MA Health Insurers Have Made Good Progress in Price Transparency, But Significant Work Remains

Share on Facebook
Share on Twitter
Share on
LinkedIn
+

Read press coverage of this report in the Boston Business Journal and State House News Service.

Tools are more user friendly and cover growing number of procedures, but still used by just a small fraction of potential market

BOSTON – A Pioneer Institute study finds some significant improvements in the online cost estimator tools created by Massachusetts’ three largest health insurers, but there is much still to be done for the carriers to maximize the opportunity price transparency represents.

Online cost estimator tools give consumers/plan members online information about a range of information for outpatient and many inpatient procedures. These tools display the amount that has to be paid by consumers to any particular provider, how much the plan pays the provider, and information about provider quality.  Consumers can compare several providers at the same time.

“Price transparency can help initiate reforms that reduce healthcare costs and allow market forces to drive patients to lower-cost, higher-value providers,” said Barbara Anthony, primary author of MA Health Insurers Have Improved Their Consumer Price Transparency Efforts, But Significant Work Remains.

A 2012 state law required health insurers to develop online cost estimator tools by October 2014.  In 2015, the advocacy group Health Care for All (HCFA) assessed the tools developed by Blue Cross Blue Shield (BCBS), Harvard Pilgrim Health Care (HPHC), and Tufts Health Plan, which together controlled nearly four-fifths of the state health insurance market.  HCFA gave each a grade of “C.”

The same law also requires hospitals and doctors to provide consumers with prices of services upon request. Previous Pioneer studies showed very poor compliance by Massachusetts providers with the Commonwealth’s transparency law.

As a follow up to the HCFA study, in late 2017, Pioneer assessed the same carriers’ performance and found their tools more user friendly.  They cover between 700 and 1600 procedures, a vast improvement over the initial numbers of procedures available in 2015.  Importantly, Pioneer found that all three carriers are embracing incentive/reward programs to attract workers at entities with 250 or more employees to lower-cost, high-value providers.  Pioneer’s study was done with the full cooperation of the carriers.

Under incentive/rewards programs, employees are rewarded by either small or no co-payments or cash rewards from $25 to several hundreds of dollars for choosing lower-cost, high-value providers such as outpatient surgical centers rather than a hospital outpatient clinic. HPHC has developed a program called SaveOn that makes it easier for members to switch providers to avoid co-pays or earn cash rewards.  BCBS has aggressively embraced and marketed cash incentive programs to both businesses and municipalities.  In all cases, the plans say they are embracing incentive programs and transparency to compete with large national carriers here and regionally.

Both the HPHC’s and THP’s tools are a significant improvement over their initial cost estimator tools.   After their common vendor pulled out of the market, the carriers had to entirely revamp their tools. The results are new, easy-to-navigate online tools which display out-of-pocket consumer costs, the remaining deductible, and quality metrics.

Since 2015, BCBS has made several improvements that make its product more consumer friendly: by simply changing the name of its tool from “Find a Doc” to “Find a Doc and Estimate Costs,” by making the tool much more prominent on its website, and clearly showing both out-of-pocket costs and remaining deductibles. BCBS also has an improved website for consumers.

Despite significant progress, however, deficiencies remain. The carriers had about 297,000 aggregate inquiries on their cost estimator tools from early 2014 through 2017, compared to a potential market of at least three million people that the three carriers cover.

“The number of aggregate inquiries shows that carriers still have a lot of work ahead to achieve price transparency’s potential to rein in healthcare costs,” said Pioneer Institute Executive Director Jim Stergios.

In 2015, Massachusetts’ median annual household income was around $70,000 and the average family in the Commonwealth spent about $20,000 on premiums and cost sharing.  “These figures show that transparency in healthcare is important to the budgets of Massachusetts families,” added Stergios.

HPHC’s and Tufts’ estimator tools still don’t provide cost data on many behavioral health procedures.

The BCBS site is compatible with online translation tools, but none of the carriers’ cost estimator tools are readily available in a language other than English.

Anthony noted that “While state government has not provided any compliance leadership for consumer price transparency, now, after overcoming resistance and a lack of support, the market is waking up to the potential benefits of price transparency and incentive programs.”

Comments from Harvard Pilgrim Health Care, Blue Cross Blue Shield and Tufts Health Plan:

“In a rapidly changing healthcare environment, providing consumers with transparency around cost and quality information is important and will help them make informed healthcare choices,” said Harvard Pilgrim President and CEO Eric Schultz. “We at Harvard Pilgrim have long been committed to promoting the value of transparency, and we are pleased to see that Pioneer Institute continues to keep a public focus on the issue. We were happy to work with them on this report.”

