October 2017

Looking at Variability in Pricing Solutions Through Shared Data

To help make the health care system work better, Blue Cross and Blue Shield of Texas (BCBSTX) has implemented the Benefits Value Advisor (BVA) program. BVA helps members get cost estimates, schedule appointments and assists with benefit preauthorization.

How often someone uses health care services, where they go for care and how much they pay for care are a few of the foundational elements in the ongoing national struggle to control rising health care costs.

An independent study published by the Health Care Cost Institute shows that employers and insurers that provide private health care coverage can pay for services that vary widely in price, depending on the state where people live. Further, they found that prices can even vary across a broad range within the same cites and metropolitan areas, based on site of service and contract rates. Those price differences exist for even the most routine diagnostic procedures.

Wide differences in the price for common medical services comprises one potential cost driver that BCBSTX works to impact. We believe that variability of pricing is a leading cause of unnecessary health care costs for our members. For example, an MRI of the brain can cost anywhere from $443 to $4,273 in Houston, TX.

Broad ranges in pricing across the state are found in common, as well as high-cost procedures. Moreover, there is no consistent correlation between cost and quality (i.e., higher cost does not necessarily equate to higher quality).

While many health care consumers may have yet to establish a habit of researching how much a procedure will cost them in advance, BCBSTX is working to change that behavior. Our BVA program provides educational resources to help members learn more about CAT scans, MRIs, endoscopy and colonoscopy procedures, as well as surgeries such as joint replacement and bariatric surgery.

Amy Barbour, a customer service specialist in the BVA program, says the typical member’s mindset about health care is at odds with how Americans generally approach other choices. “While people would never dream of not knowing the price of a part for a car repair,” she says, “in the medical world, not knowing the costs doesn’t seem to throw them for a loop.”

But Barbour believes things are slowly changing. “Ten years from now,” she says, “I think it will be unheard of to not know health care costs in advance.”

At BCBSTX, we believe that cost and quality transparency and actionable data will enable payers and providers to better collaborate on ways to help make health care more affordable. BCBSTX is rolling out new data solutions this year and next to help inform providers’ clinical decisions and perhaps give them deeper insights into their care costs and quality.

Providers also will have increased electronic access to members’ health summaries before or at the time of service. With access to these health summaries, providers may see unmet health care needs to address, or they may be able to avoid the cost and inconvenience of a member receiving redundant or unnecessary treatment.

Additionally, new performance and quality reporting will be made available to help providers pinpoint and prioritize opportunities for cost and quality improvements. These tools make information transparent and therefore can help identify factors that explain the cost impact caused by variability in pricing.

These are just a few examples of how BCBSTX is helping to make the health care system work better, together with providers, for the benefit of health care consumers.