Helping patients use transparency tools and understand their healthcare expenses could help lower costs throughout the industry, according to experts who discussed the topic at the 2023 Michigan State of Reform Health Policy Conference.
Brian McLane, senior director of customer experience and consumer insights at Priority Health Plan, noted that 40% of Americans avoid care because they don’t understand the high costs associated with it.
“It’s about helping people understand, as they’re about to seek care, what the cost will be,” McLane said. “We’ve done it through a cost estimator tool. We offer that to every one of our members. It’s a shared savings program where people use lower-cost providers, and when they shop, they will get money back. That money goes back in two ways: reduced out-of-pocket costs at the time, and a reduced premium over time.”
McLane discussed CMS requirements that mandate hospitals to make costs public and shoppable. They can either offer a price estimator tool or display costs in a consumer-friendly manner.
Price estimator tools must provide estimates for as many of the 70 CMS-specified shoppable services that are provided by the hospital, and as many additional hospital-selected shoppable services as is necessary for a combined total of at least 300 shoppable services. Costs must be listed in a comprehensive machine-readable file that includes gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.
“CMS picked 70 of those, [and] the hospitals got to pick their own 230. There was actually no regulation around what the file format should look like. And penalties were relatively miniscule. When nobody wants to publish what [their costs are] for competitive advantage reasons, early on, about 20% of hospitals published prices. Even though you had 20% publishing, the majority of those files were very different. So it’s really difficult to make sense of it.”
— Brian McLane, senior director of customer experience and consumer insights at Priority Health Plan
Over time, CMS provided recommendations for clarifying the files, and increased penalties, McLane said.
“The penalty side has gotten people to pay attention,” he said. “We’re now at about 70% of hospitals that are publishing prices. They’re very complex. Just downloading these things is an act in itself. Trying to compare files from one hospital to another is very difficult.”
Most group health plans and issuers of group or individual insurance began posting pricing information for covered services as of July 1st, 2022, McLane said.
“CMS said health insurance and self-funded employers should play a role in this transparency as well,” he said. “They put out machine-readable files, which all health insurance plans and funded groups had to have in place by June of last year. The files have more clarity than the hospital side did. But there’s still a great gap inside those. They don’t include things like value-based payment arrangements in a meaningful way. They don’t include incentive programs.”
Despite the recent emergence of price transparency tools, many consumers still face challenges in shopping for services. Michigan Primary Care Association (MPCA) President and CEO Phillip Bergquist said he did some price comparing about 18 months ago.
“I price compared [for] a procedure for myself,” Bergquist said. “I went to a hospital website, and pulled down a file to look at the (current procedural terminology) code associated with the procedure, and I got a number. And then I had to make sense of that number in relation to my deductible and my out-of-pocket maximums. And about a week ago, in preparation for this panel, I did the same thing. And it was equally terrible both times. They haven’t gotten better.”
McLane said it is important for providers to help their patients understand their procedures and care patterns.
“You’ve got to try and make sense, at the provider level, of what’s actually going to occur,” he said. “Once you have a system that allows you to do that, how do you help people understand the tools available? Our traditional approach has been one size fits all. That doesn’t happen either. So I think what you need to do is use a lot of predictive analytics to understand how [to] interject at a point in time when a person is likely to need that information.”
Philip Lieffers, director of finance at Novello Physicians Organization, said Novello began posting costs on its website in 2020.
“At Novello, in our market, there has historically not been a lot of competition. In 2020, we printed our costs on our website for every person to see. And we get a lot of great responses. For some people that are cost-driven, it definitely helps. And we hear from them.”
— Philip Lieffers, director of finance at Novello Physicians Organization
Some people are too set in their ways to shop around, however, Lieffers said.
“They go exactly where their physician tells them and they don’t think about the cost,” he said. “They’re not using calculators. They’re not going after those rewards. So we’re also trying to concentrate on quality scores going to employers, because they’re a big player in the market. And it’s going to take a long time to change that mentality. From my perspective, if we have more competition in the market, we can get people to understand what those costs are.”
Bergquist said he spends a lot of time working with community and Tribal health centers across the state, and serves many low-income residents enrolled in Medicaid. MPCA operates 370 locations, and cares for one in 14 residents, with 90% of its patients at or below 200% of the federal poverty level, he said.
“And half or more of the average health center’s patients are enrolled in Medicaid,” Bergquist said. “Medicaid comes with some unique benefits and challenges. In a lot of the communities we operate in, we don’t have a lot of choices in terms of where a patient might seek care. We have portions of our market where you might be able to price compare (with) three or four different providers (for) the same service, and think about the balance, quality, and costs that provider offers, and make an informed decision.”
Many patients in those areas do not have multiple options for care, however.
“A lot of our patients are facing a reality where they don’t have three choices. Maybe they don’t have two choices. So the realities around cost wind up feeling a lot different. There are a lot of barriers to the idea of picking somebody who [costs] less money. If I’m a Medicaid beneficiary, I might face a transportation barrier getting to (a) provider I don’t know that costs less money vs. the one that’s down the road and might be more expensive. I can face health education and literacy challenges, and [have trouble] understanding which one is truly less money.”
— Phillip Bergquist, president and CEO at Michigan Primary Care Association
MPCA has found success in supporting patients through transitions, particularly focusing on patients who make frequent emergency room visits, Bergquist said.
“We’ve had some good successes in relation to high utilizers of the emergency department,” he said. “You can probably think of a person, if you work for a health system, that uses the emergency department five or more times a month. We’re having a lot of success with community health worker interventions, reaching out to that person and having a plain conversation about why they’re using the emergency department. Because there’s always a reason. It might not be a reason that makes sense to me or you, but there is a reason.
Maybe that person is lonely. Maybe they are not traditionally housed, and they are going to the emergency department to feel safe. Maybe they don’t have solid access to food, and they’re going to get a meal at the emergency department. Maybe they’re not comfortable with their primary care provider. We have a lot of success with community health workers having a conversation around why [they’re] heading to the emergency department.”