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Change Healthcare Names CTO

Posted Mon, October 13, 2014

By Emily Kubis, Nashville Post Cost transparency company Change Healthcare has announced the appointment of Steven Kukulka as chief technology officer. Previously, Kukulka was the director of IT for Walgreens’ Healthcare Clinic and its Take Care Health Systems division. He also has served as vice president of technology at ComFrameSoftware and as a consultant for […]

By Emily Kubis, Nashville Post

Cost transparency company Change Healthcare has announced the appointment of Steven Kukulka as chief technology officer.

Previously, Kukulka was the director of IT for Walgreens’ Healthcare Clinic and its Take Care Health Systems division. He also has served as vice president of technology at ComFrameSoftware and as a consultant for clients such as Bank of America and Goldman Sachs.

“Steve is a proven leader who has achieved tremendous success in his work across the IT spectrum,” Doug Ghertner, Change Healthcare’s CEO and president, said in a release. “I am confident that his skill set will play an important role in Change Healthcare’s ongoing success — helping ensure that we remain at the leading edge of our industry and that our health plan and employer clients nationwide achieve success in their transparency and engagement efforts.”

Kukulka received a bachelor’s degree from the University of Illinois and a master’s degree from the University of Georgia.

Seeking a Friendly, Trusted Source on Health Care Value

Posted Tue, August 19, 2014

By Jim Landers for the Dallas Morning News August 18, 2014 Prodded by government, the health care industry is letting go of a cascade of data on price and quality. With access to the Internet, you can discover what clinics charge for an MRI, what hospitals bill for childbirth and whether a generic drug is […]

By Jim Landers for the Dallas Morning News

August 18, 2014

Prodded by government, the health care industry is letting go of a cascade of data on price and quality. With access to the Internet, you can discover what clinics charge for an MRI, what hospitals bill for childbirth and whether a generic drug is available in place of a popular brand-name one.

You can find out if a hospital hosted a surgery where something was left inside the patient, how many patients are readmitted within 30 days, and whether the nurses responded well when patients called.

Even with all this data, it isn’t easy to be an informed consumer. Txpricepoint.org, the Texas Hospital Association’s pricing site, is a very useful comparison tool. But hospital prices are usually far higher than what hospitals accept as payment. Insurance companies typically pay 30 to 50 percent of the posted price — and have kept those reimbursements secret.

Several companies are offering to help make this information more useful. Insurers offer their members cost data. Others, however, pitch their services as a value to employers that insure their own workforces. A few cater to individuals.

“The one who puts all this information together in a consumer-friendly fashion, and is looked on as a trusted source, is the one who’s going to win in this sector,” said Bruce Sammis, CEO of Dallas-based benefits company Lockton.

Brian Kegley runs NewChoiceHealth.com, a site where where medical centers bid for patients. He uses hospital pricing data and quality ratings from government sources to provide consumers an overview. A consumer can review the information, then submit a request for a procedure — a colonoscopy, an MRI, a hip replacement — and get a firm date and price. The service is free for consumers.

Kegley, who is based in Pensacola, Fla., says medical centers are eager for the business, and bid aggressively.

“People shop hard for a car,” Kegley said. “Well, one good health care decision, and you can save thousands.”

Dallas-based Compass Care Engineering works with employers to provide quality and cost data based on the experience of the company’s employees. Then the firm coaches workers on where to go for the best quality and value.

Compass puts “actionable information into the hands of college-educated consultants in a research center who guide and support the patient from start to finish, including the price of each service, the identification of the right provider and facility, and the handling of all those bills,” David Toomey, Compass Care’s president, wrote in an email.

Douglas Ghertner, president and CEO of ChangeHealthcare.com, also works with employers to help lower costs and improve outcomes for workers.

“There has been massive proliferation of initiatives around transparency,” Ghertner said. “First you’ve got to make sure people understand what to look at and what to look for. And you’ve got to make sure people use these tools. The challenge we face is that people don’t take the initiative to seek cost information.”

ChangeHealthcare.com sends alerts to employees based on their health care experience. If a worker is taking a maintenance drug for high cholesterol, the alert might tell them about a cheaper generic. Ghertner said an alert recommending an alternative physical therapist might read like this: “Do you know you could save $1,200 on your physical therapy? Click here to find out how.”

“We have a marketplace that has no idea what has happened to them or how to manage it,” said Sarah Wilcox, president of Chicago-based MyHealthandMoney.com. With consumers in the dark, she said, her business focuses on helping employers.

“Hospital care, pharmaceuticals, diagnostic tests — that’s where the real costs are,” she said. “Our whole business is built around helping individuals and individual families sort this out.”

These services haven’t generated much interest in the past. But health insurance policies increasingly require consumers to spend thousands of their own dollars before the insurance kicks in. That makes the cost of care a lot more personal.

http://www.dallasnews.com/business/columnists/jim-landers/20140818-seeking-a-friendly-trusted-source-on-health-care-value.ece

How to Make the Most of Your On-site Clinic Investment

Posted Tue, August 19, 2014

By Doug Ghertner for Employee Benefit News August 18, 2014 In an effort to reign in health care costs and improve employee health and productivity, a growing number of employers are investing in on-site clinics. In fact, according to health and human resources consultant Mercer’s Worksite Medical Clinics 2012 Survey Report, between 2010 and 2012, the […]

By Doug Ghertner for Employee Benefit News

August 18, 2014

In an effort to reign in health care costs and improve employee health and productivity, a growing number of employers are investing in on-site clinics. In fact, according to health and human resources consultant Mercer’s Worksite Medical Clinics 2012 Survey Report, between 2010 and 2012, the adoption of on-site clinics by employers with 5,000 or more employees increased from 32% to 37%; and another 15% were considering adding one by the end of this year. Among companies with 500 to 4,999 employees, 15% had workplace clinics, with another 11% planning to add one by the end of 2014.

While on-site clinics do, indeed, support population health and health care cost containment – for both employers and their employees – convincing employees to use them can be challenging. This is why a personalized, proactive engagement strategy – one that educates and provides immediate opportunities for savings – is a must.

Kansas City, Missouri-based Cerner Corporation, the largest standalone health care IT company in the world, recently initiated such as strategy.

With an annual health plan spend of $80 million and more than 20,000 lives covered under its full-replacement high-deductible health plan, Cerner wanted to make high-quality health care more convenient for those covered under its HDHP; it also wanted to reduce its annual health plan costs without sacrificing quality of care. The company accomplished this by engaging its employees and their dependents to comparison-shop for health care and pharmacy services, and by driving them to the company’s on-site clinics and pharmacies.

Cerner began by implementing proactive alerts, including “ways to save” alerts  – monthly emails or texts that proactively notify users of opportunities to save on their most common and recurring health care purchases  –and targeted engagement alerts – highly targeted educational messages and reminders that support specific health and wellness initiatives.

Cerner identified the services that provided the greatest opportunities for employee savings. Then, it reached out proactively, every month, around those opportunities – letting employees know that they were leaving money on the table and guiding them through the necessary steps to take advantage of savings.

Employees were also given access to Cost Lookup, an online tool from Change Healthcare, that helps users search for prescriptions, medical, dental and vision services, and see what they would pay at a specific provider – based on their individual health plan, network and location.

On-site clinic use

The results of efforts to drive increased awareness and use of Cerner’s long-standing, yet under-utilized on-site clinics were impressive. Of employees who were presented with an on-site pharmacy option in a targeted engagement alert that included multiple pharmacy options, and who purchased the service, 93% used the on-site pharmacy. Of those, 31% were first-time visitors to the on-site pharmacy and more than 50% went back to that pharmacy to fill an average of two additional prescriptions.

Similarly, 90% of employees who were presented with an on-site clinic option in a targeted engagement alert that included multiple clinic options, and who purchased the service, utilized the on-site clinic. Of those, 22% were first-time visitors to the on-site clinic and 34% returned to the clinic for at least one additional medical service during the 12-month period.

As an example, one particular user who acted on a targeted engagement alert highlighting an opportunity to save by switching from a community pharmacy to Cerner’s on-site pharmacy, saw claims-verified savings1 of $257 per refill, or $3,084 savings per year, for a single prescription.  Another user, who responded to a ways to save alert by switching from a brand-name drug to a generic drug at Cerner’s on-site pharmacy, saw claims-verified savings of $506 per refill, or $6,072 per year, for a single prescription.

When using the Cost Lookup tool to search for health care services, engaged Cerner users performed an average of 4.3 Cost Lookup searches per year, demonstrating the sustained behavior change Cerner was looking for. Of those who followed through with prescription purchases, 79% returned to the same low-cost provider for an additional 3.4 refills on average. Of those who followed through with medical service purchases, 60% returned to the same high-value provider for an additional 1.5 visits on average.

One user, who comparison-shopped for medical services through the online cost-lookup tool saw claims-verified savings of $1,565 on a CT scan of the pelvis or abdomen.

In an analysis of the period from July 2012 to June 2013, 80% of Cerner’s employees received a ways to save alert or targeted engagement alert, and 66% of those alerts were acted on. The average savings per purchaser for medical services, when prompted by a proactive alert, was $138, while the average savings per purchaser for pharmacy services was $378 – a total average savings per purchaser of $516.

Specific to the Cost Lookup tool, the analysis found that 55% of active employees logged in and searched using the tool. The average savings per purchaser for medical services was $141, while the average savings per purchaser for pharmacy services was $312 (a total average savings per purchaser of $453).

Ultimately, in addition to helping Cerner lower its annual plan costs and optimize the value of its on-site clinics, the effort increased employee engagement by over 60% throughout the year.

Yes, on-site clinics support population health and health care cost savings all-around, but only if employees are engaged to use them. This means that employers need an engagement strategy that is proactive and personalized – one that creates awareness of the services and provides employees with the tools and information they need to shop for care and make value-based decisions. They want it – 74% of consumers expect employers to educate them on healthcare, according to the 2013 Aflac Workforces Report. Are you prepared to deliver?

Doug Ghertner is president and CEO of Change Healthcare Corporation, a firm that provides cost and quality information to consumers through employers and health plans.

http://ebn.benefitnews.com/news/ebn_hc_pharmacy/how-to-make-the-most-of-your-on-site-clinic-investment-2743305-1.html?pg=1

To Beat Inflation, Shop and Save Smarter: Deals for Boomers on Retail, Healthcare and Travel

Posted Thu, August 14, 2014

By Elizabeth O’Brien for Marketwatch There’s some good news on the economic front: wages are rising. Yet here’s the bad news: for workers, these increases are just barely keeping pace with inflation. Retirees on Social Security face an even tougher predicament: Their increases in monthly income have lagged behind the rise in cost-of-living expenses. Among […]

By Elizabeth O’Brien for Marketwatch

There’s some good news on the economic front: wages are rising. Yet here’s the bad news: for workers, these increases are just barely keeping pace with inflation. Retirees on Social Security face an even tougher predicament: Their increases in monthly income have lagged behind the rise in cost-of-living expenses.

Among boomers on either side of the retirement transition, those who don’t cut their spending will find themselves just treading water, without extra money to save for—or live comfortably in—retirement.

The average weekly earnings of all private-sector employees rose 2.1% from the second quarter of 2013 to the second quarter of 2014, while the consumer-price index for all goods also rose 2.1% during the same period, according to the Bureau of Labor Statistics. Meanwhile, those collecting Social Security received a cost-of-living increase of just 1.5% in 2014. “This is a really low number,” said Mary Johnson, Social Security and Medicare policy analyst with the Senior Citizens League, an Alexandria, Va.-based nonpartisan lobbying group, noting that the average annual increase was 3% in the early 2000s.

The Senior Citizens League analyzed typical expenses for older adults this spring and found that, while overall inflation has remained low in recent years, other costs are climbing at a sharper rate. From 2000 to 2014, for example, monthly Medicare Part B premiums grew 131%; during that same period, the Social Security cost-of-living adjustment increased benefits just 41%.

There’s all the more reason, then, to get creative when it comes to savings. Here, we’ve rounded up a few strategies for your consideration:

Use coupons—selectively

Accordion-folder coupon holders have gone the way of pay phones. These days, it’s not necessary to literally clip and file coupons, since so many discounts can be found online.

Regardless of where you find them, though, it’s easy to get overwhelmed. Television shows like TLC’s “Extreme Couponing” feature people who routinely whittle their shopping bills by hundreds of dollars—but those people also treat scoring deals like a job, spending time that the average person couldn’t possibly devote to the cause. The shows help foster the impression that couponing is an all-or-nothing sport, said Lori Felix, founder of More With Less Today, a savings website, and a deal-hunting consultant with Savings.com.

In reality, every bit of savings adds up, and it’s fine to take a more selective approach. Felix recommends novice couponers pick just one spending category to start, such as pet supplies or beauty products, and become knowledgeable on discounts in that category. For people happy to clip, many newspapers still include coupon circulars; online, websites such as coupons.comallow users to register a credit or debit card and then receive discounts whenever using the same card to make a purchase. One such deal is $5 off for those who spend $25 or more at PetSmart.

(MarketWatch’s Catey Hill recently looked at stores that are particularly generous with coupon offers; she also wrote about apps that help you manage all those coupons. Read “5 stores where you should never pay full price.”)

Coupons are harder to come by for food staples like eggs and potatoes, despite the fact that their prices have risen considerably in recent years—up 116% and 101%, respectively, from 2000 to 2014, according to the Senior Citizens League analysis. Favado is an app for smartphones from Savings.com that allows users to compare prices for common grocery and drugstore items across local stores to help users find the best deal.

Compare health-care costs

Many people aren’t accustomed to comparison-shopping for medical care, but these days that skill is becoming more important. An increasing number of employers are offering high-deductible health-insurance plans, which require workers to pay deductibles of $1,000 or more before their coverage kicks in.

Deductibles are typically even higher for people with individual insurance plans. For example, the average deductible for silver-level plans bought on the state Obamacare exchanges is $3,132, according to an analysis by Avalere Health, a consulting firm. This means that, in addition to paying monthly premiums, a consumer in the average silver plan will have to pay $3,132 out of pocket each year before insurance kicks in (except for a limited number of preventative-care and other services that are fully covered before the deductible is reached).

Prices for every type of medical procedure can vary greatly depending on where the procedure is performed, said Doug Ghertner, president and CEO of Change Healthcare, a firm that offers cost comparison tools to both employer-provided and individual health plans. Generally, stand-alone outpatient facilities are the least expensive, and academic medical centers are the most expensive, with nonacademic hospitals in the middle. Prices for knee replacements varied by a whopping 1,687% across facilities, according to a recent Change Healthcare analysis of claims data.

Most insurance plans offer online tools that allow consumers to research what their actual costs would be if they get a given procedure at local facilities. But consumers aren’t using them much, Ghertner said. To help boost awareness, Change Healthcare has started comparison-shopping on consumers’ behalf, sending people notifications such as “Did you know you could save $200 on your physical therapy?”

The need to comparison-shop doesn’t end when people go on Medicare, the government insurance plan for those 65 and over and those with certain disabilities. Part D drug plans often change their coverage from year to year, dropping and adding certain medications from their preferred lists. Those who don’t review their plan details annually could face big out-of-pocket costs for drugs that their plan dropped. The annual Medicare open enrollment period runs this year from October 15 to December 7, and consumers can switch plans any time during this period. Combing through plan details may be “miserable,” Johnson said, “but you get a good return for your time spent.”

Snag age-based discounts

Some folks aren’t eager to self-identify as a “senior,” and understandably so, given the word’s outdated connotations. But it’s best not to let semantics get in the way of savings. Felix, 57, laughed it off when she recently caught some flack from friends after receiving a senior discount at the movies. “I’d rather have the money in my pocket than worry about what the kid behind the window thinks of me,” she said. What’s more, many of these discounts begin at age 55, or even 50, so people can take advantage of them long before they’d be considered old by any reasonable definition. Indeed, some might say the term “senior” lost any meaning it had left last December when Brad Pitt turned 50—and became eligible for an AARP membership.

