Get consumers to treat medical care like a car purchase

Imagine this scenario: Your car died and isn't worth repairing, so you go to a car dealership to buy a new one. The salesman offers you a shiny red car that fits your needs, so you agree to buy it (because you consider the salesman to be the expert) and drive your new car right off the lot. About two months later, you receive a bill from the dealership for $50,000. You're in shock and awe that your car came with such a high price tag and you're not in a position financially to afford the extra costs.

While this sounds like a wildly ridiculous situation--who would even imagine buying a car without researching the available options, comparing choices and understanding all the costs involved?--that's what happens every day in the health insurance industry.

Since most consumers don't know about healthcare prices, including how much a simple office visit or a complex surgery costs, they can't make wise decisions about their own medical care.

But insurers are working hard to change that. For example, Pittsburgh-based Highmark has its own cost transparency tool, which allows its members to see estimated prices for medical procedures, as well as compare and rate doctors and medical facilities.

To learn more about Highmark's price transparency initiatives, FierceHealthPayer spoke with Matt Fidler (pictured left), vice president of consumerism and retail marketing for the insurer.

FierceHealthPayer: Can you explain how Highmark's care cost estimator works?

Matt Fidler: Highmark members can log into our members' website, where they have access to the care cost estimator and a slew of other transparency tools that are all aimed at helping folks understand the cost and quality of the care they can receive. The reason we created the care cost estimator was because we're starting to see, as every other insurer is, many employers shifting more cost responsibility to individuals for which they provide plans.

It just makes sense that  we need to create a set of tools that people can use to understand and investigate the cost of care they receive. And that's really where the care cost estimator was born.

The tool itself works from a national database of about 100 million different claims contributed from all of the Blue Cross Blue Shield plans around the country. It's a massive, robust database that allows members to really investigate the cost of a procedure or a bundle of procedures in their area. What makes it proprietary to Highmark is the interface and the way we use and present and show the data on our member site.

I live in Pittsburgh, but travel all over the place. So if something happened to me while I was in Florida, I may not know what the hospital systems there are. But because this data set is so broad and our tool can adjust for location, you can actually use the tool anywhere in the country to understand and investigate costs while you're traveling.

The cost estimator also takes into account all the different components of a service like a knee replacement that's made up of five, six or seven different procedures that all play into the total costs. The tool's estimated price includes every touch that's involved in the knee replacement and it lays out those costs.

FHP: Could you provide an example of how a member could use the care cost estimator?

Fidler: I'll use myself as an example. If I'm in the tool and select that I'm looking for care for myself, it defaults to the address on file for me. So I choose the option to show providers within 25 miles of where I live, and then I can select what kind of care that I'm looking for, including inpatient, outpatient, office visit, diagnostics and labs.

If I pick diagnostics, I have another set of choices and I select an EKG. Obviously the member has to have a little bit of information about what type of service they're going to get, but when folks use this tool, they're often looking at a doctor's order or something else from the doctor about what they need to have done. So I go through all that information and the tool provides all the providers offering that service within 25 miles of my location and all the costs associated with that procedure.

The great thing is it doesn't just show me what the rack rate cost is for each procedure. It also pulls in my own product information, including whether I have met my deductible and co-insurance. So you're truly getting your own personalized rate.

For example, the tool says the EKG costs $118, but based on my own plan's information, my cost is estimated to be between $11 and $13. So that will change throughout the year as a consumer is building up to meet the deductible or has met it. The tool uses that real-time information, looks at their product design, looks at whether co-insurance and deductibles are met and returns their personalized cost estimate.