily improve the consumer experience or financial outcomes.

At Change Healthcare, we’re committed to ensuring consumers have the tools and knowledge they need to become engaged, savvy healthcare shoppers.  See how we can help educate your employees or plan members as part of a holistic approach to consumer engagement at http://www.changehealthcare.com/product/healthcareuniversity.html.

Premiums Rising for 2012 Renewal Period

In the next few months, millions of employees nationwide will receive their annual notifications to renew or amend their employer-provided health coverage. And, for a large portion of them, a hefty premium increase will be part of “what’s changed.” In the 16th annual report, Employer Survey on Purchasing Value in Health Care, authored by Towers Watson and the National Business Group on Health (NBGH), healthcare costs are up almost $800 per employee this year topping more than $11,000 annually. Both employers and employees have seen considerable increases in their health costs in the past five years, with employers paying 36 percent more and employees contributing 45 percent more.

To offset the rising healthcare tab, a majority of large employers are planning to continue raising premiums. An NBGH study found that 53 percent of large firms intended to increase the amount of employee contribution. There are several drivers behind the increased cost ranging from poor employee health habits, to the lack of adequate pricing information. As a result, a majority of employers are stepping up efforts to get their workers to more actively manage their own health and expenses. As we mentioned in a previous blog, employee wellness programs are a component of an overall cost-reduction strategy, but utilization of these programs remains slim. In addition, the Towers Watson/NBGH survey indicated that employer confidence in health plan performance and employee-wellness engagement continues to shrink while uncertainty surrounding the health care reform law continues to grow. Next year looks like a tough one for HR professionals and employees nationwide.

Many Americans found themselves living paycheck to paycheck in 2011, making the expected premium hikes for the 2012 renewal period daunting. There is little doubt that more employees may say yes to lower-premium, high-deductible plans in 2012. Our mission is to ensure that companies who provide these plans have the tools to assist their workers to make smarter, more informed healthcare decisions with their hard-earned paychecks so that we can all live within our budgets.

CDHP Potential on Public Sector Healthcare Savings

The Wall Street Journal recently reported on the increasing healthcare cost burden shouldered by state and local governments. While the private sector has restructured employee contributions and shifted more toward consumer-driven health plans (CDHPs), a vast majority of the public sector has resisted passing the buck – government employees pay on average 15 percent of premiums with some states requiring no contribution. The Manhattan Institute, a well-known organization dedicated to individual choice and responsibility, estimated that governments could save $1,376 per employee by following the private-business model.

Realizing the power of CDHPs, states like Indiana have begun offering options with lower premiums and empowering employees to take on more responsibility for the cost of care. An astonishing 70 percent of employees moved to these plans, and a study by Mercer Consulting estimated that the state’s move saved Indiana’s taxpayers $23 million. Multiply that savings opportunity nationwide – and there are more than 18 million government employees in the U.S. today – and the overall savings potential is astronomical. A trend toward CDHP is likely to continue given the financial pressure the U.S. is under when it comes to health care. This perspective is certainly validated by the fact that 23 states already offer these types of plans, and a growing number of states are now pushing into the 40+ percent cost sharing category per a 2011 study published by the Segal Company.

What’s exciting is that the potential savings of moving to CDHPs at the government and state level can be enhanced once employees are empowered with the right information to understand how to intelligently shop for their healthcare. The example of an employee like TaKeisha Woodson should and can be replicated across every public-sector employee. As the U.S. Postal Service and other state and local government entities join the heated debate over rising healthcare costs, change is certainly on its way …

Savings Spotlight: TaKeisha Woodson Healthcare Cost Savings make the WSJ

Young families are having an increasingly difficult time staying on budget in this tough economy, where each unexpected expense can cause an uneasy shuffling of priorities – especially when it comes to healthcare. One recent survey from the National Foundation for Credit Counseling found that 64 percent of Americans couldn’t handle a $1,000 emergency. To show how the average American is handling such costs, Anna Mathews’ personal finance column in Sunday’s edition of the Wall Street Journal showed us how TaKeisha Woodson, a credit analyst, saved nearly 50% on a prescription simply by taking advantage of change:healthcare’s Ways to Save Alerts™. But there is much more to TaKeisha’s story.