Some stores give older adults discounts on select days. For example, on its monthly senior discount days, Walgreens gives 20% off regularly priced merchandise to those with a store rewards card who are 55 and over and to AARP members 50 and over.

Travel still offers some of the biggest senior deals, even though many airlines have cut their age-related discounts. Among those that remain, British Airways currently has a promotion for AARP members, who can save $65 on economy flights, $130 on premium economy flights, and $400 on business or first-class flights. AARP members receive up to 25% off Avis and Budget car rentals in most of the U.S. and Canada.

Hilton Hotels offers AARP members up to 10% off hotel reservations. And Starwood Hotels has an offer where guests pay a rate equal to their birth year for the second and third nights; for example, after one night at full rate, someone born in 1964 would pay $64 for nights two and three. Guests need to be at least 18 or 21 to participate (depending on the hotel’s check-in policy), so it’s not like teenagers born in 2000 can snag a room for nothing. And certain pricier hotels add $100 to the birth year, which still might come out to much less than the full rate. Customers can check availability online or call 1-877-782-0108and ask for promo code NBR.

http://www.marketwatch.com/story/to-beat-inflation-shop-and-save-smarter-2014-08-14

What’s Working: Helping Employees Make the Most of HDHPs

Posted Wed, August 13, 2014

By Doug Ghertner As seen in Benefits Magazine, August 2014 As rising health care costs challenge employers and employees alike, more businesses are turning to high-deductible health plans (HDHPs), including consumer-directed health plans (CDHPs), to try to control costs and encourage employee accountability and participation in personal health care decisions. Kansas City, Missouri-based Cerner Corporation, […]

By Doug Ghertner
As seen in Benefits Magazine, August 2014

As rising health care costs challenge employers and employees alike, more businesses are turning to high-deductible health plans (HDHPs), including consumer-directed health plans (CDHPs), to try to control costs and encourage employee accountability and participation in personal health care decisions.

Kansas City, Missouri-based Cerner Corporation, the largest standalone health care information technology company in the world, is one of many companies making up the 56% of employers that in 2013 offered CDHPs as a plan choice. That number was up from 41% in 2010, according to Aon Hewitt’s 2013 Health Care Survey.<1>

The same survey showed the movement toward CDHPs was expected to continue, as 30% of employers were considering introducing a CDHP in the next three to five years. And while only 10% of employers offered CDHPs as their only plan option in 2013, another 44% were considering doing so by 2018.

Incentives to offer an HDHP go beyond cost savings. According to the Aon Hewitt survey, many users of HDHPs are changing their health habits for the better:

  • 60% report making positive health behavior changes.
  • 28% say they receive routine preventive care more often.
  • 23% seek lower cost health care options.
  • 19% research health costs more frequently.

Research shows that healthy employees have lower health care costs; are more productive, creative and resilient; and provide greater intellectual capital to an organization.<2,3,4>

To realize the benefits of offering a CDHP, members of Cerner’s benefits team knew they needed to educate employees to participate in value-based decision making and enable them to weigh factors like quality, cost and convenience when choosing providers, services or prescriptions.

Cerner’ full-replacement HDHP covers more than 20,000 lives, and the company spends about $80 million annually on the plan.

“We strive to empower our associates and their families to obtain their optimal level of health by offering a consumer-driven health plan, various wellness programs and high-quality, on-site services including clinics, pharmacies, fitness centers and cafes,” said Arielle Bogorad, director of worldwide benefits and wellness at Cerner. “But we soon realized that the availability of these offerings weren’t enough and that we needed to go a step further and generate increased employee awareness and utilization of resources like our on-site medical clinics and pharmacies to see a return on investment.”

To encourage employees to make value-based health care decisions, the company began sending them monthly e-mails or texts that proactively notified employees of opportunities to save on their most common and recurring prescription, medical, dental and vision purchases. It also sent targeted educational messages that supported specific health and wellness initiatives and reminded employees of the high-quality, convenient care available at Cerner’s on-site clinics and pharmacies.

“We began by working with Change Healthcare to identify the services that provided the greatest opportunities for associate savings,” Bogorad said. “Then we reached out proactively each month around those opportunities, making certain our associates knew they were leaving money on the table and then guiding them through the necessary steps to save.”

Through the use of Change Healthcare’s price transparency software, Cerner employees also were given access to web-based cost-transparency tools that help users search for prescriptions, medical, dental and vision services. Users can learn how much they will pay at a specific provider, based on their individual health plan, network and location.

The targeted engagement alerts were used mainly to drive increased awareness and use of Cerner’s on-site clinics. Of the employees who received an alert notifying them of multiple pharmacy options and who chose to purchase the prescription, 93% chose the on-site pharmacy option. Of those, 31% were first-time visitors to the on-site pharmacy, and more than 50% returned to that pharmacy to fill an average of two additional prescriptions.

Similarly, 90% of employees, who were presented with an on-site clinic option in a targeted alert that included multiple clinic options, chose to seek care at the on-site clinic. Of those, 22% were first-time visitors, and 34% returned to the clinic for at least one additional medical service during next the 12 months.

One particular purchaser, who acted on an alert highlighting an opportunity to save by switching from a community pharmacy to Cerner’s on-site pharmacy, saw claims-verified savings of $257 per refill, or $3,084 savings per year, for a single prescription.

Another purchaser, who responded to an alert on the potential for savings by switching from a brand-name drug to a generic drug at Cerner’s on-site pharmacy, experienced claims-verified savings of $506 per refill, or $6,072 per year, for a single prescription.

When using Change Healthcare’s cost lookup tool to search for health care services, engaged employees performed an average of 4.3 searches per year, demonstrating the sustained behavior change Cerner was seeking to accomplish. Of those who followed through with prescription purchases, 79% returned to the same low-cost provider for an additional 3.4 refills on average. Similarly, of those who followed through with medical service purchases, 60% returned to the same high-value provider for an additional 1.5 visits on average.

One purchaser, who comparison-shopped for medical services using the web tool, experienced claims-verified savings of $1,565 on a CT scan.

From July 2012 to June 2013, 80% of Cerner’s employees received a “ways to save” or targeted engagement alert, and 66% of those alerts were acted upon. The average savings per purchaser for medical services when prompted by a proactive alert was $138, while the average savings per purchaser for pharmacy services was $378 (a total average savings per purchaser of $516).

About 55% of active employees logged in and searched using the cost transparency tool. The average savings per purchaser for medical services was $141, while the average savings per purchaser for pharmacy services was $312 (a total average savings per purchaser of $453).

“In addition to helping us lower our annual plan costs and maximize the use and value of our on-site clinics, we increased associate engagement by over 6 0% throughout the year,” said Bogorad. “This incredible amount of participation demonstrated that providing employees with the right information at the right time can make a world of a difference for our company’s bottom line and our associates’ pocketbooks.”

Doug Ghertner is the president and CEO of Change Healthcare, a consumer engagement and cost transparency company.

 

< 1>Aon Hewitt’s 2013 Health Care Survey; available at www.aon.com/attachments/human-capital-consulting/2013_Health_Care_Survey.pdf.

<2>J. E. Reidel, W. Lynch, C. Baase, P. Hymel and K. W. Peterson. “The effect of disease prevention and health promotion on workplace productivity: a literature review.” American Journal of Health Promotion, 2001;15: 167-191.

<3>J. E. Riedel, J. Grossmeier, L. Haglund-Howieson, C. Buraglio, D. R. Anderson and P. E. Terry. “Use of a normal impairment factor to gauge avoidable productivity loss due to poor health.” Journal of Occupational and Environmental Medicine, 2009;51(3): 283-295.

<4>M. Boles, B. Pelletier and W. Lynch. The relationship between health risks and work productivity. Journal of Occupational and Environmental Medicine. 2004;46(7): 737-745.

 

Reproduced with permission from Benefits Magazine, Volume 51, No. 8, August 2014, pages 11-13, published by the International Foundation of Employee Benefit Plans (www.ifebp.org), Brookfield, Wis. All rights reserved. Statements or opinions expressed in this article are those of the author and do not necessarily represent the view or positions of the International Foundation, its officers, directors or staff. No further transmission or electronic distribution of this material is permitted. Subscriptions are available (www.ifebp.org/subscriptions). PU148020.

 

 

 

 

 

 

Facility Fees Are Wild Card in Cost Variations

Posted Thu, August 07, 2014

By Greg Goth for HealthData Management August 7, 2014 Engagement platform vendor Change Healthcare’s latest quarterly Healthcare Transparency Index (HCTI) reveals that the widest variation in costs for selected inpatient procedures and imaging services is found among the facilities where the procedure or service is performed– not among the professionals who performed them. “We often […]

By Greg Goth for HealthData Management
August 7, 2014

Engagement platform vendor Change Healthcare’s latest quarterly Healthcare Transparency Index (HCTI) reveals that the widest variation in costs for selected inpatient procedures and imaging services is found among the facilities where the procedure or service is performed– not among the professionals who performed them.

“We often hear that doctors’ fees are to blame for escalating healthcare costs,” said Doug Ghertner, president and CEO of the Nashville-based company. “In truth, it’s the facilities that exhibit the most significant variance in costs–often varying by hundreds or even thousands of percentage points.”

The Q1 2014 HCTI identified knee and hip replacements to be the procedures that vary most based on facility, with prices ranging by 1,687 percent ($1,803 to $32,225) and 1,132 percent ($2,613 to $32,190) respectively. The professional fees for knee replacements varied 127 percent ($1,864 to $4,229) and the professional fees for hip replacements varied 151 percent ($1,669 to $4,190).

Other procedures showing substantial price discrepancies at the facility level included CT scans (469 percent), ultrasounds (350 percent) and vaginal deliveries (319 percent).

The index includes a Transparency Matrix, which identifies services that are both high cost and highly variable in price. Examining data from the first quarter of 2014, eight services fell into the Matrix’s Target quadrant, including four in-patient procedures and four imaging services. To best analyze what was driving the significant variability, the HCTI segmented facility-specific costs, such as room and board, labs and anesthesia, from those related to professional fees.

The HCTI report is a quarterly measure of the costs and cost variability of various medical and dental services that consumers purchase on a recurring basis over time. The source of the healthcare cost data is the aggregation of in-network medical and dental claims from credentialed providers across all Change Healthcare clients, which has geographic coverage that spans nationally and covers 7 million lives.

The full report is available here (registration required).

http://www.healthdatamanagement.com/news/Facility-Fees-Are-Wild-Card-in-Cost-Variations-48569-1.html?utm_campaign=daily-aug%207%202014&utm_medium=email&utm_source=newsletter&ET=healthdatamanagement%253Ae2908535%253A4215836a%253A&st=email

 

Health Care Costs Driven by Facilities More Than Doctors

Posted Tue, August 05, 2014

By Shelley DuBois for The Tennessean August 5, 2014 The cost of a medical procedure depends much more on where it takes place than which doctor performs it. According to Change Healthcare’s latest Healthcare Transparency Index, the fee that facilities charge for certain procedures varies much more widely than the fee physicians charge. “This conclusion […]

By Shelley DuBois for The Tennessean
August 5, 2014

The cost of a medical procedure depends much more on where it takes place than which doctor performs it.

According to Change Healthcare’s latest Healthcare Transparency Index, the fee that facilities charge for certain procedures varies much more widely than the fee physicians charge.

“This conclusion is especially interesting, given that doctor’s fees often receive the bulk of the blame for escalating health care costs,” the report said.

For example, for four procedures — a hip replacement, knee replacement, C-section delivery and a vaginal delivery — doctors make roughly the same amount, between $2,500 and $3,000. Facilities, on the other hand, charge between about $2,500 and $11,000 for a vaginal delivery. For a hip replacement, the range is even wider — between $2,600 and $32,000.

So what does this mean for patients?

Many are paying a greater portion of their health care costs. As they become more cost-conscious, they can start to weigh in on where they go to get certain procedures. “I do think that physician-patient relationship is very important,” said Doug Ghertner, CEO of Change Healthcare. “But patients should ask their physicians if they have admitting privileges at multiple facilities.”

In many cases, he said, doctors may perform the same procedure at different places.

Change Healthcare has been putting together a cost transparency index each quarter since November 2010. In May, The Tennessean reported on the wide variability in the cost of giving birth.

Reach Shelley DuBois at 615-259-8241 and on Twitter @shelleydubois.

http://www.tennessean.com/story/money/industries/health-care/2014/08/06/health-care-costs-driven-facilities-doctors/13642177/

The Problem with Healthcare Cost Transparency

Posted Wed, July 30, 2014

Commentary by Douglas Ghertner, president and CEO of Change Healthcare CNBC, July 30, 2014 The Centers for Medicare and Medicaid Services (CMS) recently issued a report that unwittingly pinpoints a growing problem: the lack of actionable information that patients need to become effective health-care consumers. While the release of data by CMS is an admirable […]

Commentary by Douglas Ghertner, president and CEO of Change Healthcare
CNBC, July 30, 2014

The Centers for Medicare and Medicaid Services (CMS) recently issued a report that unwittingly pinpoints a growing problem: the lack of actionable information that patients need to become effective health-care consumers.

While the release of data by CMS is an admirable starting point in informing patients about the cost of health-care services, the CMS data are not true indicators of what health care really costs for you, me or even our insurance carrier. Instead, they reflect the price hospitals bill prior to any negotiation with Medicare or private insurers. Of additional concern, CMS did not make available its data about quality in the same user experience — a crucial component in making informed health-care decisions.

In order for patients to achieve what government and business have not – more affordable health services – we need to arm them with actionable information. In this way, we transform them from passive health-care users into informed health-care consumers, spurring competition in which the end result is declining costs and rising quality.

Given that individuals have more skin in the game than ever, there is plenty of motivation among patients to spur this revolution. According to the Kaiser Family Foundation, 38 percent of covered employees have a deductible of $1,000 or more for single coverage (up from 18 percent five years ago), and 15 percent have a deductible of $2,000 or more (up from 5 percent in 2008). These consumers are hungry to understand the cost and quality – or the value – of their health-care purchases.

To effectively shop for care, patients need to know the actual costs being charged by various providers, including what out-of-pocket costs they will pay based on their benefits plan. Charges for pharmacy, medical and dental services often vary by more than 300 percent even within a given network – and much of this falls on the shoulders of health-care consumers, depending on benefit design and deductible status. In the consumer world, shoppers need a powerful reason to choose a service that costs in excess of three times more than a comparable competing service – why should health care be any different?

What patients really need is timely, actionable and personalized information so they can shop for an MRI scan in the same way they would shop for a new car – by factoring in quality, cost and accessibility. Their informed choices would create a culture of competition across the diverse landscape of health-care providers, be they physicians, hospitals or pharmacies.

The power of consumerism relies on the patient’s ability to act on cost and quality information before they obtain care, not after. That means receiving relevant health pricing and quality information on their phones or in their email inbox, rather than having to seek out cost and quality information on their own.

According to a survey by the non-profit group, Catalyst for Payment Reform, 95 percent of health plans currently offer price transparency tools, yet only 2 percent of members use them. This is why actionable information – information that is automatically sent to consumers with prompts directing them to the next step in shopping for care – is so critical.

A recent analysis by West Health Policy Institute suggests that transparency initiatives could cut $100 billion over 10 years from health spending. This may be a small step towards reducing the trillions of dollars we spend each year on health care in this country, but it is a step in the right direction. Additionally, as we improve our ability to make public provider level outcomes from a quality perspective, the patient can assess the value of health-care services, forcing providers to compete on quality as well as cost.

