In our market-driven system, choice in goods and services is seen as good for consumers. Armed with knowledge of how much they will pay and what they will get in return, consumers in the market will compare their options and make decisions that yield them the most benefit.
Not so in health care. In this sprawling sector of our economy there are no shortage of providers and facilities offering treatment for nearly every imaginable condition. One only has to type "orthopedic surgeon" into Google to get a feel for this phenomenon.
But unlike in markets for most goods and services -- from pizza delivery to automobiles - in which prices are visible and comparison shopping is the norm, the health care marketplace generally lacks such price transparency. A 2012 study estimated that health plans and members could save $36 billion annually if the cost of 300 common procedures for members in employer-sponsored plans were reduced to their median price.
Meanwhile, the health care system has a different problem when it comes to judging quality of care. There is a glut of information related to healthcare quality but that information all too often has limited relevance to a patient's condition or the services being sought. Additionally, different organizations frequently use different quality measures, making it very difficult to compare providers. As a result, consumers find it very difficult to assess the relative value (quality versus cost) of the different care options and providers that are available to them. As an industry we have to reduce the variability in the measures of quality and retain only the ones that are most meaningful, refine those metrics to decrease the burden of collection and make them more easily obtainable and present quality in ways that are relevant to consumers. In the interim, consumers need guidance to navigate all the information in the marketplace.
With consumer-directed health plans becoming more prevalent, consumers are being given a greater financial stake in their health decisions, and thus more incentive to take control of their health care journey. But to increase the likelihood that they will get the highest quality care for the lowest cost - that is, maximize the value of their care -- consumers need the right information at the right time to have a bearing on their decision making.
Enter transparency. A growing number of employers are asking for tools to help members in their health-benefit plans gain insight into prices and quality so that they can become more informed consumers of health care.
One such tool offered by Health Care Service Corporation is Benefits Value Advisor, a program in which members receive guidance via telephone from a live health care expert who can access cost estimates for more than 1,500 medical procedures. Additionally, members can get quality metrics and patient reviews for nearly all in-network providers and access to online health tutorials to better understand specific conditions and procedures. They also can get help setting up appointments and live transfers to clinicians for members who qualify.
BVA has led to considerable cost savings in 2013 for members in Blue Cross and Blue Shield plans in Illinois, New Mexico, Oklahoma and Texas. That year, more than 90 percent of members who contacted BVA found they could save if they received care from an alternate provider. Members who used the alternate provider suggested to them saved an average of $2,000 per claim off of what their service would have cost. In total, use of BVA led to $6.7 million in savings between member and plan portions of cost.
A national manufacturer of industrial supplies based in Texas recently approached HCSC's plan in that state to help cut its rising health care costs for its nearly 3,000 plan members, a figure that includes employees and their families. An increasing number were using consumer-driven health plans, and the employer wanted to empower them to choose the highest-value options for care.
Benefits Value Advisor helped the manufacturer realize significant cost savings in 2014. It reduced health care costs by $58 per employee on average. For each employee that called an advisor and chose a lower-cost provider, the company realized an average cost savings of $2,158 per claim.
Health care is not a commodity -- it is our lives. Giving consumers the full picture of quality and price information gives them "value transparency" and ultimately makes the health care industry more effective and efficient at serving patients. As Warren Buffett put it, "Price is what you pay, value is what you get." We believe that our members deserve the highest value care possible.