Price Transparency

ACHP health plans recommend modern standards to simplify the health care experience

THE ISSUE

For most Americans, navigating the U.S. health care system is overly complex and prohibitively expensive. Overall health care costs continue to grow at a remarkable rate.

In response to this unsustainable situation, policymakers are developing new rules to make health care prices more predictable and visible. At the federal level, the Trump Administration and the Department of Health and Human Services are using the regulatory process to push health plans and hospitals to publicly display how much medical procedures costs. The move mirrors the direction that more than 20 states have taken over the past several years and underscores the belief that price transparency can be a tool to keep costs in check.

Health care in the U.S. is at an inflection point, and health plans are in the best position to lead th e transparency effort by helping consumers act on their purchasing power to select services and providers based on cost efficiency and quality considerations.

The Recommendation

At a time when health care price and quality tools are varied in their usefulness and utilization, the Alliance of Community Health Plans (ACHP) recommends a baseline, minimum set of attributes set the standard for price transparency tools. In this issue brief, ACHP lays out a roadmap for certification of tools that would guide better decision-making by consumers.

The Case for Certification

Individuals and families are spending more of their own money on care without the most basic cost and quality information.

Some health plans, like Florida-based AvMed and Utah-based SelectHealth, are making progress by providing their members with digital tools that allow them to see what they will likely pay for medical and clinical services before their visits. To encourage consumers to use these tools, both plans are using more traditional means of outreach—financial incentives, renewed educational and marketing campaigns—to build utilization.

AvMed members, for instance, can get price estimates for a range of services, and some can earn cash incentives for making value-based choices. SelectHealth enrollees can make care determinations based on estimates for more than 400 procedures—and soon will be able to factor in provider quality information as well.

ACHP believes that early adopters should be recognized when they offer these cutting-edge apps to their customers. To that end, ACHP is supporting and promoting a new certification framework for price transparency tools that would provide a seal of approval from an independent body, providing assurances to consumers that the tools they are using meet and exceed core transparency principles.

To advance this effort, ACHP developed a framework for price transparency certification to help consumers evaluate which tools would be most useful to them. Certification of health plan transparency tools would represent a stamp of approval akin to the widely recognized one used by Good Housekeeping for home product reviews. The certification would signal to consumers that the health plan’s publicly available information is accurate, timely and relevant to patients and family members trying to make informed decisions about their care.

The ACHP framework is not a “one-size-fits-all” approach, but rather allows for customization based on consumer needs. Certification should be provided by an unbiased third-party organization. At a minimum, price transparency tools should include the following:

• Search and find capabilities: Individuals should be able to see out-of-pocket costs unique to their plan benefits, such as the status for deductibles and co-pays associated with the selected provider. Searching by billing code, descriptive term, provider name, geographic proximity and other natural filters applied by consumer store fine searches would be mandatory. Information should include industry or custom quality ratings and provider reviews. Estimates would be based on accurate information updated at least monthly, and would extend to out-of-network allowed amounts.
• Cost estimates must be provided for a variety of items and services: This includes clinical encounters, medical procedures, tests, supplies, drugs, durable medical equipment and other fees. These estimates must be displayed and provided in ways that are easily understood by consumers.
• Personalized guidance: Transparency tools must provide information that is based on an individual’s actual medical benefits, history, and costs. The tool must provide plan-specific information to help people understand their options and implications of their choices, such as how certain venues of care may be more appropriate for an illness or injury. Information must consider consumer convenience, provider preferences around gender, language, certifications and other key details. These tools must also provide plan-specific information to inform consumers of provider and facility options, including virtual care , and must be able to provide accurate information for medical services that may be capped by the plan.
• Location, distance and convenience: To be truly consumer-focused, price transparency tools need to factor in what is most convenient for members, such as comparisons that consider travel time, distance and sites-of-care. Transparency tools should be available at the time a person needs them, and easy to access online and on mobile devices.
• Meaningful patient engagement: Health plans must employ communication, education and other engagement strategies to drive utilization. Health plans should also create programs that include premium refunds for smart choices and engage members as a community by socializing smart health care service choices and best practices for making those choices. Health plan cost reductions may be returned to members as premium reductions, either directly or through employer rate reductions.
• Complex patient help: For more complex care needs, such as surgeries, tools must provide a typical treatment timeline, including information on time and cost for all related services and recovery.
• Consumer input: Health plans must survey their members about what’s important and most useful for them. This could be done through focus groups, community panels or advisory groups that are made up by individual plan members.

There’s no single winning formula to get price information in the hands of consumers. But there are some early lessons to draw on.

Foco should know. A little more than five years ago Priority Health started down the path to develop what would become their much-praised Cost Estimator tool.

“We wanted to champion transparency for a long time,” Foco said, adding that the idea was born, in part, by growing numbers of Priority Health members who were in high-deductible health plans. “Our members have more liability on their own, and that is what we aimed to address with this tool.” As deductibles and members’ cost share continue to rise, so does the value of transparency solutions.
Anyone who has ever tried to shop for a medical procedure will tell you the frustration they have felt at every turn. In one focus group, Foco said, a participant became visibly upset when presented the scope in variation across medical procedures. “People don’t want to believe that there’s that much variation in prices,” he said. But even a routine search in Priority Health’s Cost Estimator will show price differences of hundreds if not thousands of dollars for the same procedures.

Priority Health took that frustration to heart. As the organization thought through what it wanted to offer its members, it borrowed from the school of behavioral economics. Priority Health developed a system that is easily accessible, highly visible, and streamlined, so that members can quickly get real-time estimates of their personal out-of-pocket cost for hundreds of procedures and thousands of drugs. There are also built-in financial rewards for using the tool, incentivizing individuals who simply search for a procedure and learn more about it. Members who select procedures that are priced below the fair market price can earn back hundreds of dollars, depending on multiple factors.

In addition to the rewards program, Priority Health is borrowing a page or two out of the consumer retail handbook with behavior and event-triggered price shopping invitations and personalized “Next Best Action” prompts.

The results are impressive. In a recent one-month span, Cost Estimator saw 7,361 unique visitors, an increase of 50 percent from the previous year. The tool logs more than 150,000 visits each year, with about 14 percent of Priority Health members using it annually. Overall, Cost Estimator has tallied $11 million in shared savings and paid out roughly $2.6 million in rewards to members.