A robust age of health-care consumerism can create enough competition to reduce health-care costs and increase health-care quality.

Douglas Ghertner is president and CEO of Change Healthcare, a firm thatprovides cost and quality information to consumers through their employer or health plan. Follow him on Twitter @nashvilledmg.

The Mistake That’s Tripling Your Medical Bills

Posted Fri, July 25, 2014

By Kelli B. Grant for CNBC July 25, 2014 To cut medical bills, consumers should take a leaf from their strategies for other big purchases: Shop around. Doing so can have a substantial payoff. A Change Healthcare analysis released this spring found that prices can vary by more than 300 percent on the same service, […]

By Kelli B. Grant for CNBC
July 25, 2014

To cut medical bills, consumers should take a leaf from their strategies for other big purchases: Shop around.

Doing so can have a substantial payoff. A Change Healthcare analysis released this spring found that prices can vary by more than 300 percent on the same service, even within a given insurer’s network of providers. (See chart below for ranges on some common services.) Sometimes the price gap is even wider.

Another study this year found that giving birth in California might cost as little as $3,000 or as much as $37,000—and that’s only for simple vaginal delivery, and after adjusting for factors such as moms who had complications.

Service

Price range

Variance

Colonoscopy

$1,379 to $4,242

208%

CT scan

$307 to $2,747

796%

Mammogram

$135 to $397

195%

MRI scan

$511 to $2,815

451%

Physical therapy office visit

$62 to $228

268%

Psychiatrist office visit

$55 to $176

219%

Tooth extraction

$79 to $195

147%

Vaginal delivery

$4,359 to $12,613

189%

SOURCE: Q4 2013 prices from Change Healthcare Corporation’s Healthcare Transparency Index.

 

Don’t think that being insured gives you license to get complacent. With more plans entailing high deductibles and other out-of-pocket costs, big price swings still matter, said Dr. Davis Liu, author of “The Thrifty Patient.”

Take that example of giving birth in California. Before factoring in deductibles or copay, a plan that covers 85 percent of the costs of hospitalization—which isn’t unusual—might mean new parents are responsible for $450, or up to $5,550.

Check out the video above for tips on getting a better price. Of course, it’s not smart to go by price alone. “Make sure you’re not compromising on quality of care,” said Liu. To do that get details from your doctor about say, what kind of imaging technique is preferable for that MRI, or qualities needed to pick a good physical therapist. Then look at ratings and reviews.

The Leapfrog Group maintains a database of hospital safety scores, while doctor ratings can be found on sites including RateMDs and Healthgrades.

 

How to Get the Same Health Care at a Quarter of the Cost

Posted Thu, July 17, 2014

The prices for getting tested and treated are all over the map. To save on your medical bills, learn to shop smarter. By Amanda Gengler for Money July 2014 You know that visiting doctors and hospitals outside your insurer’s network is pricey. What might surprise you is how big a bill you could face even when […]

The prices for getting tested and treated are all over the map. To save on your medical bills, learn to shop smarter.

By Amanda Gengler for Money
July 2014

You know that visiting doctors and hospitals outside your insurer’s network is pricey. What might surprise you is how big a bill you could face even when you stay in network. In a recent analysis of 93 types of services and procedures, Change Healthcare, a company that tracks medical claims, found that in-network prices for the same service often vary by 300% and can differ by as much as 750%.

Picking the higher-price option can cost you: You’ll typically owe full fare until you meet your ­deductible, and then usually a percentage of the bill. “Most people assume if you go in-network everyone is paid the same, so the financial implication for you will be the same,” says Douglas Ghertner, CEO at Change Healthcare. “But that is absolutely not the case.”

Your insurer or employer probably has a web tool that lists what you’ll pay for certain services at local providers, factoring in your deductible and co-insurance. Use it. For these types of care in particular, the swings in insurers’ negotiated in-network rates are wide—and you may have time to shop around.

Imaging: $511 to $2,815 for an MRI; $307 to $2,747 for CT scan

Imaging bills typically run two to three times higher at hospitals than at freestanding radiology centers, according to health insurer Cigna. At hospitals, says Brian Keigley, founder of price-comparison firm New Choice Health, “radiology is often subsidizing other service lines.” Ask your doctor for options other than the hospital (or the MRI machine his practice owns). When comparing costs, confirm that the price includes a pro to read the scan. Check that the facility is ACR-accredited, says Keigley, and make sure your doctor will accept the results.

Specialists: $67 to $207 per visit

When you need a specialist such as a cardiologist or neurologist, you frequently end up seeing whomever your primary-care doctor recommends. But you ought to know what’s behind the suggestion. Often he or she will refer you within the same health system, says Christine Riedl of health insurer Aetna. Ask your doctor how crucial it is to see this specialist vs. another MD, and get a few additional names. For common specialties, your plans’ pricing tool most likely factors in quality metrics by practice, so you can see if the one charging less meets those standards.

Physical therapy: $620 or $2,280 for 10 sessions

Hospital facilities often negotiate higher prices with insurers than standalone PT practices do, says Justin Moore of the American Physical Therapy Association. If your doctor suggests a therapist, find out if he or she specializes in your condition. Check on how many visits you’ll need, the cost per visit (some pricing tools do not include PT), and what you’ll owe (confirm that with your insurer). Ask what signs will indicate progress, such as being able to walk down a hallway in X amount of time. Says Moore: “Being able to spell that out is an indication of the quality of care.”

http://time.com/money/2993644/why-health-care-costs-vary-widely/

Patient Engagement Platform Sees Explosive Growth

Posted Tue, July 08, 2014

By Greg Goth for HealthData Management, July 2014 “Patient engagement” is a popular term currently, but the practice of providing consumers with relevant data about the clinical and financial aspects of their care is still in its infancy. Health Data Managementtalked with Doug Ghertner, CEO of Nashville-based engagement and education platform vendor Change Healthcare, about what […]

By Greg Goth for HealthData Management, July 2014

“Patient engagement” is a popular term currently, but the practice of providing consumers with relevant data about the clinical and financial aspects of their care is still in its infancy. Health Data Managementtalked with Doug Ghertner, CEO of Nashville-based engagement and education platform vendor Change Healthcare, about what the industry needs to do to tie users, providers, and payers together on applications everybody can understand and make use of.

If the statistics behind the firm’s growth are any indication, it would appear employers and health plans are more than ready to provide such platforms to their consumers. Ghertner says Change Healthcare started 2013 with 200,000 users on the company’s Software-as-a-Service platform; by year’s end there were 5.5 million, and by early June, 2014, 7.7 million.

HDM: In a recent blog post on your site, you mentioned that consumers are finally getting ready to be more involved in coordinating their care, yet at this point, overall, really useful and friendly efforts to engage the consumer seem to be lagging. What have been the historic failings of healthcare marketing to the end user?

DG: We work with large self-insured employers and health plans. While they are all equally frustrated that their healthcare costs are increasing, they are as frustrated, if not more, that they invest in disease management, wellness, or advocacy incentives and can’t get the consumer, the patient, to engage in those offerings. It’s a function of two things. It’s a function of education and awareness, and it’s a function of a lack of personalization of the experience.

On the former, for example, George Loewenstein at Carnegie Mellon University published a paper last September in the Journal of Health Economics. He surveyed people on four very basic terms–co-pay, co-insurance, deductible and out of pocket max. He found that only 14 percent of people adequately understood what those terms meant. Yet those are the very dimensions on which they are making very important purchasing decisions about healthcare.

Blue Cross of Minnesota is one of our clients. They rolled out our interactive Healthcare University not just to their ASO employer customers, but to their own employees–and out of 3,500 employees, 40 percent accessed the platform. They watched 9,000 videos, played over 19,000 games, and took 7,500 quizzes on what you and I would argue is some of the most mundane content out there. But it told us the consumer does have an interest in this stuff. We have to find a better way to deliver it. We used game mechanics, unlocking strategies, and badges and leaderboards. We created that social dynamic, and while it may seem less than bleeding-edge progressive, which is where everybody in any industry other than healthcare is, it was progressive for healthcare. It’s that type of lens we all need to take if we want people to engage.

The other is lack of personalization. There is so much media coverage today around CMS releasing chargemaster data from hospitals. There is all kinds of information about all-payer claims databases that states are creating. But much of that data isn’t relevant to the individual consumer–if that database is compiled from Aetna, Cigna and United claims, but you have Blue Cross insurance, that isn’t relevant. If that data will tell you total cost, but not what you’re paying versus what the plan sponsor pays based on your plan design, it’s not terribly relevant. The other piece of the puzzle is that very few people, irrespective of benefits design, take the initiative to seek out cost savings in healthcare. In fact, Catalyst for Payment Reform put out a paper in which they found 95 percent of plans have a transparency tool, yet less than 2 percent of their members use them. So that was the opportunity we saw to change and impact.

HDM: Historically, the way people end up choosing a doctor or a hospital has often defied conventional marketing methods. They are referred by a friend, or they are limited by their insurance plan to certain providers, for example. How hard is it to create a rational incentive tool in a market that has often defied rationality?

DG: We talked about the fact people don’t take the initiative to seek out cost savings in healthcare. We built a set of proactive alerts that were constantly crawling through someone’s claims data. We’re looking at their utilization of common and recurring services and we’re shopping on their behalf–identifying others in their network who have purchased the same service but paid less. We’re not only looking at savings opportunities, but also your claims and demographic information, and at your user preferences, like how far you are willing to travel to save, and the level of savings that serves as the threshold of when you’d like to be notified, or if you want to be notified by text instead of email. The ability to obtain those preferences is really important to ensure the information you provide them is not only personalized, but that it is also timely, relevant, and specific.

HDM: There is a large community of people who are very active, and who document their activity. Avid runners and cyclists, for example, are often obsessive about logging how much they’ve run or ridden, yet there seem to be very few, if any, relationships between healthcare organizations and the developers of these platforms. However, Apple and Google are both announcing platforms that will enable people to connect their wellness data via their mobile devices. Do you see a role for Change Healthcare in entering that niche, to get data any other than the basic consumer data?

DG: I think there’s a huge opportunity, generally. It is going to create a much fuller picture of individuals and the habits they exhibit, and provide some of the underlying data from a very user-friendly convenient utility. I think it’s very exciting. We don’t do anything in that realm today, but that doesn’t mean there aren’t going to be opportunities in the future.

One of the things we’ve seen is that our employers have said to us, “Not everything we want to promote is common and recurring, or financial in nature–how can you help us with other things and leverage the relationship you’re built?” So we’ve just launched a whole new set of products called Targeted Engagement Alerts that do focus on the preventive and wellness initiatives. That to us is the bigger opportunity: How do you do a better job of building a relationship with the consumer in a very tangible dimension, and then, using that as a jumping off point, engage them across other areas of their benefits?

HDM: Is it hard for you to strategize your company’s future moves when healthcare data exchange lags so badly behind others industries? There are silos and firewalls between consumers’ providers, and between their providers and payers.  Does it make it harder for you to plan when you have to deal with all these incompatible technologies, and also a prevailing mindset where the consumer is not at the center of the perspective?

DG: That disaggregation or panoply of unintegrated services makes it very complex for the consumer. Part of our view is how to bring that together into one user experience, called the Transparency Messenger Platform. I think that’s part of the value our clients see in us. For example, we have an employer client in New Jersey, covering 40,000 lives. They have a telemedicine provider, and an HSA administrator. They have multiple health plans and carve out pharmacy benefit. If you’re an employee of that company, if you log into our platform, you can see your HSA balance, you don’t have to go to the HSA administrator. If you do a search for an office visit, we’ll show you all the different providers in your community, but also, for the services that are relevant, we’ll show you the telemed provider in the search result.

HDM: Has the need for efficient data interchange made the way HIPAA has been written and enforced obsolete? How much control should people have over their own data versus the entities that serve them?

DG: HIPAA is well-intentioned. Data privacy is of paramount importance. I do think often times, whenever we put regulations in place that are designed to solve for every edge case, we put something in place that becomes incompatible with reality. But HIPAA is an incredibly relevant thing we deal with. One thing we noticed: The female spouse is the primary decision maker about healthcare in most families. And one of the challenges we had was the primary beneficiary might be a male who wants his spouse to be able to get the emails we send out to manage their care. It used to be somebody had to download a PDF, fill out the authorization firm, mail it to the HR team, and the HR team had to update the eligibility file. There was very little pull-through. We built a really neat electronic utility where you can see on a de-identified basis the savings opportunities your dependents have. We have an electronic utility where you can solicit permission from your spouse to be able to view her savings opportunities. The efficiency of that process goes up significantly because now it is a digital process. We have created a mechanism that eliminates that friction point.

HDM: In general, stated costs in chargemasters often don’t come close to matching real-world prices. What would have to happen on a regulatory basis or through the way markets open up to make your job at Change Healthcare easier to provide the best, most accurate information, and make it easier for consumers to understand?

DG: Availability of the underlying data is critical, first and foremost. The steps CMS is taking to make data available is a step in the right direction, but it has to be specific to the consumer. And if we’ve learned anything in seven years, cost is not the only dimension on which people make a decision–it is very much value based. Quality data matters. Convenience data matters. The consumer needs better outcomes data, and then we have to find a way to deliver that data in a format or manner they will understand. I think if that happens, we will make a lot of progress. And you have to be proactive in taking the information to the user instead of expecting them to seek it on their own.

HDM: On a platform like yours, how can you quantify the difference between different clinical techniques, such as robotic versus traditional surgical methods? Or is that something the patient has to find out on their own during the process of evaluating providers?

DG: On the facilities side, there is pretty good quality data out there. We pull in data from AHRQ, from the Joint Commission, from CMS–we can get god data there. On the individual physician side of things, outcomes data is definitely tougher to get your hands on. That’s where the market has an opportunity for improvement, and I think it will be really important. The way our tool is constructed, you are going to see a provider who specializes in traditional methods of surgery, say, because that sort of procedure is likely lower cost than a robot. Our primary sort typically is cost.

HDM: Will your tool roll consumer reviews of physicians in?

DG: Today we do take in and provide a whole host of patient review information. But we learned that, while a review from some unknown person may be of interest, what’s more relevant are reviews and opinions from your peers. So one thing we’re excited about is creating a peer-to-peer review capability, where you can solicit your network of friends, coworkers, family, and  Facebook friends–”Hey, I’m thinking of going to Dr. Smith–has anybody ever had any experience with him?” And the responses you get will be from people you know and trust. We think that’s the next forefront of that kind of thing. That element will be functional probably early next year.

(Editor’s note: this interview was edited for length and clarity)

http://www.healthdatamanagement.com/news/Patient-Engagement-Platform-Sees-Explosive-Growth-48373-1.html?pg=2

Patients Need These 6 Tools to Make ‘Consumer Driven Healthcare’ More Than a Buzzword

Posted Wed, June 25, 2014

By Michelle Synder for MedCity News June 25, 2014 Consumer Driven Healthcare. Though I’m glad that we are finally starting to put the consumer in the middle of the healthcare equation, I still cringe when I hear those words. Let’s be clear – consumers have not been driving this evolution – they have been given the […]

By Michelle Synder for MedCity News
June 25, 2014

Consumer Driven Healthcare.

Though I’m glad that we are finally starting to put the consumer in the middle of the healthcare equation, I still cringe when I hear those words. Let’s be clear – consumers have not been driving this evolution – they have been given the “gift” of financial responsibility. 15.5 million Americans are on an HSA/high deductible plan – steadily growing 15 percent over the last several years (according to AHIP 2013 census). For a family of four, out-of-pocket health spending can be up to $15,000 – the second highest household expense beyond housing.