First Horizon National Corporation is a self-insured employer that offers the change:healthcare cost-comparison tool to its employees. TaKeisha is married to a school teacher, has two young children, and just like most growing families, she must juggle the challenges of making smart purchasing decisions with the need for quality care. In addition to the savings referenced in the WSJ, in May of this year her ten-month-old son became sick and was prescribed antibiotics by his pediatrician. TaKeisha arrived at the pharmacy to pick up her son’s prescription and was shocked to see a $100 price tag for a basic antibiotic. Instead of simply accepting the price at the pharmacy, TaKeisha knew she had options. Once she returned home, she logged onto her computer and using the change:healthcare Cost Lookup™ tool, found the same medication at nearly half the cost at another nearby pharmacy. In addition, with the change:healthcare cost comparison tool, TaKeisha will continue to receive proactive e-mail alerts on her routine prescriptions and doctor visits, letting her know how she and her family can save money in the future.

Her story is a testament to the power of actionable cost transparency – and it is just one of many. Through access to pricing information and a proactive outreach strategy that helps consumers take advantage of savings opportunities, TaKeisha is one of thousands of employees who are able to maximize the value from their healthcare benefit.

It definitely makes you wonder how much our healthcare system could save if everyone had access to the same tools as TaKeisha. Stay tuned for more savings stories from patients and employees …

Consumers Must be Consumers

I recently talked with Kelly Kennedy for a USA Today story about health insurance options and saving money… and made the point that when it comes to healthcare today, consumers need to behave like consumers.

Fortunately, I seemed to get my points across…  that with rising healthcare costs today, patients need to shop… and high deductible health plans do an admirable job of spurring that behavior.

In days past, most people didn’t ask how much a service cost because the bill went straight to the insurance company and the consumer never really felt the pain. (After all, healthcare costs $20, doesn’t it?)  Now, with almost 61 percent of employers planning to implement consumer driven health plans this year as a hedge against the ever-rising cost of care, that’s changing. Consumers may have a little more impetus to care about what things cost.

And where previously they might have been shopping blind, with no price tags to guide them on what things actually cost, now with cost transparency tools at their virtual fingertips (like change:healthcare’s Cost Transparency Solution), they’ll know pretty darn close what a service or product or care will cost BEFORE they buy it, and can make far more informed purchase decisions.

There are lots of savings to be had, too.

A recent assessment of our own nationwide database confirmed that without changing a thing about how healthcare is delivered, employees can save, on average, $350 each per year in their healthcare purchases.   Multiply that times the number of self-insured employees nationwide and you’re talking billions in savings.  Yeah, billions, with a “b.”

From where I sit, enabling consumers to become better purchasers — and then giving them the informational tools that aid their shopping — can be a great first step in dramatically decreasing the cost of healthcare in this country.

All we need to do is get consumers to simply be consumers.

I’m Seeing a Trend Here

The other day, I ran across a news story about a consumer dealing with cost transparency.  A mother was facing her daughter’s need for an MRI to determine if a spot on the young girl’s liver was cancerous.  Without a doubt, that mom was going to get the scan done so follow-up care decisions could be made quickly. But since the family had yet to meet the deductible of their high deductible health plan, the full cost of the test was going to come out of her pocket.

So how could she find a cost-effective place for the MRI?

Yeah, you know the story… she couldn’t.  The mom called a number of imaging centers only to learn she wouldn’t truly know what the cost was going to be…. until after the bill arrived.  “It’s completely unbelievable that you’re expected to decide where you’re going to have a test done without having any idea how much it’s going to be,” she told reporter Linda Hurtado, ABC Action News in Tampa. “Knowing that you’re going to have to pay out of pocket, it could be hundreds of dollars difference from one place to another.”

Boy, have I heard that a time or two….

The rest of the story, though, is more hopeful.  Both houses of the Florida Legislature are currently studying legislation called the Healthcare Price Transparency Bill, which would spell out new rules for select healthcare deliverers to post their prices on the waiting room wall.  So, in the words of Rep. Richard Corcoran, one of the representatives who sponsored it…  you could walk into the care center and say, “Wow, I’m about to get gouged!”

I’m seeing more stories about consumers being frustrated when it comes to knowing what healthcare costs will be before they make their purchase.  That’s bad.  But, as I’ve also chronicled here previously, I’m seeing consumers speak up about the issue of transparency… and elected officials seem to be ready to listen and act.  That’s good.

