For years, people have been going to the doctor, paying a 810 to 830 copay and going on with their day without thinking about what it truly costs for that doctor’s visit. With the advent of consumer-directed health plans, individuals are beginning to pay closer attention to their health-care expenditures.
Until recently, it has been difficult to determine how much to set aside in dedicated accounts because the cost of doctor’s fees and other healthcare services are typically unavailable to the general public. One national health insurer, Aetna Inc. of Hartford, Conn., is looking to change that scenario.
In August, Aetna began providing members with the prices it negotiates with physicians for hundreds of medical procedures, diagnostic tests and office visits. The program, which is being piloted in Cincinnati, Davton and Springfield, Ohio, Northern Kentucky and Southeast Indiana, aims to let consumers know what they can expect to pay at the doctor’s office before going in for a visit in order to better gauge their out-of-pocket health-care expenses. Aetna members now have online access to a doctor’s discounted rates for up to 25 of the most common office-based services.
This is good news, according to Aetna executives.
“The biggest impediment to effective consumerism in health care has been the unavailability of relevant data on health-care quality and cost,” says Ronald Williams, president of Aetna. “We are taking the lead on opening what is often perceived as the ‘black box’ on physician-specific pricing. As more Americans begin managing their health-care dollars, they are increasingly interested in the ‘price tag’ for the health-care services they receive.”
Aetna is aiming to provide consumers with this information to help them make more informed decisions about their health-care services.
“We have been providing tools to help consumers make health-care related decisions for some time,” says Robin Downey, head of product development at Aetna. “Our members have had access to estimated physician cost information via Aetna Navigator, our password-protected member Web site, and are able to view in-network versus out-of-network rates for physicians in specific geographic areas, along with gauging the cost of chronic conditions, such as asthma and diabetes. With the growth in consumer-directed health plans, we felt it was time to take it to the next level–to begin offering true transparency of health-care costs.”
Aetna held focus groups with network physicians and members, in addition to representatives from local and state physician professional organizations as well as large group practices in Ohio, to guide the creation of the program.
“The physicians we spoke with agreed that patients should understand what their services cost, in addition to the need to make this information easily accessible and understandable,” says Downey. “Throughout the pilot program, we will continue to get feedback from members and physicians so that we can continue to enhance and improve these services.”
A SHROUD STILL SURROUNDS QUALITY
While many health-care consultants and medical providers applaud Aetna’s efforts because it sheds light on the real cost of health care, they agree there are still many challenges ahead, the major one being how to measure quality.
“The consumer is the force that drives cost transparency,” says Harvard Business School professor Regina Herzlinger, a long-time advocate of consumer-directed health care. “As soon as this information becomes more widely available, physicians will need to become more competitive in their pricing, in addition to focusing more attention on how they measure the quality of care provided.”
“For too long, the medical industry has shielded consumers from transparency on cost and quality,” says Stephen Neeleman, CEO of HealthEquity Inc., an administrator of health savings accounts based in American Fort, Utah. “Physicians today need to provide the highest quality for the lowest price. While we’re trying to be more transparent about price, it’s often difficult due to additional fees from treatment facilities, surgeons, anesthesiologists, hospitals, and other costs involved in treating a patient.
“The goal,” says Neeleman, “should be to provide a fair market price for our services and work with patients to determine what makes the most sense for them–such as having a procedure performed on-site at a doctor’s office or at a hospital or clinic.”
Unfortunately, says Hal Heaton, professor of finance and associate director of the Center for Entrepreneurship at Brigham Young University in Provo, Utah, “Health care does not compete like other industries. When was the last time you saw an advertisement by a health-care provider that says, ‘Come to us for the highest quality kidney stone removal at the lowest price?’ Today, health care competes by offering more expensive service because no one pays much attention to the cost. The concept of HSAs opens myriad entrepreneurial opportunities, and will ultimately lead to more specialization and competition based on both cost and quality by health-care providers.”