“Blue Cross is pleased that the Pioneer report acknowledges our ongoing commitment to providing our members with state-of-the-art tools to make informed decisions about the cost and quality of their healthcare.  Members who understand their benefits – those who aren’t surprised by bills and feel empowered – are much more likely to be satisfied members and engaged patients. I thank Pioneer Institute for their continued focus on this issue,” said Andrew Dreyfus, BCBS President and CEO.

“Transparency is essential among all stakeholders in healthcare to ensure that customers and employer groups can make informed healthcare decisions,” said Tom Croswell, President and CEO at Tufts Health Plan. “[O]ur new, easy-to-use tool enables members to not only find high-quality, high-value providers in their area, but also see their potential costs from the beginning to the end of a procedure. The new tool is simpler and far surpasses the capabilities of the first generation of transparency tools. We applaud Pioneer Institute’s work on keeping this important issue at the forefront.”

About the Authors

Barbara Anthony, a lawyer, is a senior fellow in healthcare at Pioneer Institute focusing on healthcare price and quality transparency.  She is also an associate at the Harvard Kennedy School’s Center for Business and Government.  She served as Massachusetts Undersecretary for Consumer Affairs and Business Regulation from 2009 to 2015.

Scott Haller graduated from Northeastern University with a Bachelor’s Degree in Political Science. He started working at Pioneer Institute through the Northeastern’s Co-op Program and continues now as the Lovett C. Peters Fellow in Healthcare. He previously worked at the Office of the Inspector General.

About Pioneer

Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous, data-driven public policy solutions based on free market principles, individual liberty and responsibility, and the ideal of effective, limited and accountable government.

Get Updates On Our Healthcare Research and Events!

Related Posts

Massachusetts Should Disclose More Information about Its Recent Reduction in the Official Count of Long-term Care Deaths

The public -- particularly in Massachusetts, where COVID-19’s toll on elders has been so great -- has a right to know how many deaths occurred in state-regulated eldercare facilities, and how that compares to the total number of deaths. But the state's new counting standard clouds this information, and should be corrected or at least disclosed.

Preparing For Disaster: Health Readiness Expert’s Performance Review

Hubwonk Host Joe Selvaggi talks with Emergency Preparedness expert Dr. Paul Biddinger about how experts plan for disasters, and what went right and wrong in this pandemic.

COVID-19 Vaccine Tracker

Pioneer is proud to present a new vaccine tracker, the newest tool in our COVID-19 tracking project. Pioneer distilled the vaccination data down to those who are either fully vaccinated or partially vaccinated, by all the demographic categories published by the DPH. Use the new tool below to compare rates among groups, by municipality and by county. We will update the data every week.

Doctor Heal Thyself: Insider’s Prescription For Healthcare Reform

Host Joe Selvaggi talks with surgeon and New York Times bestselling author Dr. Marty Makary about the healthcare reform themes in The Price We Pay, the 2020 Business Book of the Year.  The discussion covers the value of price transparency, provider accountability, and performance information to drive better medical outcomes and improve doctor and patient satisfaction.

New Analysis: ICER Framework Ignores Patient Preferences, Innovation & Societal Benefits in Evaluating Cost-Effectiveness of New Cancer Treatments

Pioneer Institute today released a new analysis, The QALY and Cancer Treatments: An Ill-Advised Match, that examines the alarming methodological and contextual shortcomings of the Quality Adjusted Life Years (QALY)-based methodology in evaluating new cancer therapies. The Pioneer Institute analysis reveals five specific problems with ICER’s evaluation of cancer treatments and demonstrates the urgent need to prohibit the use of the QALY amid trends in rapid cancer innovations and personalized medicine.

Digesting Digital Medicine: Healthcare Benefits When Smart Pills Track When Taken

/
Host Joe Selvaggi and Pioneer Institute’s Bill Smith talk with Valerie Sullivan, President and CEO of EtectRX about the health care costs of improperly taking prescriptions and the promise of smart pills to signal and track medicines when ingested.

Patient-centered Model Outshines Insurance-centered Healthcare during Pandemic

/
Joe Selvaggi talks with Pioneer Institute Senior Fellow Josh Archambault about his newest research paper entitled, "Direct Health Care Agreements: A New Option For Patient-Centered Care That Costs Less and Reduces Provider Burn-out" and how this emerging service model provided its patients with comprehensive health service throughout the COVID-19 pandemic.