Many would agree that it’s beneficial over the long term to move to a system where individuals can behave like true consumers – comparing prices, looking for value, evaluating alternatives and getting recommendations from “people like them.” The challenge, however, is that in order to take responsibility, consumers need “response-ability.” 

I have spent significant time looking at solutions that either enable or support the rise of the consumer – where individuals are not only more empowered, but also have the tools, resources and incentives to take charge of their health. While I have seen many interesting companies across a range of market segments, a few key areas stand out.

Selecting and understanding benefits

The days of the HR manager as benefit consultant are waning. Companies such as Connected Health are creating decision support tools based on behavioral economic theories to help consumers navigate the insurance decision making process and maximize their benefit dollars. Such tools allow consumers to make more informed choices based on their preferences, values, health status and available options.

Understanding treatment options

How many of us have been in a situation where we had to make critical health decisions with limited time or knowledge? WiserCare is trying to make it easier for consumers to figure out what treatment options are available to them, help them match their options with their preferences and values, and provide a platform to discuss the options with their provider. Another interesting company, WiserTogether, gives consumers treatment options based on outcomes data, personal preference, crowd preference, cost and benefits coverage. Instead of focusing on where you should go to get knee surgery, the product educates you on other options besides surgery.

Managing controllable health factors

As a healthcare investor, one could spend all day, every day looking at the myriad of new condition management solutions that leverage mobile and social technologies. Through the increasing use of technology to passively collect data, these solutions typically make it easier and more fun for consumers to optimize their health as well as get critical information to their clinician. While many players in the market today will end up being interesting tools or features – not companies – a few such as Omada (pre-diabetes), and Propeller Health (asthma and COPD) have the potential to become leading proprietary platforms.

While I remain excited about the new incarnation of health and wellness players, I believe the most interesting play in this space is with integration platforms that provide a more holistic solution for both consumers as well as population health managers. Welltok integrates many of the point solutions in the market (condition management programs, wellness programs, applications, tracking devices, content and communities) into one experience and uses premium reductions, co-pay discounts, gift and cards to incent healthy behavior.

Finding healthcare value

Price transparency is one of the most high profile areas in HCIT right now. Who can argue that the consumer has a right to know how much their care costs and where they can get the best value? Companies such as Castlight and Change Healthcare bring together cost, quality and benefits information to allow consumers to make more informed choices about their treatment decisions. While I believe work still needs to be done to get the right information to the right consumer at the right time, I am excited that these companies are forcing open the black box of healthcare cost and pricing information.

Getting a second opinion

I remember being shocked the first time I saw the data showing that one-third of medical diagnoses are wrong and more than 60 percent of treatment plans need to be revised.  Companies such as ConsultingMD and Best Doctors provide a starting place for getting a second opinion by helping match individuals with the right clinician based on their symptoms or condition. Better, a recently launched mobile app service developed in conjunction with the Mayo Clinic, acts as a personal health assistant for consumers. The application and service can help with second opinion consults as well as other health related topics such as health planning and insurance reimbursement.

Finding People like You

Social networks and media channels like Facebook and Twitter have changed how we interact with the world around us. But if you have a serious medical condition, most individuals are not likely to share their personal health stories. Enter PatientsLikeMe and MyHealthTeams – two examples of communities where individuals can find others like them, compare symptoms, get advice on treatment options and give back to the community by sharing their health information. Curious is taking things a step further by challenging the traditional medical research model. By opening up access to personal health data, the company is allowing consumers to start asking health related questions and testing hypotheses with the help of others who want to be part of the solution.

All of these innovative companies are setting out to empower consumers and give them the ability to participate in their health. Now it is up to the consumer to respond and take action.

 http://medcitynews.com/2014/06/missing-hyphen/

Medicare Spending on Inpatient, Post-Acute Care Varies Significantly by State: CMS

Posted Wed, June 04, 2014

By Beth Kutscher for Modern Healthcare, June 3, 2014 The CMS’ release of per capita spending for Medicarebeneficiaries shows that some states, particularly in the South, Midwest and Mid-Atlantic, are spending significantly more on inpatient and post-acute care than northern and western states. The agency released the state-level Medicare payment data at this week’s Health […]

By Beth Kutscher for Modern Healthcare, June 3, 2014

The CMS’ release of per capita spending for Medicarebeneficiaries shows that some states, particularly in the South, Midwest and Mid-Atlantic, are spending significantly more on inpatient and post-acute care than northern and western states.

The agency released the state-level Medicare payment data at this week’s Health Datapalooza conference in Washington. It also updated its database of common inpatient and outpatient charges with 2012 numbers.

Despite controversy over whether these wholesale prices are relevant to consumers—who typically pay either negotiated insurance rates or receive financial assistance—price transparency experts say the state-level data can be instructive.

“It’s exciting that we’re all having this national conversation about cost,” said Robin Gelburd, president of FAIR Health, a not-for-profit organization that compiles a national database of healthcare claims. “It’s like we’re in a living laboratory as we speak.”

The CMS’ data shows that the government spent anaverage of $8,973 per Medicare beneficiary in 2012.

Total per capita costs were highest in Louisiana (26% above average), Texas and Florida (both 20% above average). They were lowest in Wisconsin (14% below average) and Utah (10%).

For inpatient care, spending on Michigan beneficiaries was 13% above average—the highest in the country—while it was 15% below average in Wyoming. The differences were starkest for post-acute care. In Louisiana, total per capita costs for post-acute services were 74% above the national average while in Mississippi they were 14% below average.

Geographical variations in per capita spending can be attributed to a number of factors, experts say, including differences in where beneficiaries get care, technology, medical protocols, concentration of providers and cost of living.

Lifestyle and socioeconomic differences could also explain why some states are spending significantly more than others as their residents age, Gelburd said. The CMS said it did not adjust the data for differences in beneficiaries’ health status.

However, the agency did attempt to control for other factors, such as higher payments tied to local wages and compensating hospitals for the cost of training doctors.

The database includes per capita spending from 2008 to 2012. Most states remained consistent in their spending relative to the national average over the period.

The heat maps generated by numbers could drive the policy debate on national healthcare spending, Gelburd said.

Separately, the CMS’ release of the 2012 chargemaster data continued to show wide variation not just across the country but from hospital to hospital. It also renewed the debate around whether and how consumers can use this information to make decisions about where to get treatment.

For hospitals with a complicated cost structure, like academic medical centers, “the fear is that this will sort of commoditize their services,” said Brian Sanderson, managing partner, healthcare services at consulting firm Crowe Horwath. “People don’t necessarily understand clinically what’s going on here. It creates this perception that they are pricing themselves beyond the market.”

Hospitals, meanwhile, continue to insist that the charges are only a wholesale price, the jumping off point for negotiation. It’s unclear, though, whether the release of the data is prompting hospitals to adjust those prices now that they’re available for public consumption.

“I think it’s a little early to see prices go down in general,” said Clayton Nicholas, vice president of strategy and marketing for Change Healthcare Corp., which provides price transparency tools to employers and health plans. “But as consumers start shopping around on value, you’re going to see providers competing on that data.”

The Season of Healthcare Transparency – Shopping in a World of High Cost and High Variability – Part 2

Posted Wed, May 14, 2014

B y Jane Sarasohn-Kahn for HealthPopuli May 13, 2014 Yesterday kicked off this week in Health Populi, focusing on the growing role of transparency in health care in America. Today’s post discusses the results from Change Healthcare’s latest Healthcare Transparency Index report, based on data from the fourth quarter of 2013, published in May 2014. Charges for health […]

B y Jane Sarasohn-Kahn for HealthPopuli
May 13, 2014

Yesterday kicked off this week in Health Populi, focusing on the growing role of transparency in health care in America. Today’s post discusses the results from Change Healthcare’s latest Healthcare Transparency Index report, based on data from the fourth quarter of 2013, published in May 2014.

Charges for health services — dental, medical and pharmacy – varied by more than 300% in Q42013 — even within a single health network. Change Healthcare found this, based on their national data on 7 million health-covered lives. The company analyzed over 180 million medical claims. The company built the Healthcare Transparency Index (HCTI) to gauge cost and cost variability in health services over time. The chart illustrates a few of the HCTI findings: for example, that a CT scan on average cost $1,238, but can vary by nearly 800% (that’s 8x) on a patient by patient basis. A pediatric exam, which costs on average $55, can vary by 75% – while still double-digit, not nearly the variability of that high-end digital scan.

Another case in point is C-sections, for which there’s been a 60% increase since 1996 according to the National Center for Health Statistics. 1 in 3 women who gave birth in the U.S. in 2011 underwent a C-section. And the cost of C-sections varies as much as 164%, with a range of $6,680 to $17,619 in Q4 of 2013.

Don’t think that C-sections are the only birthing mode to have high cost variability: vaginal deliveries’ cost variability was 189%, ranging from $4,359 to $12,613.

Health Populi’s Hot Points:  Employers and payors will continue to shift financial risk to enrollees, forcing them to flex consumer muscles. Without transparency of prices, availability of services, and quality, the market-building intentions of those payors will be elusive and lead to less-than-optimal outcomes — both physically and fiscally for patients.

Change Healthcare notes that 64% of large employers will offer consumer-directed health plans (high-deductible plans coupled with health savings accounts) in 2016. Today, millions of health-insured Americans are in these plans, fairly green to the concepts of meeting a deductible and managing a tax-advantaged HSA. These new-new plan types, called value-based and consumer-directed plans, will deliver neither value nor consumer-empowerment without transparency and tools to arm that evolving health consumer in her/his new role. Change Healthcare offers tools for cost look-ups, and more health plans have begun to do the same. The supply-side of health care must catch up to the demand/consumer side — which is the opportunity for new entrants in health care.

Tomorrow’s post on healthcare transparency will look at trends in health care payments for consumers, and tools to help people make those payments. More tools from new entrants will be covered on Thursday and Friday’s posts on this Season of Healthcare Transparency.

A CT Scan Might Cost $307 — or $2,747, Depending on Where You Go

Posted Wed, May 14, 2014

By Deanna Pogoreic for MedCity News May 8, 2014 With access to claims data from a number of self-insured companies and insurance plans, healthcare price transparency company Change Healthcare has some interesting insight into who’s charging what for which health services. In a new analysis of more than 180 million claims from Q4 of 2013, the company […]

By Deanna Pogoreic for MedCity News
May 8, 2014

With access to claims data from a number of self-insured companies and insurance plans, healthcare price transparency company Change Healthcare has some interesting insight into who’s charging what for which health services.

In a new analysis of more than 180 million claims from Q4 of 2013, the company found the biggest healthcare price discrepancies between providers in imaging services like CT scans, ultrasounds and mammograms as well as office visits with diabetes screenings.

Change analyzes in-network claims data from its corporate and payer clients to pinpoint opportunities where their employees and plan members could potentially save money. It also shares collective knowledge from those analyses in the form of a quarterly Healthcare Transparency Index.

The latest report also notes that C-section and vaginal deliveries are particularly opportune areas for savings. C-sections cost anywhere between $6,680 and $17,619, depending on the provider. And vaginal deliveries can range from $4,359 to $12,613.

See the full report here.

Healthcare Index Shows Wide Price Ranges for Services

Posted Fri, May 09, 2014

By Greg Goth for HealthData Management May 8, 2014 The latest quarterly Healthcare Transparency Index from health education and engagement platform vendor Change Healthcare shows nine medical procedures with high costs and price variances as high as 796 percent. Even within a given network, the organization says charges for pharmacy, medical and dental services often […]

By Greg Goth for HealthData Management
May 8, 2014

The latest quarterly Healthcare Transparency Index from health education and engagement platform vendor Change Healthcare shows nine medical procedures with high costs and price variances as high as 796 percent. Even within a given network, the organization says charges for pharmacy, medical and dental services often vary by more than 300 percent.

Imaging services were the leading potential area for cost reduction opportunities for plan sponsors and consumers. From an analysis of a database including more than 180 million insurance claims from Q4 of 2013, Change Healthcare found CT scans varied 796 percent from $307 to $2,747 per scan, with an average cost of more than $1,200. In addition, ultrasound costs cited in the report varied by 411 percent.

Report findings also included inconsistent pricing for vaginal and Caesarean section deliveries. Vaginal deliveries, ranging 189 percent from $4,359 to $12,613 per delivery, were labeled as a high-cost and high-variance service. Meanwhile, as the prevalence of C-section deliveries increases–60 percent since 1996, according to the National Center for Health Statistics–so does the variation in cost, which currently runs from $6,680 to $17,619 per procedure.

Five preventive services mandated by the Affordable Care Act and provided without charge to consumers were named in the report as opportunities for targeted interventions, particularly among the public and private insurers and employers who are now absorbing all costs associated with these tests and procedures. A standard office visit with diabetes screening ranged in price by 300 percent, while a mammogram screening showed a 193 percent price variation. Other mandated services included in the report include a screening colonoscopy (189 percent price variation), office visit with lipid screening (183 percent price variation), and an office visit with pap smear (93 percent price variation).

The source of the healthcare cost data is the aggregation of in-network medical and dental claims from credentialed providers across all Change Healthcare clients, which has geographic coverage that spans nationally and covers more than 7 million people.

The report can be downloaded here.

http://www.healthdatamanagement.com/news/Healthcare-Index-Shows-Wide-Price-Ranges-for-Services-48011-1.html

Which Medical Procedures Vary the Most in Cost, and Why You Need to Know

Posted Thu, May 08, 2014

By Eleanor Kennedy for the Nashville Business Journal May 6, 2014 Brentwood-based Change Healthcare has released its latest Healthcare Transparency Index, again citing CT Scans, MRIs and office visits with diabetes screening as three of the most variably priced procedures in health care. CT Scans varied in cost by 796 percent, MRIs by 451 percent and office visits […]

By Eleanor Kennedy for the Nashville Business Journal
May 6, 2014

Brentwood-based Change Healthcare has released its latest Healthcare Transparency Index, again citing CT Scans, MRIs and office visits with diabetes screening as three of the most variably priced procedures in health care.

CT Scans varied in cost by 796 percent, MRIs by 451 percent and office visits with diabetes screenings by 300 percent. Other services on the Top 9 list included C-section and vaginal deliveries, colonoscopies, office visits with lipid screening, ultrasounds and mammograms.

But while price transparency and increased consumerism have been growing priorities in the health care world for the past few years, Change CEO Doug Ghertner said the data is even more meaningful now that 8 million people have selected plans through the online insurance marketplace.

The majority of those people – about 85 percent – selected plans in either the silver or bronze metal tiers, all of which have much higher deductibles and out-of-pocket maximums.

For those people, Ghertner said, the ability to judge the most cost-effective way to get the treatment they need for what they can afford to spend becomes increasingly important.

“The market continues to see this trend towards higher-deductible plans,” Ghertner said. “These types of transparency tools become that much more necessary because you’ve got folks paying that much more out of pocket.”

Price variation is driven by four primary factors, Ghertner said: setting of care, in-network vs. out-of network, care mix by providers and provider leverage in negotiations.

Right now, consumers on the whole are not exceedingly aware of those factors, but as deductibles continue to increase consumers will look to educate themselves and seek out cheaper options, Ghertner said, citing Change Healthcare research.

“The importance of transparency is heightened as you move to this individual market,” he said.

http://www.bizjournals.com/nashville/blog/2014/05/which-medical-procedures-vary-the-most-in-costand.html

Childbirth Costs Can Vary Widely

Posted Thu, May 08, 2014

By Shelley DuBois for The Tennessean May 6, 2014 Though childbirth is a rite of passage, the cost of giving birth in America is all over the map. The price of a typical delivery can cost anywhere from $4,359 to $12,613, according to new data from Nashville company Change Healthcare. Cesarean sections are even more expensive, […]

By Shelley DuBois for The Tennessean
May 6, 2014

Though childbirth is a rite of passage, the cost of giving birth in America is all over the map.

