Health benefits vendor WellPoint decided to find out if consumer choices in medical care could be influenced by help with comparison shopping. The answer it got was a resounding yes.
In a release, WellPoint described the "education program" one of its subsidiaries, AIM Specialty Health, developed for plan members. WellPoint commissioned a study of these plan members to determine if an informed consumer would alter behavior in making a specific medical care decision.
The program "makes health plan members aware of MRI imaging costs and proactively shares relevant information about alternative providers close to the member's home." The study analyzed data from of 61,000 members WellPoint health plans in the Northeast, Midwest and Southeast, and focused on their selection of an MRI provider.
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Between 2010 and 2012, these members were contacted by phone after they had made an MRI appointment at "a facility of much higher cost than available alternatives." The facility was most often a hospital, which charged more for MRIs than competing facilities. The plan members were informed about other MRI facilities near them that offered essentially the same service for less money.
The upshot: Plan members saved an average of $220 per test, WellPoint reported. But perhaps more important, WellPoint said, was the change in consumer behavior that the experiment revealed.
Once plan members were told of the lower cost alternatives, many chose one of the options. Meantime, hospitals that had been charging much more per MRI began to lower their fees for the service in a clear response to WellPoint's initiative.
WellPoint noted that there was basically a control group of 44,000 plan members who didn't have access to the education program. That group's MRI costs were compared to the members with access to the educational program. MRI costs increased $125 for the group without the education program, while the educational plan participants' average cost dropped $95.
WellPoint also noted: "The price for hospital-based MRIs decreased by $175 per test after the program was implemented — an indication of a provider response, as well as a shift in consumer behavior."
"The study showed that consumers are responsive to price information delivered real time as they are making health care decisions," said Sam Nussbaum, WellPoint chief medical officer and executive vice president. "And, just as encouraging, is how providers reacted to this shift in consumer utilization — with more than 30 hospitals voluntarily negotiating with our affiliated health plans to lower their MRI pricing to stay competitive in the marketplace."
AIM Specialty Health, which offers the education program, is convinced that cost-sharing with employees also played a role in the behavioral change.
"Members have traditionally been responsible for only a small portion of a procedure's costs," said Brandon Cady, president of AIM. "As costs have risen, so has member cost share, but members don't typically have efficient ways of comparing prices before receiving health services. This program reinforced to us that once members are made aware of similar services at a lower cost, they will often choose the lower cost service."
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
