Consumerizing Health Care Cost Estimators

InsuranceNewsNet

By Jose Miguel Santana

The growth in high-deductible health plans (HDHPs) in both the group and individual markets has shifted the costs of health services from health plan to consumers. Thus, there is a growing demand for cost and quality transparency when it comes to medical and health care services.

Consumers want transparency in health care just as they want transparency in shopping and dining. As platforms such as Yelp and Amazon continue to flourish, consumers will want health care to become a more overtly service-based industry, one in which consumer desires shape products. Most health plans already have responded to this, releasing health cost calculators to help demystify the costs of procedures.

Although all cost estimators are not created equal, the better ones, available through health plans like UnitedHealthcare, are excellent resources for customers interested in learning about and comparing the cost and quality of services provided by local practitioners. Health insurers here have an opportunity to sell plans not only based on plan benefits, premium cost and deductible amounts but also on the costs a customer may spend on a health care service. Similarly, a broker’s client relationship provides an advantage as they may know specific health care services and procedures their client uses or needs.

After analyzing cost estimators located on the member websites of nine leading health plans, Corporate Insight found that cost estimators are fairly prevalent. However, not all of those cost estimators present comprehensive views of the information most relevant to consumers, such as how much a procedure or treatment will cost during each stage of its execution and how much associated costs, such as medication and follow-ups, will be.

Specifically, higher quality cost estimators provide members with an experience similar in nature to that of Yelp with its customer reviews and to Amazon with its price comparisons, detailed product descriptions, product reviews and filtering options.

How much will health care cost?

When it comes specifically to cost data, only 33 percent of health plan estimators provide a local average cost of treatment estimate. With the level of variation involved in the cost of treatments, estimators should highlight cost relative to location. Members should have the option to sort results in a variety of ways. Those ways should include sorting from least to most expensive, presented with a review metric to give members a sense of how much providers and facilities charge in their area and how their services are received.

Patients often are surprised by the final bill after receiving a treatment or procedure because they either do not account for or are unaware of the cost of the procedure and the post-procedure services.

Complete estimates should reflect the costs throughout all of stages of a treatment, including the evaluation, surgery and recovery stages. Estimates also should include all costs associated with those stages, such as medicine, facility fees and therapy services. As crucial as this may be, our research revealed a lack in this area, with only 44 percent of estimators displaying details in stages and providing costs and fees for services throughout the whole procedure or treatment.

More important than the overall cost of a health care service is knowing the amount that a patient will pay out-of-pocket. The out-of-pocket cost is more complicated to calculate because it is specific to members’ plan and benefits. However, it is incredibly important for members, particularly those with deductibles and high out-of-pocket maximum health plans.

By housing health care services cost estimators behind the member portal as well as offering them to brokers, health plans can successfully provide estimates with plan specifics for customers. Our research identified that 89 percent of estimators display how much of the treatment’s total cost the member is responsible for out-of-pocket as well as how much the plan will cover. However, few feature visualizations with an in-depth look at how members’ plan benefits will pay for their health care service as well as current and remaining balances, pre- and post-procedure.

Cost is clearly important, but it is obviously not the only factor when choosing a treatment. According to Healthgrades research, consumers are twice as likely to select a specialist or surgeon when they have access to three objective metrics — experience, hospital quality and patient satisfaction.

As with other consumer-focused shopping platforms, individuals are extremely interested in and influenced by the ratings and experiences of other customers. Forty-four percent of the health plans in our research include patient satisfaction ratings, recommendations and reviews. However, we expect to see more plans incorporate this feature. This offers members additional transparency by providing satisfaction ratings and review metrics that offer unfiltered opinions on health care providers.

Because they have to pay more out of pocket for health care services and are aware of highly varied health care costs, health plan members are being cost-conscious and are shopping for services and procedures. Cost estimators are a good way to help confront these cost discrepancies as well as help build trust between member and health plan and patient and provider. Also, by advising and comparing procedure cost estimates with clients, when first shopping for plans, brokers help provide transparency to such services that otherwise take clients by surprise.

Health care services cost estimators have added functionalities such as responsive design and patient reviews within the past year. However, consumer demand and an ever-improving online retail shopping experience will drive the development of these tools further still.

We expect to see future enhancements in their design and additional layers of transparency — especially among those plans that are not currently offering a comprehensive breakdown of expense. We also expect to see more reviews and ratings available directly within the interface, and mobile accessibility providing members with an optimized experience regardless of device type.

Jose Miguel Santana is an analyst for Healthcare Monitor, a research service of Corporate Insight. Jose may be contacted at [email protected].