The price of a typical delivery can cost anywhere from $4,359 to $12,613, according to new data from Nashville company Change Healthcare. Cesarean sections are even more expensive, generally — ranging from $6,680 to $17,619.

Every quarter since November 2010, Change Healthcare has published a Healthcare Transparency Index, monitoring the cost — and variability in cost — for medical procedures including MRIs, colonoscopies, mammograms and more. The company creates the index out of in-network claims from its provider clients — those claims come from a patient population of 7 million people nationwide.

Each quarter, the index has revealed huge cost discrepancies for certain procedures. “What I think, in aggregate, jumps out is that the same trends we see in terms of variability are continuing to persist,” said Doug Ghertner, Change Healthcare CEO.

One of those trends is the price variability for the cost of delivering a baby. Previously, people didn’t have much of an incentive to scrutinize the cost of childbirth, since the copay for a standard delivery and C-section were comparable, Ghertner said.

C-sections have become an increasingly common procedure over the past 12 years, according to the Centers for Disease Control and Prevention, which says that according to its most recent data, about one-third of babies born in the country are delivered by C-section. That increase includes scheduled C-sections, despite research from the American Congress of Obstetricians and Gynecologists that suggests cesarean deliveries by maternal request can pose a higher rate of certain health risks than typical deliveries.

Patients pay higher share

But now, cost is gradually coming into play for providers, insurance companies and patients. Employers are increasingly offering high-deductible insurance plans, putting the patient on the hook for a greater percentage of the cost of procedures. Say, for example, a family has a plan that pays a deductible, plus 20 percent of the overall cost of a procedure. At the high end of Change’s most recent calculation, 20 percent of $17,619 still taxes a wallet. This could cause women to start to factor in low-cost childbirth into their requests, whenever medically possible.

That doesn’t always mean changing providers, according to Ghertner, who agrees that a woman’s relationship with a doctor is a personal one. “One of the things that we’ve tried to do to educate our users,” he said. “If you go to Dr. Smith and, no matter what, you want to make sure that Dr. Smith is delivering your baby, the price of Dr. Smith at Centennial may very well be different than the price that doctor charges at Baptist.”

In other words, many doctors practice out of various spaces. For those who do, the amount a patient pays for medical procedures such as childbirth varies, often based on the hospital rather than the physician.

Despite efforts by Change and others, we’re still a ways out from total price transparency. But patients are gaining access to new tools, Ghertner said. “Now, you’ve got not just the plan sponsors, but you’ve got the hospitals, provider community and the legislative bodies all advocating for more transparency. I think all of that creates this sort of massive tailwind that makes this top of mind.”

http://www.tennessean.com/story/money/industries/health-care/2014/05/07/childbirth-costs-can-vary-widely/8787337/

 

$200 Million Later, Was TNInvestco Worth the Risk?

Posted Mon, April 14, 2014

By Jamie McGee for The Tennessean, April 11, 2014 Christopher Parks launched Change Healthcare in 2007 to bring more transparency to health care, building the company with $1 million he raised from local investors. In 2010, a year after the state’s TNInvestco program was created with the mission of supporting entrepreneurship and job creation by funding early-stage […]

By Jamie McGee for The Tennessean, April 11, 2014

Christopher Parks launched Change Healthcare in 2007 to bring more transparency to health care, building the company with $1 million he raised from local investors.

In 2010, a year after the state’s TNInvestco program was created with the mission of supporting entrepreneurship and job creation by funding early-stage companies, Parks landed $5.5 million, $1.5 million of that coming from TNInvestco. His company has since raised $25 million more from local and national investors, allowing it to grow its staff to more than 70 employees with nearly 7 million people on the health care platform nationally.

Change Healthcare is one of 157 companies that have received funding from TNInvestco, now in its fifth year. More than 80 percent of the funds raised through $200 million in tax credits has been allocated, and investors say that while it’s too early to measure the program’s overall effectiveness, signs of success are abundant.

They point to the role the program has played in building the entrepreneurial ecosystem, the ability for TNInvestco companies to lure employees from outside Tennessee and the amount of funding the companies have been able to attract from private investors after receiving TNInvestco capital.

“It’s energized the venture capital community in this state and facilitated the building of a network of relationships within the state and outside the state,” said Townes Duncan, managing partner of Nashville investment firm Solidus Co.

As of 2013, 10 TNInvestco funds have allocated $111.2 million to Tennessee companies, which have received about $191 million in “follow-on” dollars, or additional, private investment, according to the funds. As of 2012, TNInvestco companies were supporting 577 new jobs, the majority in Tennessee, and nearly 1,400 jobs in full.

The reports detailing the number of jobs as of 2013 are being audited and are not available, according to the Tennessee Department of Economic and Community Development, which oversees the program.

Need for transparency

In 2009, the program was touted as a way to bring new jobs to Tennessee and support startups when capital was especially tight.

With millions spent on luring corporate headquarters to Tennessee, legislators and economic development staff pointed to the program as a way to build jobs from the ground up. Funds would invest in companies and split returns with the state in a liquidity event, such as a company sale or an initial public offering. Six funds were chosen to participate in 2009, and four more were added in 2010.

From its inception, the program has stirred controversy.

A venture fund not chosen to participate in 2009 filed a lawsuit concerning how the funds were selected, and some legislators questioned using tax dollars to finance companies. Others said the terms were too generous and more returns should go to the state.

In 2012, an audit found “serious and pervasive problems” with the program and said TNInvestco lacked safeguards to ensure companies receiving funding were eligible.

Legislation passed this year addresses how the state can eventually recoup returns in companies through means such as selling ownership stakes to a third party. It also gives funds more time to address noncompliance issues and increases fines for such noncompliance.

The bill stemmed from an interest to add “more transparency and greater accountability” to TNInvestco, and the liquidation rules were an oversight in the original legislation, said Sen. Doug Overbey, a sponsor.

“When you are starting a new and innovative program, you try to to look at it from all angles and anticipate a scenario, but that was one that wasn’t covered,” he said of the amendment. “I’m glad we could come back and cover it.”

Last week, Economic and Community Development informed the state comptroller that it had learned follow-on investment numbers (additional money from new investors) reported by funds had been inflated through 2012, with funds co-investing in companies both calculating the same investments in their follow-on estimates. The funds have been aware of the annual reports’ inaccuracy for 18 months, according to a letter sent to the comptroller by Ted Townsend, assistant commissioner of strategy for ECD.

The funds, which report individually, became aware of the discrepancy this week as they responded to media queries and “immediately” reported it to Economic and Community Development, according to a statement sent by Duncan. It said the error was the result of how the department aggregated reports.

Sen. Randy McNally said that although he initially voted for TNInvestco, he has concerns about the program. “Anytime (money) gets out of state control and into private control, we need to make sure we can follow the money,” he said. “The bill that was passed this year is certainly a step in the right direction. There probably needs to be a lot more transparency.”

Gauging success

Job creation and venture capital spending were cited as the program’s benefits when it was approved in 2009, but TNInvestco investors argue that at this point in the program’s life span, the follow-on capital is the most accurate gauge of success, as jobs typically come after a company has proved its value.

“Jobs follow business success,” Duncan said. “If they precede business success, they stop business success. If you hire a bunch of people and you’re paying a bunch of people too far ahead of your revenues, you violate the fundamental rule of a startup business: Don’t run out of money.”

Since Change Healthcare received three rounds of TNInvestco capital through Solidus’ TNInvestco fund, it has attracted capital from prominent venture capital firms including Mitsui Global Investment in New York, Sandbox Industries in Chicago, and HLM Venture Partners in Boston and San Francisco.

“The TNInvestco money has absolutely been a big part of bridging us from where we were as an early-stage company to … where we have brought in other investors, both locally and outside of Nashville,” said Doug Ghertner, CEO of Change Healthcare. “You don’t get to that point unless you have structures or vehicles like TNInvestco to get you there.”

Once larger firms with bigger purse strings begin looking to Tennessee for investment opportunities, that benefits all Tennessee startups, not just those receiving TNInvestco funds, said Sid Chambless, executive director of the Nashville Capital Network, which includes TNInvestco’s Tennessee Angel Fund.

Sandbox Industries, for example, invested in Nashville health care company InvivoLink before turning to Change Healthcare and Nashville-based naviHealth. It also helped launch Healthbox, a health care accelerator at the Nashville Entrepreneur Center. While these deals don’t show up in the TNInvestco annual report, they are a result of the program and will have a lasting impact on the state’s economic development efforts, Chambless said.

“The proof is in the follow-on capital going to these companies,” he said. “It suggests we are investing in really great companies that will scale.”

Five TNInvestco companies have attracted buyers, including NeighborMD in Nashville, bought by HCA’s TriStar Health System and CareSpot, and ExtraOrtho in Memphis, with the funds reinvesting their share of returns. The program also has prompted a handful of firms to move to Tennessee from other states. Health care company Shareable Ink moved to Nashville from Boston, cooling fan-maker Auramist relocated from Arkansas, and Molecular Sensing came from California.

“People are willing to move to town from outside the state if we’ll write a check,” said Joe Cook III of Mountain Group Capital, which runs TNInvestco’s Limestone Fund. “That never happened four years ago.”

Not every company has seen the same levels of growth, measured in jobs and follow-on capital. At least five companies have closed since receiving TNInvestco funds. Knoxville-based TrakLok closed after receiving $1 million, and The Smart Image, a Nashville online coupon company, closed after receiving $450,000.

Other companies have not stayed here. Krush Inc., a fashion shopping app, moved to Newport, Calif., after garnering $2 million in TNInvestco money. While Krush no longer employs Tennessee workers, the state and TNInvestco fund Tennessee Community Ventures will have access to returns, said fund manager Eric Satz.

Filling the gaps

The investors also point to the inception of programs, including Launch Tennesseeand Jumpstart Foundry, as one of the side benefits of TNInvestco. Companies that go through Jumpstart receive $15,000 from Solidus’ TNInvestco fund, which supports them as they go through the startup accelerator program and helps them develop their product or service. Several of those, including InvisionHeart and Evermind, have gone on to receive larger rounds from other TNInvestco funds or private investors.

As TNInvestco winds down with no plans for a second round, there could be a loss of momentum in early-stage funding, especially in the $2 million to $3 million investment rounds, Chambless said. Local investors are hopeful that private money, and money from the state’s federally funded Incite Co-Investment fund, helps fill the early-stage funding gaps TNInvestco has helped address in recent years. The Nashville Capital Network, Limestone Fund and TriStar Technology Ventures, each with TNInvestco funds, have launched new funds with private investors that will be directed to early capital rounds.

“TNInvestco just started the ball rolling and scratched the surface in terms of the early-stage capital needs here,” Chambless said. “There are more and more companies that are coming out of (Tennessee accelerator programs) that are seeking capital. … What keeps me up at night is the access to capital and the ability for these great companies … to be able to capitalize their business.”

Change Healthcare Offers Tools for Making Wise Choices

Posted Mon, April 14, 2014

By Jamie McGee for The Tennessean, April 11, 2014 Change Healthcare works with self-insured companies and health plans to help employees and members find cost-saving opportunities and make more-informed decisions concerning their health care. Founder Christopher Parks developed the concept for the company in 2007, when both of his parents died from cancer and he […]

By Jamie McGee for The Tennessean, April 11, 2014

Change Healthcare works with self-insured companies and health plans to help employees and members find cost-saving opportunities and make more-informed decisions concerning their health care.

Founder Christopher Parks developed the concept for the company in 2007, when both of his parents died from cancer and he realized the difficulty of managing medical bills and the need for greater price transparency.

Change Healthcare’s employers and health plans are located across the U.S., with nearly 7 million with access to the platform. Through the site, users can compare costs of health care and access educational tools that help them understand health care basics.

“Our job is really to educate people that there is variability in cost and the fact they can do something about it and then give them the decision support tools to act on that,” said CEO Doug Ghertner.

For a company that now employs more than 70 people and has backing from nationally established investment firms, raising capital has become less difficult, filled with more highs than lows compared with Change Healthcare’s earlier years, Parks said. The company has raised $30 million in capital, with $2.1 million from Solidus Co.’s TNInvestco fund.

“Nashville and Tennessee were good places to raise money if you fit into the bricks-and-mortar health care mold, but if you didn’t, then it became ridiculously challenging,” Parks said. “With TNInvestco, it actually armed, incented and supported those (venture capital firms) that wanted to make smart investments but historically had not broken outside that mold. … Without that, it would have been a longer, more arduous journey.”

http://www.tennessean.com/story/money/industries/health-care/2014/04/11/change-healthcare-offers-tools-making-wise-choices/7616425/

 

New Medical Data Create New Opportunities

Posted Wed, April 09, 2014

By Shelley DuBois for The Tennessean April 9, 2014 Starting Wednesday, the federal government is releasing health care data that have never before been available to the general public — numbers that show what doctors who treat Medicare patients charge the government and what they are actually paid. Doctors groups have fought for years to […]

By Shelley DuBois for The Tennessean
April 9, 2014

Starting Wednesday, the federal government is releasing health care data that have never before been available to the general public — numbers that show what doctors who treat Medicare patients charge the government and what they are actually paid.

Doctors groups have fought for years to stop this kind of data from being released, but the Obama administration recently decided to change course and release the numbers. The major release has excited health care observers and entrepreneurs, who are eager to discover new insight into the nation’s health care system through the use of this data.

This move follows other efforts by the Obama administration to bring more transparency into health care costs. Though many national groups, such as the American Medical Association, have been wary of the data dump, several local health care executives support the move.

“We see this as a net positive as it continues the trend towards bringing greater transparency to health care,” said Doug Ghertner, CEO of Change Healthcare, a local company that serves employers and strategic partners by helping track the true cost of health care procedures.

“There’s more to reducing costs than just knowing the numbers, so releasing (Centers for Medicare and Medicaid Services) data is a first step,” said Clayton Nicholas, Change’s vice president of strategy and marketing. “Next, customers need to know what to do with the information and be empowered to take action with it.”

The new data could aid the health care industry’s shift from volume to value, said Clay Richards, CEO of Nashville company naviHealth, which aims to help clients find high-quality, low-cost treatment options for long-term care patients.

“The Medicare fee-for-service reimbursement system has historically incentivized volume,” Richards said. “In our experience, greater transparency leads to improved practice patterns and, ultimately, better outcomes at lower costs.”

Improved outcomes

Greater transparency in other areas has already led to improved outcomes, said Dan Hogan, CEO of health care technology company Medalogix. “I am a big fan of the transparency that this administration is pushing” — namely, he says, because “if you are aware of the situation, you can begin to improve it.”

He says that already the administration’s transparency push has better aligned provider motives with patient care. “Say what you will about Obamacare or the Affordable Care Act — our data is indicating that providers are diligently preparing themselves to be measured by outcomes.”

There are several caveats to this new data: They will not reveal information about payments that physicians receive from private insurers. They will not include data for services performed on 10 or fewer Medicare members because of patient privacy concerns.

But for all the things the data don’t include, perhaps the most remarkable takeaway is that they were released at all. For many, this marks the largest opportunity yet to look behind the curtain to see how doctors are paid.

http://www.tennessean.com/story/money/2014/04/08/new-medical-data-create-new-opportunities/7485845/ 

You’ll Soon be Able to Shop Around for Your Imaging Testing Services

Posted Thu, March 27, 2014

By Barbara Mannino | Published March 27, 2014 | FOXBusiness High-deductible health plans can put consumers on the hook for several thousand dollars before their coverage kicks in, but informed consumers can put a lid on their out-of-pocket medical expenses. We can compare prices on pretty much everything we buy nowadays, and experts predict we will soon be doing […]

High-deductible health plans can put consumers on the hook for several thousand dollars before their coverage kicks in, but informed consumers can put a lid on their out-of-pocket medical expenses.

