The Cost of Care

February 20, 2017


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The Cost  of Care

In a world where technology has made comparative shopping convenient and simple, Healthcare Bluebook is revolutionizing how people shop for health care while educating them on fair pricing and quality care.

By Alicia Elkin & Samantha Cart

Today, consumers have the power to search for lower prices at the click of a button for anything from clothing and shoes to computers and cars. Thanks to Healthcare Bluebook, now they can use the same method to shop for health care services.

Healthcare Bluebook is a website that allows people to price-shop medical procedures. From major surgery to a routine preventive care procedure like a colonoscopy, consumers can research the cost of that service and compare price ranges in their area.

“With Kelley Blue Book, you can look up the price for something you need before you buy it, and that’s what Healthcare Bluebook does for health care,” says Michael O’Neil, partner and senior vice president for Healthcare Bluebook. “If you needed an MRI, for example, you could get the MRI at one location for $500. Two blocks down the road, it might cost $4,000 for the exact same procedure.”

In addition to sharing an at-a-glance preview of a procedure’s price ranges, Healthcare Bluebook provides education on fair pricing, where consumers can get those fair prices and where they will be provided with the best care for what they need. This empowers patients and consumers to make financially responsible health care choices.

The Transparency Solution

The idea for Healthcare Bluebook was born when Founder and CEO Dr. Jeff Rice, who is both a physician and an attorney, was in need of a one-hour, outpatient procedure for his son’s foot. Wanting to find a great pediatric orthopedic surgeon for his son, who is an athlete, Rice searched until he found the one they needed in St. Louis.

“Jeff found himself in the role of the patient, or in this case the parent of the patient,” says O’Neil. “And Jeff, because he does understand health care inside and out, asked the surgeon where he was actually going to perform the surgery, and the surgeon said at the hospital down the road.”

After Rice acquired all of the appropriate information, he called the facility to find out how much the procedure was going to cost. When he was told it would be around $37,000, Rice was shocked. He then asked the surgeon if he operated in any other locations and found out he operated at a nearby facility two days per week. After asking the new facility for a price, Rice was stunned to find out he could get the same procedure by the same surgeon for $1,500.

“For Jeff, who has run health plans and medical groups, it was pretty shocking that he almost made such a sizeable financial mistake even though he understands health care,” says O’Neil. “He was thinking how completely at risk most patients or consumers are in the system, not knowing what questions to ask or where to turn for information they can trust, so he started the Healthcare Bluebook.”

Price, Quality, Value

Because the information aggregated on Healthcare Bluebook’s website comes from clients, such as large, self-insured employers like the state of West Virginia, the data includes actual prices paid for procedures instead of the amount charged to the insurance company.

“Our data comes from actual processed claims data so we can show what the provider’s real price is,” says O’Neil.

The most common concern when searching out a lower price for anything is that many consumers associate a lower cost with lower quality. However, research does not support this notion for medicine. Price variations in health care are not necessarily indicative of a facility’s quality of care. In fact, according to O’Neil, generally the opposite is true. The most cost-effective providers often offer the best outcomes because they’re not making as many mistakes or suffering as many readmissions, error rates or revisions.

“They’re getting it right the first time,” says O’Neil. “They’re efficient, and they’re focused on what they do. That creates less clinical variability, which leads to lower patient error issue rates, which leads to better quality outcomes.”

On Healthcare Bluebook’s website, providers are rated as green, yellow or red for cost and quality. As patients and consumers browse services, they look for a location that is green in both categories, which will ensure they are getting both the best deal and the best care.

Regardless of income, health care can be expensive. To pay more for a procedure than necessary can cost individuals, families and even the employer—who is often paying a large portion of the bill—far more than just money

“For families, the difference between paying $1,000 for a colonoscopy instead of $4,000 is significant,” says O’Neil. “That’s a new roof, clothes for the whole family, a car payment or insurance. That’s a big difference.”

Many people across the country are currently paying high out-of-pocket health care costs and are operating within a limited network, which may cause some to second-guess using a site like Healthcare Bluebook. While many providers will honor a fair price or a cash price, depending on a patient’s insurance, some providers will charge more for what would be considered an out-of-network patient. Therefore, it is important for consumers to confirm with providers whether or not they can use their insurance before seeking care.

“What we’ve found is many providers that offer the best value participate in just about every network,” says O’Neil. “Unless it’s a narrow network or some other directly contracted network, consumers will find that those high-value providers will likely take all patients.”

The Future of Health Care

The Affordable Care Act (ACA) came in on the heels of Healthcare Bluebook, which was founded in 2007. As the ACA brought more and more people into the insured category, the site’s commitment to transparency became even more relevant.

“The ACA accelerated a trend that was already happening where more and more consumers were paying for more and more of their care, especially the first several thousand dollars,” says O’Neil. “So it actually increased the need and awareness for consumers to be able to shop for health care because all of a sudden, they weren’t just paying their $50 copay. They were paying the difference between $1,000 and $3,000 for, in many cases, the same procedure.”

Even with a potential change in health care around the corner due to new national leadership, O’Neil does not foresee any changes to the company’s strategy in the coming years.

“We don’t see any significant changes to our business or to transparency from whatever comes out of restructuring,” he says. “We think a couple of trends are in place that aren’t likely to change any time soon. One is that people are going to continue to pay and probably pay even more of their health care bills, especially the first several thousand dollars. The other is the dialogue around transparency. There needs to be more of it at every level—at the state level, the federal level, the provider level, all the way through. Our view is that no matter what changes occur within the ACA or otherwise, those two trends that push toward consumerism are going to continue in health care.”

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