So, you see, if we all shout long and loud enough about issues like this, our voices WILL be heard.   And hopefully our concerns WILL be addressed.

And then I won’t have anything to write about any more.

About to Break the Sound Barrier

Four years ago, Robert Hendrick and I launched change:healthcare.  And so far, it’s been an exciting ride, to say the least.  Our evolution has been phenomenal; and, along the way, we’ve helped a ton of people.

And I’m thrilled that today marks yet another key milestone for our company – as we just announced Howard McLure, the former president of CVS/Caremark Pharmacy Services, as chairman of the board and future CEO.

Howard and I have been talking about this move for quite a while, but a few weeks ago I was finally able to coax him out of retirement to come help us make an even bigger impact in healthcare. He was attracted to change:healthcare because of our innovation and the fact that we’re the only company in this space actually giving healthcare consumers a way to make better decisions about their everyday healthcare purchases, helping reduce employee healthcare costs.

Given his background, it just made sense to me for him to come on board as chairman, and later, assume the CEO title.  His tenure and success at CVS/Caremark, as well as the passion he shares with me to offer consumers true healthcare cost transparency, makes him a perfect fit for our team.  In addition to years of healthcare industry expertise, his impressive history of success with investors, employees and stakeholders, combined with his talent in financial and operational management, will be critical to our aggressive growth plans over the next couple of years.  Of course, his access to significant industry contacts and operational and financial leadership skills to support smart growth won’t hurt, either.

As for me, I’ll now get to do more of what I really love to do… focus on further expanding our product platform, developing strategic opportunities and continuing to advocate nationally for cost transparency, which, as you all know, has been my mantra.  It’s work that I enjoy and will tackle without all the daily minutia of running a company.  I’ll carry the title of chief development officer, although the title of czar (very popular in Washington, DC now) did seem somewhat inviting….

So as change:healthcare continues taking on more clients and helping employees and employers realize greater savings in their healthcare expenditures, you’re going to be hearing a lot more about Howard and our team.  We’ve just fueled up and shifted into warp speed.

Hold on….


And Now Missouri

I’d love to meet Senator Rob Schaaf, a Missouri state senator and family physician.  After reading about a bill he’s sponsoring in the Missouri Senate in the Columbia Missourian , I’ve got a real hunch I’d like him – because no doubt, we’re on the same wavelength.

An eight-year veteran of the state House, he now serves a northwest Missouri senatorial district, having been elected Senator last year.  He’s been a family physician in the region since 1985, past president of the Buchanan County Medical Society and is Chairman of the Board of the Missouri Doctors Mutual Insurance Company (MoDocs), which he helped form in 2004.

So if anyone can understand the complexity of the American healthcare system, he can!

Senator Schaaf’s bill would require insurance companies to provide consumers with online information about the cost of healthcare services through various medical practices. He obviously understands how critical healthcare cost transparency is to average consumers who are becoming more and more responsible for the cost of healthcare and need a way  to see what healthcare truly costs.  Right now, consumers really have no clue because the American healthcare system has shrouded costs behind a privacy curtain.

As a result, Missouri is now one of several other states that are beginning to work for greater transparency.  In late January, the Georgia Public Policy Foundation suggested in a Gwinnett County’s Talk Gwinnett news story that addressing the issue will help the state begin saving money on the care of nearly 600,000 state workers. On January 1, the state of Wisconsin enacted a new healthcare transparency law to show consumers the true cost of healthcare.  And that came on the heels of the state of Massachusetts, which is now using cost transparency to reduce the bite that healthcare insurance premiums are taking out of individual, state and municipal budgets.  All three have realized that empowering consumers with greater cost information will help them make more informed healthcare purchase decisions, saving everyone money.

Dr. Schaaf is SO on track.

The news story quoted him as saying that his cost transparency bill would bring competition to healthcare, helping lower healthcare costs through other means beyond government:

“People would pay less for healthcare if they could shop for the cheapest places,” he said.  “We have people in our state who don’t know which provider to go to because they don’t know how much money it’s going to be out of pocket.  Insurance companies won’t tell you the day before, but they will tell you the day after.  But by then it’s too late.”

Yep.  So incredibly on track.