We can compare prices on pretty much everything we buy nowadays, and experts predict we will soon be doing the same with our health-care needs.

In fact, Peter Mazonson, a practicing physician and cofounder of ClearCost Health, says there are already tools that enable you to take out your smart phone when your doctor indicates you need a battery of tests, and pull up a comparative list of price and quality measures at eight imaging centers within a 10-mile radius.

“’Whom do you recommend?’” you’ll ask. “Your physician will say, ‘I don’t like him or she’s a great doctor,’” Mazonson explains.

The practice may not yet be commonplace, but it’s getting there, experts say. And the first step in motivating people to become comparison shoppers is identifying the challenges patients face when navigating the big black hole in the pricing and quality of medical services.

There’s a large variability in health costs for many of our most frequently-used medical services even in the same network or ZIP code, according to a recent quarterly Healthcare Transparency Index from Change Healthcare.

The report identifies several frequently prescribed services in the $100 billion a year medical imaging market and shows varying price tags of the same service.

Among them are CT scans, which have nearly tripled in use over the last 20 years, according to Dr. Rebecca Smith-Bindman, a professor of radiology and biomedical imaging at the University of California San Francisco. MRIs, she says, have increased fourfold.

CT scan prices vary as much as 794% and range from $300 to about $2,700. The price of having an MRI varies by 450% and fluctuates from about $500 to $2,700. Two other popular tests, colonoscopies and upper GI endoscopies, vary by 450% with pricing that spans from approximately $1,300 to more than $4,000.

A more expensive test does not indicate better quality, says Clayton Nicholas, Change’s strategy and marketing vice president.

Rather, when compared to independent imaging centers or smaller hospitals, the negotiating clout of large hospital systems gives them an edge in making lucrative deals with insurers and health plans, experts say.

Due to high hospital overhead and other factors, Medicare, which creates a baseline for reimbursement rates, compensates hospitals more than it does independent imaging centers for the same services, claims Naseer Hashim, CEO of Imaging Advantage.

Yet, Nicholas says lower-cost imaging centers contribute to only 19% of nationwide imaging business.

“No other part of our economy has a six-fold price variation for the same product or service,” says Mazonson.

With pricing arbitrary and under wraps, comparison shopping has been difficult for consumers. There’s an existing perception that consumers don’t have choices when it comes to health care, says Hashim, “and people are intimidated to ask questions. I am certain when a doctor instructs a patient to get a CT scan, that patient never asks about alternative facility services or questions costs or the qualifications of the radiologist reading the film—or how long it takes to get results.”

New models can drive change

Thankfully, experts predict new companies and business models will drive change in the marketplace and make pricing more transparent and steady.

Already, companies like Change Healthcare and ClearCost are making headway in reducing out-of-pocket expenses for employees as well as their employers. For example, Change claims a consumer who uses its services to comparison shop for a pelvis or abdomen CT scan saved nearly $1,600. It’s not uncommon to find fair price imaging providers who offer the same quality at rates that are half or even a third as much as high cost providers, says Mazonson. And, Imaging Advantage, for example, uses cloud-based technology and a network of more than 300 radiologists to link operations of ER radiology departments across 17 states to show price points and service levels to consumers.

Hashim says technology interoperability creates competition in a currently noncompetitive environment. “Physicians in Wichita can now compete with doctors in New York,” he says. “You’ve introduced competition and as a result pushed up quality and service levels and lowered cost.”

What’s more, because accountable care organizations and patient-centered medical homes share the financial risks and benefits in managing and coordinating care for a community of patients, Reid B. Blackwelder, a family physician in Kingsport, Tenn., and president of the American Academy of Family Physicians, says there is less focus on churning revenue, say by ramping up patient tests and services, and more focus on the value—or harm—of a particular test for a particular patient in a particular point in time and circumstance.

Blackwelder also says when doctors know imaging prices in advance they can provide more value-based referrals. In fact, researchers at the Johns Hopkins University School of Medicine saw a 9% decrease in test orders over six months for 30 lab tests when physicians saw fees based on the allowable Medicare fee as compared to a control group of 31 tests without pricing information which rose 5.1%.

The transparency represented a “modest” $436,115 decrease in hospital charges, researchers say, but showed “evidence” that presenting providers with associated fees as they order tests is a simple way to alter behavior.

Technical advances have made the tests better and therefore useful across a range of clinical indications, says Bindman. Still, diagnostic imaging does not change clinical decision making in every situation.

Here are expert tips for savvy imaging shopping:

Ask Why. The Choosing Wisely campaign and its supporters can offer guidance when addressing health issues. The AAFP has identified 15 tests and procedures that both doctors and patients should carefully consider and openly discuss before incorporating them into a treatment plan. If you are not faced with an emergent situation (e.g., manageable back pain), time, patience, anti-inflammatory medications, stretching and other simple measures will often help, says Mazonson.

Speak up. If an advanced imaging test is ordered, ask your physician what he or she hopes to learn from the test, and how it will change management.

Know what you’re getting. If you do need imaging, work with your doctor to understand what code and subsequently test is ordered, says Blackwelder. Then call your insurer to try and discover if costs will vary from facility-to-facility.

Share your perspective. Make sure your physician hears and understands your perspective on all health decisions. Consumer-driven health puts patients at the center of care, says Blackwelder. Walk the talk.

..

http://www.foxbusiness.com/personal-finance/2014/03/27/youll-soon-be-able-to-shop-around-for-your-imaging-testing-services/

Mobile for the Masses: Technology Company Cerner Lowers Its Healthcare Costs Through Personalized Mobile Messaging

Posted Thu, March 20, 2014

By Kathleen Koster Employee Benefits News March 20, 2014 The overwhelming majority of Americans don’t understand basic health care concepts. In a Carnegie Mellon research survey, only 14% of consumers adequately understood four of the most common terms in health care: copays, co-insurance, deductible and out-of-pocket maximum, “yet those are the very dimensions that people […]

By Kathleen Koster
Employee Benefits News
March 20, 2014

The overwhelming majority of Americans don’t understand basic health care concepts. In a Carnegie Mellon research survey, only 14% of consumers adequately understood four of the most common terms in health care: copays, co-insurance, deductible and out-of-pocket maximum, “yet those are the very dimensions that people are making very important, financially meaningful benefits decisions [about], says Doug Ghertner, CEO of Change Healthcare.

As employers shift toward high-deductible health plan designs, they need to explain these benefits clearly so employees now holding the purse strings can become savvy health care consumers. In this day in age, technology allows employers to personalize benefits communication and reach an even wider swathe of their population.

“Tech is an enabler, it allows us to scale messaging,” says Arielle Bogorad, director of worldwide benefits and wellness at Cerner. The health care information technology company uses innovative technology outreach – personalized in ways not previously available — with its 9,000 employees based in Kansas City.

Cerner primarily uses engagement alerts that target relevant groups for colonoscopies, mammograms, and other common and recurring services. It also uses the system to try to improve medication adherence in a population, and support preventive or wellness initiatives. These “Ways to Save” alerts concretely show employees how they can save money on health care based on their care usage and the benefit plan’s offerings. The messages also can show participants the top five providers in their area and what price range they offer for services.

“We believe that you create a consumer by educating them about variability and cost and the fact that they can do something about it on the common and recurring things,” says Ghertner of the Change Healthcare program it implemented for Cerner. “Cost is very tangible,” he adds, and provides a good opportunity to engage employees.

So far, 80% of Cerner associates have received a “Ways to Save” alert, and of those, 66% of the push notifications were acted on, allowing employees to save money on a prescription drug or dental service, for example. On average, the company has saved $516 per purchaser per year.

Further, participants are four times more likely to shop around for health care when they read these alerts, according to Change Healthcare, meaning they are more likely than those who didn’t receive alerts to proactively research prices and service details for bigger ticket items through the vendor’s tool at a later date.

Real-time feedback

Because the tailored messaging gives participants personalized information, the alerts highlight meaningful savings that are relevant for that individual. Through the alerts, Cerner improved first-time utilization at its onsite pharmacy by 31%, and 22% of onsite clinic users took advantage of the benefit for the first time.

“The tech helps to personalize [the message] and give people a platform to interact with their health and wellness, which wasn’t possible before,” says Bogorad.

Employees can give real-time feedback on the program and other benefits through the company’s social page, which “allows us to continually make changes and augment the program to better serve the needs of our associates,” says Bogorad.

Being a health care technology company, Cerner constantly thinks “about how to leverage tech to personalize your journey and help you become a health care consumer. That may differentiate us from other employers in the benefits space because it aligns with our DNA as a company,” Bogorad says. “We think of ourselves as a living lab, so we’re given the latitude to test new technologies and ideas. Our philosophy is ‘if you’re going to fail, fail fast,’ so we’re a very a dynamic environment.”

Health care is personal

Cerner even built new state-of-the-art fitness centers with the most technologically advanced gym equipment on the market at two of its locations. A fitness coach creates a personalized workout for the employee and inputs the routine on a key. The individual simply inserts the key into the equipment and their tailored gym training guides them through each workout. Coaches can track the member’s workout and send alerts if they haven’t been to the gym recently or aren’t moving as fast as the last session.

“We believe that health care is personal, but it can sometimes take a lot of manpower to make it personal, so we leverage tech to help make it personal,” says Bogorad.

Ghertner believes companies will embrace more personalization through technology in the future.

“I think there will continue to be this trend towards consumerism, and not just on the financial dimension, but in how we determine the key decision points that matter to the individual and how we craft a user experience that allows someone to tailor their purchase to those specific attributes,” he says.

And as consumers continue to make more educated benefits and health decisions, technology will only play a larger role in employers’ outreach campaigns, enabling them to reach more people and tailor the information to each individual’s needs and lifestyle.

Brentwood-based Change Healthcare Tracks Costs of Medical Procedures

Posted Fri, February 14, 2014

By Shelley DuBois The Tennessean February 12, 2014 Change Healthcare is a Brentwood-based company that works with a variety of partners to keep costs down for employer-sponsored health plans. As part of that, the company tracks the cost of various medical procedures. The company, which has access to about 5 million covered patients across the […]

By Shelley DuBois
The Tennessean
February 12, 2014

Change Healthcare is a Brentwood-based company that works with a variety of partners to keep costs down for employer-sponsored health plans. As part of that, the company tracks the cost of various medical procedures. The company, which has access to about 5 million covered patients across the country, uses in-network claims to create the Healthcare Transparency Index — a measure of price variability for different procedures.

This report uses data from the third quarter of 2013 to identify certain procedures that had a huge variability in cost. Here are some of the findings:

 

MRI Scans

• Overall, these scans ranged 458 percent, from $485 to $2,708.

• Brain MRIs ranged 609 percent, from $515 to $3,652.

• Spine MRIs ranged 410 percent, from $465 to $2,374

• Lower extremity MRIs ranged 359 percent, from $488 to $2,237.

• Upper extremity MRIs ranged 416 percent, from $468 to $2,415.

CT Scans

• Overall, the cost of CT scans varied 794 percent, from $300 to $2,681.

• Chest CT scans ranged 489 percent, from $325 to $1,913.

• Face/jaw CT scans ranged 464 percent, from $255 to $1,437.

• Head/brain CT scans ranged 476 percent, from $320 to $1,844

• Pelvis/abdomen CT scans ranged 988 percent, from $300 to $3,265.

Ultrasounds

• Overall, the cost of an ultrasound ranged 472 percent, from $100 to $572.

• Abdominal ultrasounds ranged 714 percent, from $111 to $905.

• Breast ultrasounds ranged 434 percent, from $87 to $466.

• Transvaginal ultrasounds ranged 369 percent, from $103 to $481.

C-Section Delivery

• This procedure ranged 284 percent, from $6,128 to $23,526.

http://www.tennessean.com/apps/pbcs.dll/article?AID=2014302120133

 

 

Analysis: High Costs, Price Variability Mean Imaging Should Be a Healthcare Savings Target

Posted Sat, February 08, 2014

By Mike Bassett for Fierce Medical Imaging February 8, 2014 Medical imaging procedures figure prominently in a list of the high-cost, high-frequency and highly variable medical services that present the greatest opportunities to achieve healthcare savings, according to an analysis from Change Healthcare’s quarterly Healthcare Transparency Index. The index tracks cost variability of common healthcare services across […]

By Mike Bassett for Fierce Medical Imaging
February 8, 2014

Medical imaging procedures figure prominently in a list of the high-cost, high-frequency and highly variable medical services that present the greatest opportunities to achieve healthcare savings, according to an analysis from Change Healthcare’s quarterly Healthcare Transparency Index.

The index tracks cost variability of common healthcare services across various prescription, medical, dental and vision services. Among these services, Change Healthcare identified eight “target” categories with the greatest opportunities for cost savings. Those eight included five related to medical imaging: CT scans; MRI; colonoscopies and upper GI endoscopies; mammograms; and ultrasound.

According to the analysis, CT scans have the greatest variability in price at 794 percent, with costs ranging from $300 to more than $2,600. Ultrasound ranks next at 472 percent ($100 to $572), followed by MRI at 458 percent ($485 to $2,708), mammograms at 242 percent ($118 to $402), and colonoscopies and upper GI endoscopies ($1,290 to $4,035).

Price variations can be even greater depending on the type of modality and area of the body being imaged. For example, CT scans of the pelvis/abdomen varied in price by 988 percent, and abdominal ultrasounds by 611 percent.

“Our data show costs for common procedures can vary significantly, even in the same zip code,” Doug Ghertner, president and CEO of the Brentwood, Tenn.-based company that provides pricing information to health payers and employers. “Care setting may contribute to costs differences, but often there’s little explanation for why common treatments may cost two, three or four times more at one provider versus another.”

Ron Vianu, CEO of a company that provides data on imaging to employers and worker’s compensation insurance carriers, told in Bloomberg Businessweek, however, that price is not a good determinant of quality care when it comes to medicine, “and particularly radiology.”

Vianu added that since insurers negotiate different rates with different providers, two equivalent imaging centers could have vastly different costs. Hospital prices could be even harder to judge, he said, because they bargain on a wider variety of services.

http://www.fiercemedicalimaging.com/story/analysis-high-costs-price-variability-mean-imaging-should-be-healthcare-sav/2014-02-08#ixzz2tskRSIpc

Health Care Cost Disparities Highlighted in Change Healthcare Report

Posted Wed, February 05, 2014

By John Tozzi BusinessWeek February 05, 2014 What’s the right price for an abdominal CT scan? The cost can vary by an order of magnitude, from as low as $300 to as much as $3,265, according to a report today from Change Healthcare, a company that provides pricing information to health insurers and employers. CT scans aren’t an unusual […]

By John Tozzi
BusinessWeek
February 05, 2014

What’s the right price for an abdominal CT scan? The cost can vary by an order of magnitude, from as low as $300 to as much as $3,265, according to a report today from Change Healthcare, a company that provides pricing information to health insurers and employers.

CT scans aren’t an unusual in this respect: Diagnostic imaging tests make up four of the eight procedures on Change Healthcare’s list of medical care with wide variations in price. The most expensive MRIs, mammograms, and ultrasounds are often three to five times the cost of the least expensive, according to the company’s data. The report is based on in-network claims from Change Healthcare’s health-plan clients, which cover more than 5 million people in the U.S.

Medical imaging has been a booming industry and a potentially lucrative service for clinics and hospitals to offer. That growth has raised concerns that the scans, especially those that involve radiation that raises the risk of cancer, are overused.

