Consumer transparency on MRI costs saved $220 per test, increased competition among hospitals
Aug 4, 2014
CHICAGO — Aug. 4, 2014 – Consumers with access to price information chose less expensive MRIs, saving $220 per test in total health system costs, according to a study published in the August edition of Health Affairs.
The study also showed that consumer pricing awareness was linked to a shift in provider behavior, decreasing the use of high-cost hospital-based MRIs and reducing price variation between hospital and non-hospital facilities. The $220 in savings represents a combination of consumer out-of-pocket expenses and health plan or employer medical costs.
Commissioned by AIM Specialty Health (AIM) and conducted by HealthCore Inc., the study reviewed data from about 100,000 members in WellPoint affiliated health plans in the Northeast, Midwest and Southeast from 2010 to 2012. About 61,000 health plan members were part of a consumer education program administered by AIM Specialty Health (AIM) that proactively shares MRI cost information on alternative providers with comparable capabilities close to their home. Consumers receive this information by telephone when their MRI is scheduled at a facility of much higher cost than available alternatives. These program participants were compared to about 44,000 members who were not included in the education program.
“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.”
“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.”
Between 2010 and 2012, the average price of an MRI for consumers that were not included in the program went up by $125. During this same period, the price of an MRI decreased by $95 for consumers with price transparency and education creating a net health system savings of $220 per test.
Price variation in health care services has been at the forefront of health care discussions for several years. For example, price variation for imaging scans is widely documented with at least one study showing that MRI scans can vary in price from $300 to $3,000 with no demonstrated difference in quality. 1
As consumers continue to embrace insurance products with lower premiums and higher deductibles, out-of-pocket costs per procedure or service are expected to rise. “Members have traditionally been responsible for only a small portion of a procedure’s costs,” said Brandon Cady, president and CEO 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.”
“We did see a modest decrease in costs to consumers for their out-of-pocket expenses, however cost reductions varied widely corresponding with a wide range of benefit plan designs,” said Andrea DeVries, senior author and HealthCore director of payor and provider research. “At least 30 percent of those in the program group had no cost sharing at all, making the findings all the more striking.”
As consumers chose less expensive imaging options, providers in their community responded by negotiating new, lower prices for MRIs for all health plan members, not just those in the education program. The average price for hospital-based MRIs decreased by $175 per test after the program was implemented.
AIM Specialty Health
Lori McLaughlin: 317.407.7403
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AIM Specialty Health® is focused on driving appropriate, safe and affordable care through the healthcare system. For more than 35 million members covered across 50 states, D.C. and US territories, AIM targets the quality and cost of clinical services including radiology, cardiology, oncology, specialty drugs and sleep medicine. As a national leader in specialty benefits management, AIM helps health plans, providers and employers focus on the value of health decisions with an integrated suite of solutions combining clinical excellence, technology and superior customer service. AIM is a wholly owned subsidiary of WellPoint, Inc. (WLP). www.aimspecialtyhealth.com.
About HealthCore, Inc.
HealthCore, based in Wilmington, Del., is the clinical outcomes research subsidiary of WellPoint, Inc. HealthCore has a team of highly experienced researchers including physicians, biostatisticians, pharmacists, epidemiologists, health economists and other scientists who study the “real world” safety and effectiveness of drugs, medical devices and care management interventions. HealthCore offers insight on how to best use this data and communicates these findings to health care decision-makers to support evidence-based medicine, product development decisions, safety monitoring, coverage decisions, process improvement and overall cost-effective health care. For more information, go to www.healthcore.com.
WellPoint is one of the nation’s leading health benefits companies. We believe that our health connects us all. So we focus on being a valued health partner and delivering quality products and services that give members access to the care they need. With nearly 69 million people served by our affiliated companies including more than 37 million enrolled in our family of health plans, we can make a real difference to meet the needs of our diverse customers. We’re an independent licensee of the Blue Cross and Blue Shield Association. We serve members as the Blue Cross licensee for California; and as the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as the Blue Cross Blue Shield licensee in 10 New York City metropolitan and surrounding counties and as the Blue Cross or Blue Cross Blue Shield licensee in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), and Wisconsin. In most of these service areas, our plans do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia and Empire Blue Cross Blue Shield, or Empire Blue Cross (in the New York service areas). We also serve customers in other states through our Amerigroup and CareMore subsidiaries. To find out more about us, go to wellpoint.com. wellpoint.com.
Hussey PS, Wertheimer S, Mehrota A. The association between health care quality and cost: a systematic review. Ann Intern Med. 2013;158(1):27–34