Blue Cross Blue Shield Empowers Consumer Choice

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The ACA forced healthcare payers to engage with their prospects like true consumers and offer the experiences of online shopping and direct to consumer marketing. One of the most difficult online shopping experiences payers have been challenged to offer is pricing transparency. Blue Cross Blue Shield has emerged as a leader in the pricing transparency arena as a result of their partnering with Vitals. Together, through Blue Cross Blue Shield’s claim data and Vitals technology, they have released a tool that is giving consumers all new visibility into their healthcare costs. This tool is called SmartShopper.

Using a healthcare providers’ claims data, SmartShopper offers comparative pricing for over 300 procedures and tests. Because the pricing is based on claims data, the pricing on the platform includes all of Blue Cross’ negotiations and discounts with providers, so consumers see what the true price ranges for procedures are, rather than generalized estimates. Price comparisons are available for everything from imaging and cataract removal to spinal surgery and rotator cuff repair. Vitals develops the tool for BCBS plans by mapping the entire state and identifying different provider options, as well as the relative quality and cost ratios for every procedure that the identified provider offers. The objective is to recommend the highest quality, lowest cost option as a top choice to consumers.

Through access to SmartShopper, in just a few minutes, BCBS members can see exactly how much hundreds of different tests and procedures – colonoscopies, mammograms, MRIs, etc. — could cost them at facilities in the Blue Cross network within a specified distance range. For a procedure like a colonoscopy, members are finding that the difference between the most expensive place they could go to could be 305% more than the least-expensive location. In fact, a SmartShopper search showed that a lower limb MRI in the Baton Rouge area ranges from a low of $441 to a high of $2,391. In New Orleans, the same procedure ranges from $439 to $1,342. Across geographies and providers, pricing for the same procedure can vary in the thousands.

Building on SmartShopper’s earlier success with BCBS North Carolina and BCBS New Hampshire, BCBS of Louisiana was one of the highlight BCBS plans of 2017 to offer SmartShopper to their members. SmartShopper allows any BCBS customer in Louisiana to compare the cost ranges for more than 300 medical procedures based on facility and zip code. Customers can compare the facility versus the cost and distance as they would for a hotel, creating an Amazon-like shopping experience.

“Blue Cross is taking advantage of new technology and sophisticated tools to analyze our own claims data and give customers more information about how different healthcare providers compare on costs,” said Somesh Nigam, Blue Cross senior vice president and chief data and analytics officer. “We’ve worked with Vitals, a healthcare transparency company, over the past two years to bring their SmartShopper tool to our members. We want to be a source our customers can trust to navigate the healthcare system.”

Their mission, “to be a source our customers can trust to navigate the healthcare system,” emphasizes what the goal of every healthcare payer of America should be. While removing the veil that has long concealed healthcare costs, SmartShopper also supports the goals of MACRA as it creates new accountability for providers to be compensated based on service value. With BCBS network providers permitted access to the platform, they are able to see exactly how their service pricing compares to local competitors. Access to this competitive intelligence may serve as a catalyst for providers to lower their costs and for more standardized pricing structures to be developed across the healthcare system.

“If we can just give them the data … if it just steers them to the lower-cost providers, think of the pressure it puts on the highest-price provider,” Blue Cross economist Mike Bertaut said.

The tool can also affect physician behavior. Doctors who are concerned about their patients going elsewhere may renegotiate insurance contracts to be more competitive. Health care prices on average have dropped in the markets where SmartShopper is used as a result of the pressure the tool places on providers and physicians.

On the member side, SmartShopper gives the consumer the knowledge they need to choose, eliminating the days of going to a provider or facility based purely on doctor recommendation or proximity, without prior knowledge of cost. This pre-visit pricing knowledge will deliver great out of pocket savings to the consumer, eliminate surprise billing, and allow members to better plan for their healthcare expenses. Given the reality that 40% of all people who get health coverage through an employer have a family deductible of at least $3,000, smart healthcare shopping goes a long way for those paying the majority of their medical costs out of pocket.

Implementation of SmartShopper did not come without challenges though. One of the initial obstacles of SmartShopper was the inability to directly measure the savings impact. The integration of incentives has since resolved this issue, while increasing member usage. Today, patients who use SmartShopper to pick lower-cost providers automatically receive checks for $50 to $150. The amount depends on the price differential and the procedure. While Blue Cross Louisiana will pilot the program with some large employers this fall, if all goes well, the insurer eventually could offer the incentive to all its customers. While employers benefit financially through lower claims costs, employees benefit from making educated healthcare decisions.

With members gaining access to the tools they need to choose, consumers are no longer playing passive roles in managing their healthcare. Consumers are now asking questions like “why is this needed?” and “how is it relevant?” SmartShopper isn’t so much about cost savings, as it is about changing consumer behavior so that individuals can play a greater role in controlling health care costs. Transparency is the key to this behavior change, and the collaboration of Blue Cross Blue Shield and Vitals is making this transparency possible.

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