Where the tests are done influences how much they cost. “Only 19 percent of all imaging work done by radiologists is done in private offices,” the report says. Most of the 95 million scans done each year happens in hospitals, according to Change Healthcare, which are the most expensive setting.

Patients choosing between a CT scan that costs $300 and one that costs $3,000 might be inclined to get the cheaper test, especially if they’re paying out of pocket on high-deductible plans, all else being equal. But if more some scans deliver better results—more precise images that could show a small tumor, for example—they might be inclined to pay more.

A higher price isn’t necessarily a good indicator of a better test, says Ron Vianu, chief executive of Spreemo. The New Jersey-based company provides data on imaging to employers and workers’ compensation insurance carriers, which pay for radiology tests for workplace injuries. ”I would not say price is a good determinant of quality in any area of medicine, particularly in radiology,” Vianu says.

Insurers negotiate different rates with each provider, so two equivalent imaging centers could have vastly different charges. Hospital prices are even harder to judge because hospitals bargain with insurers over a wide variety of services. “They may give a discount in cardiology but as a result they may increase the price in radiology,” Vianu says.

And quality can vary widely, too. Newer, more expensive MRI machines deliver more detailed images, the same way today’s digital cameras have higher resolution than models from 1999. Better radiologists can read scans more accurately. The stakes for getting the right scan are high; mistakes during diagnosis, when doctors are still trying to figure out what’s wrong, can lead to performing an unnecessary procedure, or delaying a needed one.

The bad news for patients: There’s no good way to find the best MRI, CT scan, or mammogram at the lowest cost. Spreemo is working on ratings for imaging facilities that take into account what technology they use and the skill of the radiologists. Patients can try to investigate the technology or doctors’ credentials themselves, but most wouldn’t know where to start. ”Today, unfortunately,” Vianu says, “there’s absolutely nothing [patients] can do to help distinguish.”

http://www.businessweek.com/articles/2014-02-05/americas-mixed-up-markets-for-medical-imaging

Shop Around: Eight Health Procedures with the Biggest Variations in Price

Posted Wed, February 05, 2014

By Eleanor Kennedy Nashville Business Journal Brentwood-based Change Healthcare’s latest Healthcare Transparency Index aims to give patients and plan sponsors price variability information they can use to find opportunities for savings. According to the report, an increasing number of consumers are enrolled in consumer-driven plans and plans with high-deductibles — a situation that will only […]

By Eleanor Kennedy
Nashville Business Journal

Brentwood-based Change Healthcare’s latest Healthcare Transparency Index aims to give patients and plan sponsors price variability information they can use to find opportunities for savings.

According to the report, an increasing number of consumers are enrolled in consumer-driven plans and plans with high-deductibles — a situation that will only reduce overall health care costs if consumers can make informed decisions based on transparent pricing. To that end, the company used an aggregation of in-network medical claims to highlight services with the most price variability, opening up the biggest opportunity for cost savings.

CT Scans lead the pack, according to the report, varying in price by close to 800 percent and more than $,2000.

“Our data show costs for common procedures can vary significantly, even in the same ZIP code,” Doug Ghertner, president and CEO of Change Healthcare, said in a news release. “Care setting may contribute to costs differences, but often there’s little explanation for why common treatments may cost two, three or four times more at one provider versus another.”

Ghertner said the index can be useful to both plan sponsors and participants, as they seek out the least expensive offerings to maximize savings.

The following is a breakdown of the top eight most variable procedures; you can download the full report here.

CT Scans

  • Price range: $300-$2,681
  • Price variability: 794 percent

MRIs

  • Price range: $485-$2,708
  • Price variability: 458 percent

Colonscopies and upper GI endoscopies

  • Price range: $1,290-$4,035
  • Price variability: 213 percent

Mammograms

  • Price range: $118-$402
  • Price variability: 242 percent

Colonscopies and upper GI endoscopies

  • Price range: $1,290-$4,035
  • Price variability: 213 percent

Mammograms

  • Price range: $118-$402
  • Price variability: 242 percent

Ultrasounds

  • Price range: $100-$572
  • Price variability: 472 percent

C-section deliveries

  • Price range: $6,128-$23,526
  • Price variability: 284 percent

Office visits with lipid screening

  • Price range: $179-$506
  • Price variability: 182 percent

Office visits with diabetes screening

  • Price range: $118-470
  • Price variability: 298 percent

http://www.bizjournals.com/nashville/blog/2014/02/change-healthcare-study-measures-care.html?page=2

Health Care Cost Disparities Highlighted in Change Healthcare Report

Posted Wed, February 05, 2014

By Michael Giardina Employee Benefit News February 5, 2014 Health care plan sponsors planning to get in the front of costly services this year may want to consider increasing employee communication, particularly if they have high deductible health plans. New data from Change Healthcare shows wide price variability among some common medical procedures. The company’s […]

By Michael Giardina
Employee Benefit News
February 5, 2014

Health care plan sponsors planning to get in the front of costly services this year may want to consider increasing employee communication, particularly if they have high deductible health plans. New data from Change Healthcare shows wide price variability among some common medical procedures.

The company’s Healthcare Transparency Index finds that “target” areas such as CT scans, MRIs, diabetes screening, mammograms and C-section deliveries have variable costs that range from 182% to 794% higher than the lowest cost procedure.

At the top of the variable price list, CT scans varied from $300 to $2,681, ultrasounds ranged from $100 to $572 and diabetes screenings ranged from $118 to $407.

However, these figures pale in comparison to the cost of C-section deliveries, which ranged from a high of $23,526 to a low of $6,128, according to the analysis.

Clayton Nicholas, vice president of strategy with Change Healthcare, a provider of health care cost transparency tools for employers, health plans and consumers, says the index’s new findings will help to open the conversation among the 40 million employees currently enrolled in high deductible plans. The HCTI tracks cost variability among common health care services by analyzing prescription, medical, dental and vision services on a quarterly basis.

“We want to identify target opportunities where a plan sponsor can look at their populations and kind of get a sense of the prevalence of different healthcare services in their population,” Nicholas says, while adding that this information can help “identify target opportunities to create either campaigns or targeted messaging around – to help direct people to the appropriate point of care for certain services or let them know there are opportunities to save.”

The company analyzed more than 167 million claims during the 2013’s third quarter for this current index update.

“Care setting may contribute to costs differences, but often there’s little explanation for why common treatments may cost two, three or four times more at one provider versus another,” says Change Healthcare president and CEO Doug Ghertner.

Some reasons for this disparity include the myriad places employees can obtain care.

“I think for certain services, prices have continued to have higher variances because you have different points of care where they can be done now,” Nicholas says. Imaging, for example, can be “done in a retail clinic, a workplace health center or outpatient care.”

One Tricky Thing About Transparency in Healthcare Is the Piecemeal Process

Posted Thu, January 30, 2014

In Deloitte’s weekly healthcare industry insights this week, Dr. Harry Greenspun, a senior adviser at Deloitte Center for Health Solutions, poses an important, lingering question about transparency: What are the implications of only having some transparency in healthcare? Companies like … Change Healthcare … have been winning over investors with their solutions for putting more information in the hands of consumers. Government, too, is […]

In Deloitte’s weekly healthcare industry insights this week, Dr. Harry Greenspun, a senior adviser at Deloitte Center for Health Solutions, poses an important, lingering question about transparency: What are the implications of only having some transparency in healthcare?

Companies like … Change Healthcare … have been winning over investors with their solutions for putting more information in the hands of consumers. Government, too, is making an unprecedented push to promote transparency in healthcare.

http://medcitynews.com/2014/01/tricky-thing-transparency-healthcare/#ixzz2ruaoSHf7

Employees Unequipped to Seek Lower Health Costs

Posted Mon, January 13, 2014

By Stephen Miller, CEBS Society for Human Resource Management January 13, 2014 When it comes to health care costs, four out of five U.S. consumers indicate they would be comfortable approaching their doctor about the cost of services in order to find competitive pricing. Despite this, fewer than half of consumers have actually asked about […]

By Stephen Miller, CEBS
Society for Human Resource Management
January 13, 2014

When it comes to health care costs, four out of five U.S. consumers indicate they would be comfortable approaching their doctor about the cost of services in order to find competitive pricing. Despite this, fewer than half of consumers have actually asked about the price of care, according to the latest Survey of Consumer Health Care Opinions by the Altarum Institute.

http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/Employees-Lower-Health-Costs.aspx

Nashville Luring New Wave of Enterprising Health Care Execs

Posted Sun, November 17, 2013

By Shelley DuBois The Tennessean November 17, 2013 Combine Nashville’s history as a health care town, a relatively affordable cost of living and its growing reputation as a cool place to be, and the conditions are ripe for a new wave of enterprising health care executives. They’ve spent time on the coasts, East or West, and have […]

By Shelley DuBois
The Tennessean
November 17, 2013

Combine Nashville’s history as a health care town, a relatively affordable cost of living and its growing reputation as a cool place to be, and the conditions are ripe for a new wave of enterprising health care executives.

They’ve spent time on the coasts, East or West, and have come to Nashville to try something bold. They have big plans — they don’t want to just participate in the health care industry, they want to reshape it.

www.tennessean.com | Printer-friendly article page

‘Guardian of the Culture’: Change Healthcare Founder and Former CEO Maintains His Passion for — and Influence With — the Company in a Redefined Role

Posted Sun, November 10, 2013

By Linda Bryant Nashville Post It’s a typical scenario for a startup. A brilliant entrepreneur launches a company based on a promising product or service, grows that company to a certain point and then, within the first three or four years, is replaced or leaves the company by choice. It happened to Martin Eberhard at […]

By Linda Bryant
Nashville Post

It’s a typical scenario for a startup. A brilliant entrepreneur launches a company based on a promising product or service, grows that company to a certain point and then, within the first three or four years, is replaced or leaves the company by choice. It happened to Martin Eberhard at Tesla, Andrew Mason at Groupon and Jack Dorsey at Twitter.

Christopher Parks avoided the scenario at Change Healthcare. But he might not have if he hadn’t decided to seriously reconsider his role as the company’s chief executive officer.

In early 2011, Parks stepped down from the CEO desk to make way for Howard McLure, a former CVS Caremark executive who came out of retirement to take the job. Two months later, the company hired another CVS Caremark executive, Doug Ghertner, as president. Ghertner transitioned to CEO in mid-2012 and McLure is now executive chairman of the board.

“I spent the first three years figuring out many of the basics, building a 20- to 25- person team and we’d gotten A Round and B Round funding,” says Parks, who

now serves as Change Healthcare chief development officer. “But other things were coming into play. We needed to start thinking beyond next year.”
Parks saw the writing on the wall. He knew the company was going to soon require a new level of professional management if it were going to continue to grow. In addition, he was pretty sure he didn’t want to leave a company he lived and breathed for. But could he avoid the fate of so many serial entrepreneur-founders who exit their companies only to move on to the next start-up, and to the next one after that?

“I began to truly understand that an organization is not the founder,” Parks says. “I think it’s normal and organic for that to happen. At the same time, I felt an enormous amount of accountability to our investors. I didn’t want to have to look away from them if we didn’t succeed. I’d also made a promise to my mom that I wanted to keep.”

Parks started Change Healthcare in 2007 after both his parents died of cancer. Before his mom succumbed to the disease in 2006, she was overwhelmed with stacks of hard-to-understand medical bills. Parks promised her he would do something to make it easier for people to figure out if the charges on their medical bills were correct and fair.

The passion behind Parks’ promise to his mother is what drove the company’s core product, a cost-transparency software tool that helps employees with health plans find critical information that can help them make cost-effective decisions about their health care.

That same passion helped Parks do something rather remarkable. Along with Vic Gatto, a partner inthe Nashville-based venture capital firm Solidus (a major investor in Change Healthcare), Parks participated in the search for new C-suite leaders who could replace him.

“Once you get to a Series C round of funding, most investors start to think about bringing in new management,” Parks says. “They want their person to come in so they can take things to the next level. I thought of Change Healthcare as much bigger than one person. If I was truly going to be a servant-leader, I had to figure out a way to check my ego at the door and help in the transition to a new team.”

Parks says he wanted the company’s new top brass to have to pass benchmarks of professional criteria and experience, but he was even more concerned about the personalities involved. If he felt like a candidate couldn’t get behind Change Healthcare’s mission of transparency and cost-effectiveness for customers, he didn’t want that person.

“To me, Change Healthcare is much more than a business. It’s a legacy,” Parks says. “I wanted to find the talent that had the track record to move us forward. But I wanted to know if they really cared. Personality, mentality and emotional investment were more important to me than experience.”

Parks remains a significant shareholder at Change Healthcare as its founder and chief development officer. He likes to call himself “guardian of the culture” at the company. To his credit, Parks admits he may not have been able to stay on at Change Healthcare if it hadn’t been for his relationship with Gatto, who has a very hands-on approach with Solidus-funded companies. Gatto counseled Parks from Day 1 of the company and told him early on that Solidus (DisclosureSolidusis an investor in SouthComm, the parent of the Post.)was throwing its support behind the company’s mission and vision, not behind Parks or any other specific individual.

“Change in a company can be gut-wrenching,” Gatto says. “But it can’t be all holding hands and singing Kumbaya. One of the hardest things about building a startup is navigating a leadership transition, which is usually inevitable.

“Christopher needed to decide if he wanted to stay as the company’s CEO, which would mean working through other people to achieve goals, or to take on a role that would keep him close to customers and products like he’d been doing all along,” Gatto adds. ”It was my role to get him to decide. I didn’t want to see him rolling around in the middle; I wanted him to intentionally choose the role he was going to play.”

Parks decided to stay as close to the entrepreneurial edge of the company as he could in a role that has him overseeing and launching new product development.

“I do think he could have continued as CEO and gotten more and more into the operations and management, but he would have had to change his spots,” Gatto says. “That’s not an easy thing to do. Even when the company had 20 employees, he’d say to me, ‘All I do is sit in HR meetings.’ He’s really ideally suited for being close to the customers and finding out what they need.”

Despite the fact that Parks was a full participant in bringing in new management to the company, Gatto describes a six-month realignment period in 2011-12 as “a hard transition.”

“It certainly wasn’t always easy,” he says. “There were some bumps in the road and some people lost their jobs. But Christopher made the transition work.”

McLure felt from the get-go that the morale and commitment among employees would suffer unless Park’s personality, vision and distinctive skill set remained part of the company.

“He had really been the face of the company, and he really built a solid culture,” McLure says. “He has a huge amount of institutional knowledge. We needed some management in order to succeed on a much larger scale, but we wanted to keep Christopher’s passion and productivity.

“Keeping that passion in the company is key,” he adds. “It creates a better company and a culture that creates people who really believe in the mission.”

Ghertner agrees.

“I really think most of the credit for the successful transition goes to Christopher,” Ghertner says. “He built a company that has an environment of empowerment and creativity, a place where relationships matter. We want to make sure we don’t stray too far from that core.”

During the past two years, Change Healthcare has transitioned from impacting thousands of insurance consumers to impacting millions. Since the executive transition from Parks to McClure and Ghertner, the employee roster has grown from 20 to 70-plus staffers.

In August, Change Healthcare completed a $15 million Series D funding round led by HLM Venture Partners and Noro-Moseley Partners. Existing institutional investors BlueCross BlueShield Venture Partners, Sandbox Industries, Mitsui & Co. Global Investment, Inc., West Health Investment Fund LLC and the aforementioned Solidus also participated in the round. Since its inception, the company has raised $32 million.

Parks says he is particularly proud of the breadth of the recent Series D round.

“It’s significant that it brought in some West Coast investment,” he says. “It shows we are not stuck in a bubble. Not many companies started in Nashville have investment from the Southeast and the East and West coasts. I think it speaks well for our traction and where we are going.”