I believe when you give consumers solid, transparent information about their healthcare and show them the value-driven care options available, invariably they make far more insightful decisions about their care and its quality. And that helps everyone’s bottom line!

Kudos to Dr. Schaaff.  I hope his fellow senators see the wisdom of voting for his bill to usher in greater cost transparency.  The citizens of Missouri will greatly benefit!

The Power of Information in Consumer Hands

Those who have been around me for any length of time know how passionate I am about the need to make the American healthcare system far less daunting for consumers – especially concerning the cost of care, which, for years, seems to have held something of protected status.

With a greater number of U.S. employers striving to curb healthcare costs, often by offering consumer driven health plans, employees and their families are finding themselves increasingly accountable for “shopping” and paying for their healthcare. Now more than ever before, it is critical for patients to understand the costs involved.

Last fall, we introduced our first Healthcare Transparency Index (HCTI) based on several million medical claims in our database from all 50 states.  It looked at prescription drugs and revealed pharmaceuticals offer the highest opportunity for cost savings for consumers – and some pharmaceuticals more than others. The Index received tremendous response, especially from those who’re shopping for prescription drugs and using more of their hard-earned money to do so.

We recently released our second Healthcare Transparency Index, this one focusing on routine medical services.  In the process, we uncovered four key drivers of cost variances in the data – age, “retail vs. traditional office visits,” location and specialty office appointments.  Just a few interesting facts that consumers should take note of:

  • For check-ups and well visits, patients age 40-to-64 will pay up to 26 percent more per visit than 18-to-39 year old patients and in that senior group, internal medicine visits represented the greatest cost variance.  Lesson?  You should be aware that there’s a lot of margin in such visits and you should ask your doctor to help you keep those costs low.
  • A child’s physical for camp, school or sports is much cheaper at a retail clinic versus in your primary care physician’s office, from a high of $160 to a low of $29.  Lesson?  Check your local retail clinic (Minute Clinic; Take Care Clinic; The Little Clinic) for such exams before traipsing off to your doctor’s office.
  • Psychotherapy as a specialty has the greatest variance by market amongst specialty medical care.  Lesson?  You should check the pricing structure of several psychotherapists before setting up an appointment with one because of significant pricing difference for similar-to-identical services.

As the country’s healthcare system moves toward the Accountable Care Organization (ACO) model, where all parties – from patients to hospitals to physicians to payors – are much more holistically involved in care, cost transparency is going to be an important piece of the puzzle.  So indexes or studies like our Healthcare Transparency Index are going to be increasingly vital to the nation’s pocketbooks.

Putting power like that into the hands of consumers makes me feel I’ve done my job.

Women are the Drivers in Healthcare Shopping

For some time now, a chief complaint among employers has been, “How do we get employees to care about their healthcare benefits and the associated costs?”  For anyone who’s read this blog, you know that I’m a bit obsessed with that mission as well.

Last week I read two new research reports that allude to an increasing consumer involvement in healthcare.  Many of the statistics reveal that companies have a real opportunity to be heroes to their employees where cost transparency is concerned. Music to my ears.

  • In the February issue of EBRI Notes, the Employee Benefit Research Institute (EBRI) reported on its 2010 Health Confidence Survey, concluding that “women, younger individuals and those with more education were more likely than others to seek information on cost, quality and access. It also found that individuals who experienced an increase in either premiums or cost sharing were more likely than those who did not experience such an increase to seek (healthcare) information.” And a quarter of the population looked for costs of different treatments, doctors and hospitals.
  • In another study focused on how employees make healthcare decisions, the National Business Group on Health stated that 75 percent of workers use their employer as a resource for medical and health information. Additionally, 69 percent rate their employers as completely, very or moderately trustworthy sources of health information.

In my judgment, the upshot of both of these studies is that as more consumers (read: employees) are paying a greater share of the cost of healthcare, they’re beginning to seek more information about the quality and cost of care.  We’re seeing this trend reinforced in the use of our Cost Transparency Solution. Data development from the change:healthcare informatics team shows that even in an employee population that is only 37 percent female, more than 50 percent of the employee engagement with the change:healthcare Cost Transparency Solution is through women.

We know that women are responsible for more than 80 percent of healthcare purchase decisions. It’s great to see that play out within our own client base. American’s know how to shop – American women are experts. The healthcare system should cater to women, and shopping.