ICER Proves Its Lack of Business Acumen, Again

/
A recent Institute for Clinical and Economic Review (ICER) “Report on Unsupported Price Increases,” concluded that: “Among the top drugs with price increases in 2019…ICER determined that seven of 10 lacked adequate new evidence to demonstrate a substantial clinical benefit that was not yet previously known.”  The impression left by the report is that drug companies arbitrarily raise prices without good reason.  As with so many ICER products, the study is misleading and demonstrates a profound lack of business acumen.

Study: Massachusetts Should Embrace Direct Healthcare Options

Especially in the COVID era, many are looking to alleviate the increased burden on the healthcare system.  One solution is direct healthcare (DHC), which can provide more patient-centered care at affordable prices and is an effective model to increase access to care for the uninsured, underinsured and those on public programs like Medicaid, according to a new study published by Pioneer Institute.

COVID-19 Vaccine: The End of the Epidemic is Within Reach

/
Join Host Joe Selvaggi and Virologist and Investor Dr. Peter Kolchinsky as they discuss the rapid development, efficacy, and rollout of the newly approved COVID-19 vaccines.

Voting for Health: Party Opinions, Election Results & the Healthcare Policy Implications of Election 2020

/
Join Host Joe Selvaggi as he discusses with Harvard Professor Bob Blendon his New England Journal of Medicine Special Report, "Implications of the 2020 Election for U.S. Health Policy," which covers broad differences in both party’s view of the role of government in health care and what the election results will mean for Americans.

Hockey Sidelined Again

/
After months on the sidelines, youth hockey players across the state eagerly laced up their skates in August. Under current youth and amateur sports guidelines, locker rooms operate at 50 percent capacity, only one spectator should attend per player, and players wear masks on the bench. Unlike in MIAA high school sports, players do not wear facemasks while they play, except during faceoffs. 

Survey: Consumers Want Healthcare Price Information, But Few Realize It’s Available

Great strides have been made to increase healthcare price transparency through online cost estimator tools and a state law that requires providers to give out price information. Yet despite the eagerness of consumers to access prices and out-of-pocket costs, many are unaware that such information is available and don’t know how to access it, according to survey results published by Pioneer Institute.

Staving Off Disaster: Lessons from Covid Applied to the Epic Battle Against Drug Resistant Microbes

/
Join Hubwonk host Joe Selvaggi and Pioneer Institute’s Bill Smith as they discuss with inspirational public health advocate Gunnar Esiason the findings of his latest white paper, "Antimicrobial Resistance: Learning From the current health crisis to inform another."  The episode looks at the challenges to global health presented by evolving drug resistant diseases and how the lessons learned from COVID-19 could potentially save millions of lives.

Study: Growth of Antibiotic-Resistant Infections Could Have Massive Human, Financial Costs

The world was blindsided by COVID-19, but a new Pioneer Institute study finds that even as we continue to wrestle with the pandemic, another threat looms that scientists have long known about but the nation has thus far failed to address: the growth of antibiotic-resistant infections. “Market dysfunction and perverse Medicare reimbursement rates have led to a growth in infections that resist antibiotics,” said Gunnar Esiason, author of “Antimicrobial Resistance: Learning from the current global health crisis to prevent another one.”  If we don’t solve this problem, the human and economic costs are likely to be astronomical.”

Getting Nursing Home Care Right

Pioneer Institute has long recognized that seniors deserve the best of care and that innovative policy solutions are necessary to ensure that this population enjoys a high quality of life in their later years. In the 1990s, early 2000s and most recently in 2017, the Institute dedicated Better Government Competition topics to policy issues related to aging in America. Our goal each time was to find solutions and to take advantage of new innovations that would improve the quality of life and care for the elderly.

Drug Rebates: How Pharmacy Benefit Managers Manipulate Price & Limit Choice

/
Join host Joe Selvaggi and his guest Dr. Bill Smith as they discuss the complex incentive structure between drug manufacturers, health plans, and pharmacy benefit managers. In this episode, they focus on how drug rebates work and how a system intended to optimize value may actually deliver higher costs and fewer choices. Joe and Bill also use this framework to speculate on the price of a COVID-19 vaccine, and who will likely pay for it.

Confronting COVID Constraints: How Certificate of Need laws stifle innovation, increase costs, and reduce quality in healthcare

/
Join Joe Selvaggi and co-host Josh Archambault, Pioneer Institute's Senior Fellow in Healthcare, as they talk with Institute for Justice’s Jaimie Cavanaugh about the effects of Certificate of Need laws on the healthcare system.