Despite the progress Change Healthcare has made and the success Parks has enjoyed reinventing himself and his role with the company, the questions remains: Does he miss sitting behind the CEO’s desk?

“Not much,” Parks responds. “Being CEO sounds glamorous but it can be a big emotional weight. That has been lifted from me; I get to share the weight with everyone.”

http://nashvillepost.com/news/2013/11/10/guardian_of_the_culture

Open Enrollment Season is Coming: Here’s How to be Prepared

Posted Fri, September 20, 2013

By Barbara Mannino Fox Business September 20, 2014 Historically, open enrollment season has been a complicated process for consumers trying to navigate the health insurance world, but this season the roadmap in picking the right plan is going to be a lot more circuitous. This year’s enrollment season will include an expanded health insurance marketplace […]

By Barbara Mannino
Fox Business
September 20, 2014

Historically, open enrollment season has been a complicated process for consumers trying to navigate the health insurance world, but this season the roadmap in picking the right plan is going to be a lot more circuitous.

This year’s enrollment season will include an expanded health insurance marketplace as part of the president’s Affordable Care Act that includes federal and state health insurance exchanges. While more options can make the price point more competitive, it can also make the finding the right plan daunting.

http://www.foxbusiness.com/personal-finance/2013/09/20/open-enrollment-season-is-coming-heres-how-to-be-prepared/#ixzz2fSkZySLO

 

What You’ll Really Pay for Health Care

Posted Wed, September 18, 2013

By Elizabeth O’Brien The Wall Street Journal: MarketWatch September 18, 2013 Imagine if your auto insurance worked the way your health insurance does. For years, you probably would have paid a fixed monthly premium plus, say, $20 every time you took your car to the body shop, regardless of whether you got an oil change […]

By Elizabeth O’Brien
The Wall Street Journal: MarketWatch
September 18, 2013

Imagine if your auto insurance worked the way your health insurance does. For years, you probably would have paid a fixed monthly premium plus, say, $20 every time you took your car to the body shop, regardless of whether you got an oil change or your entire engine replaced.

Now, your plan has switched, and in addition to premium payments you’re responsible for the first few thousand dollars of bodywork each year. And here’s an extra wrinkle: The mechanic won’t tell you how much you owe until after your car has been serviced.

http://www.marketwatch.com/story/what-youll-really-pay-for-health-care-2013-09-12

Healthcare Shopping Data Reveals Unique Factors that Drive Consumer Decisions and Opportunities for Savings

Posted Sun, September 01, 2013

By Doug Ghertner Healthcare Consumerism Solutions September 2013 As the cost of basic healthcare services continues to rise and place an increased burden on individuals and families across the country, consumers need to take a more active role in their healthcare decisions – especially when it comes to choosing “shopable” healthcare services.i The strain of […]

By Doug Ghertner
Healthcare Consumerism Solutions
September 2013

As the cost of basic healthcare services continues to rise and place an increased burden on individuals and families across the country, consumers need to take a more active role in their healthcare decisions – especially when it comes to choosing “shopable” healthcare services.i

The strain of healthcare costs is a growing concern, given the average annual premium for a family is now $16,351, according to the Kaiser Family Foundation. That’s up 4 percent from last year.

2013.SepOct_Healthcare_Consumerism_Solutions_Ghertner

Modern Healthcare’s 2013 Best Places to Work in Healthcare (Alphabetical List)

Posted Wed, August 14, 2013

Modern Healthcare August 14, 2013 When it comes to exceptional quality and service, it’s an organization’s staff that makes the difference — especially true in healthcare. And top talent always gravitates toward the best places to work. Modern Healthcare is proud to present the 100 companies and organizations that have been named to its Best […]

Modern Healthcare
August 14, 2013

When it comes to exceptional quality and service, it’s an organization’s staff that makes the difference — especially true in healthcare. And top talent always gravitates toward the best places to work. Modern Healthcare is proud to present the 100 companies and organizations that have been named to its Best Places to Work for 2013.

http://www.modernhealthcare.com/article/20130814/INFO/308149999/modern-healthcares-2013-best-places-to-work-in-healthcare?utm_source=frontpage&utm_medium=newsitem309&utm_campaign=carousel-traffic

Change Healthcare Nabs $15M to Promote Health Care Cost Transparency

Posted Tue, August 13, 2013

By Christina Farr Venture Beat August 13, 2013 Millions more people will gain access to health care next year, as the Affordable Care Act comes into effect. With change comes opportunity — and confusion. So investors are placing their bets on health transparency startups like Change Healthcare, which help people save money and select the best insurance plan. […]

By Christina Farr
Venture Beat
August 13, 2013

Millions more people will gain access to health care next year, as the Affordable Care Act comes into effect.

With change comes opportunity — and confusion. So investors are placing their bets on health transparency startups like Change Healthcare, which help people save money and select the best insurance plan.

Today, Change secured $15 million in financing from strategic investors, including the venture arm of BlueCross Blue Shield.

http://venturebeat.com/2013/08/13/change-healthcare-nabs-15m-to-promote-health-care-cost-transparency/

HHS Starts Features to Help Consumers Learn Insurance

Posted Mon, August 05, 2013

By Kelly Kennedy USA Today August 5, 2013 WASHINGTON — The government launched a new webpage, training videos and infographics Monday to help Americans better understand the health insurance exchanges that will launch Oct. 1. “Everywhere I go, I meet people who are excited about the marketplaces and hungry for information,” Health and Human Services […]

By Kelly Kennedy
USA Today
August 5, 2013

WASHINGTON — The government launched a new webpage, training videos and infographics Monday to help Americans better understand the health insurance exchanges that will launch Oct. 1.

“Everywhere I go, I meet people who are excited about the marketplaces and hungry for information,” Health and Human Services Secretary Kathleen Sebelius said Monday.

About 7 million Americans are estimated to start buying health insurance as part of the new law, but a new survey shows they don’t understand the basics of how health insurance works or is provided.

http://www.usatoday.com/story/news/politics/2013/08/05/survey-americans-dont-understand-insurance/2619007/

Five minutes with Change Healthcare CEO Doug Ghertner

Posted Wed, June 26, 2013

By E.J. Boyer Nashville Business Journal June 26, 2013 I checked in recently with Brentwood-based Change Healthcare to learn more about Healthcare University, a new offering the company unrolled in February that uses a series of interactive quizzes, videos and games to help consumers make better decisions when it comes to health care. Chief Executive […]

By E.J. Boyer
Nashville Business Journal
June 26, 2013

I checked in recently with Brentwood-based Change Healthcare to learn more about Healthcare University, a new offering the company unrolled in February that uses a series of interactive quizzes, videos and games to help consumers make better decisions when it comes to health care.

Chief Executive Officer Doug Ghertner has high hopes for the product as Change Healthcare looks to grow its numbers of clients and users.

http://www.bizjournals.com/nashville/blog/2013/06/five-minutes-with-change-healthcare.html

New Data Show Price Differences for Health Procedures

Posted Wed, May 08, 2013

By Kelly Kennedy USA Today May 8, 2013 WASHINGTON — Hospitals will now be required to tell patients how much they charge for procedures, a move federal officials said Wednesday should spark competition and lower costs. The federal Centers for Medicare and Medicaid Services released data Wednesday showing the differences in costs for 100 medical […]

By Kelly Kennedy
USA Today
May 8, 2013

WASHINGTON — Hospitals will now be required to tell patients how much they charge for procedures, a move federal officials said Wednesday should spark competition and lower costs.

The federal Centers for Medicare and Medicaid Services released data Wednesday showing the differences in costs for 100 medical procedures, from surgery to poisoning treatment. The data show a wide disparity in costs, even for hospitals located near each other.

http://www.usatoday.com/story/news/nation/2013/05/08/hospital-transparency-report-shows-difference-in-health-costs/2144133/

Clayton Nicholas, Change Healthcare, On Improving Consumer Engagement

Posted Wed, April 10, 2013

By Doug Field IHC Radio April 10, 2013 http://www.youtube.com/watch?v=qM4QL3VO2Ao

By Doug Field
IHC Radio
April 10, 2013

http://www.youtube.com/watch?v=qM4QL3VO2Ao

Nashville Post’s 2013 “In Charge”

Posted Fri, March 22, 2013

Nashville Post March 22, 2013 Each year, In Charge presents the women and men who have positively exerted their influence on Nashville and its surrounding communities. Our list is neither a popularity contest nor a typical “who’s who” listing. As has been our standard since we launched this concept in 2010, we looked not only […]

Nashville Post
March 22, 2013

Each year, In Charge presents the women and men who have positively exerted their influence on Nashville and its surrounding communities. Our list is neither a popularity contest nor a typical “who’s who” listing. As has been our standard since we launched this concept in 2010, we looked not only to those people’s local (and sometimes national) prominence but also to their ability — and connections — to create opportunities for others and for the city.

http://nashvillepost.com/2013incharge

 

How to be a Smart Shopper when Picking a Health Plan

Posted Fri, March 15, 2013

By Barbara Mannino Fox Business March 15, 2013 Employers have been picking up the lion’s share of the employee health benefit tab for years, but they are desperate to find a less revenue-draining way to offer coverage in the face of soaring health costs. Reducing benefits and lowering pay are impractical choices because of their […]

By Barbara Mannino
Fox Business
March 15, 2013

Employers have been picking up the lion’s share of the employee health benefit tab for years, but they are desperate to find a less revenue-draining way to offer coverage in the face of soaring health costs.

Reducing benefits and lowering pay are impractical choices because of their inevitable negative impact on recruitment and retention, pushing consumer-directed health plans (CDHP) to center stage.

The low premium, high deductible (typically $1,000 or more) CDHPs combine with a tax-exempt health reimbursement arrangement or a health savings account that helps enrollees pay for out-of-pocket expenses—meaning both employers and employees save.

Experts say giving employees skin in the game will make them more motivated to be smart shoppers and be more active and responsible in their health-care decisions.

http://www.foxbusiness.com/personal-finance/2013/03/15/how-to-be-smart-shopper-when-picking-health-plan/

 

The New Era of Healthcare Benefits: Engaging Employees to Become Better Healthcare Consumers

Posted Fri, March 01, 2013

By Doug Ghertner For Employee Benefit Plan Review March 2013 Even as we await significant elements of the Affordable Care Act (ACA) that will be implemented in 2014, the healthcare industry is evolving in a way that will impact how all consumers think about their healthcare. As employers grapple with rising healthcare costs, many are […]

By Doug Ghertner
For Employee Benefit Plan Review
March 2013

Even as we await significant elements of the Affordable Care Act (ACA) that will be implemented in 2014, the healthcare industry is evolving in a way that will impact how all consumers think about their healthcare.

As employers grapple with rising healthcare costs, many are turning to high-deductible and consumer-directed health plans (CDHPs), which place more responsibility on the shoulders of their employees. In fact, in recent years, CDHPs have seen significant growth, while enrollment in other plan types has remained flat or fallen.

The American Association of Preferred Provider Organizations (AAPPO) estimates that 33 million people were enrolled in CDHPs in 2011, up from 28 million in 2010, an increase of 18%.[1]

Meanwhile, states are implementing public health insurance exchanges and private exchanges are expanding – bringing a new era of individually driven healthcare choices. An estimated 27 million people are projected to participate in public exchanges by 2016, and more than half of employers expect to move to defined-contribution plans and private exchanges during this same time.[2]

It’s a new age in healthcare: the consumer age.

Greater consumer involvement in healthcare presents significant opportunities to drive down healthcare costs. According to cost transparency and consumer engagement company Change Healthcare, costs of common treatments and tests can vary widely among different providers, even within the same zip code.[3]

 

Cost Range for Services Low High Price Variance
Computed Tomography (CT/CAT) scan – Chest $347 $1,832 527%
Magnetic Resonance Imaging (MRI) – Arm $439 $2,466 501%
Office Visit – Family Practitioner $105 $292 278%
Physical Therapy (PT) Evaluation $50 $233 466%
Prescription Simvastatin $192 $259 134%

This chart illustrates tremendous opportunities to save, but often, consumers are either unaware that such great disparities in cost exist, or they are ill equipped to identify savings opportunities. To navigate the new health benefits landscape, consumers must have simple, personalized tools to help them understand healthcare costs, identify high quality providers of care, and take advantage of savings opportunities. And then they must be engaged to use these tools on an ongoing basis.

According to a National Business Group on Health survey, employers report lack of engagement as the top barrier to healthcare-related behavior change.[4] A survey of human resources professionals by the Society for Human Resource Management found 77 percent of respondents said it was challenging to engage employees in getting the best value from their plan and to encourage them to focus on their health and wellness.[5]

To realize the significant opportunity to reduce healthcare costs through greater cost transparency, consumers must be engaged in their care now more than ever.

Keys to Engagement: Helping Employees Seek Out the Best Value

Engagement is more than just signing up for a service offered by an employer or health plan. To truly save on healthcare costs, consumers must understand and regularly seek out savings opportunities. True engagement requires three key elements:

1.     Greater Benefits Education: Benefits are complex and, with the rise of public and private insurance exchanges and high-deductible plans, consumers may no longer be able to rely solely on their company’s human resources professionals to help them understand and get the most out of their health benefits. As more consumers are forced to shop for their own care, they will need greater knowledge about their benefits, healthcare consumerism and legislation that impacts their care.

Today, fewer than 20 percent of employees understand their health benefits, according to a survey by benefits company Unum.[6] Best practices reveal that, to help combat this, benefits education should start early and continue throughout the year. By presenting the information in a fun and visual way, and in multiple formats, employees will better understand, apply and retain the information.

2.     Personalized and Relevant Cost Information: Average cost information for a particular region isn’t enough to help consumers become actively involved in shopping for their care. Consumers need to know what their provider charges and what their out-of-pocket costs will be based on their own health plan’s co-pay levels, co-insurance and other factors. To truly help consumers save on care, they need the ability to compare providers side-by-side, and savings must be personalized across the healthcare spectrum – prescription, medical and dental services. Quality ratings should also go hand-in-hand with cost information, so consumers can seek out care based on the best value – identifying the highest quality providers and not just the lowest cost option. Finally, the information needs to be easy to understand and simple to find. Without relevant and personalized information, consumers are less inclined to act on a savings opportunity.

3.     Proactive Savings Opportunities Delivered on an Ongoing Basis: Saving on healthcare isn’t a one-time opportunity. Proactively alerting consumers to savings opportunities on an ongoing basis, based on services they are already using, is key to helping them stay engaged in their care all year long.

Change Healthcare’s Ways to Save AlertsTM provide proactive savings notifications via email or text message on services consumers typically shop for and have been shown to drive engagement to nearly 60 percent.  While some cost-transparency solutions tout higher engagement rates, it’s important to remember that sustainable engagement is the goal – not just single encounters. Consumers must do more than just register to use a tool. They’ve got to register and then engage in the process of shopping for care – again and again.  Further, consumers who receive proactive, personalized savings information and act on that information are more than four times more likely to look up cost information in the future on their own.

Proactively engaging consumers around new savings opportunties – personalized to their needs – keeps healthcare top of mind and turns shopping for care into a habit.

Shopping for Care Pays Off: Navigating the Road Ahead

Engaging employees to shop for their care can result in significant savings for employers. An analysis of savings opportunities for an international diversified technology company in the Midwest with more than 40,000 employees found the company and its employees could save $17.5 million a year, or roughly $450 per employee, on “shoppable services”.

And it’s not just employers that save. A recent Change Healthcare study found employees in a CDHP who have access to cost transparency tools can increase their healthcare savings by more than 114 percent on average; families can increase healthcare savings 43 percent, compared to those in a CDHP without access to a cost transparency solution.[7]

Faced with skyrocketing healthcare costs and new insurance rules under the ACA, more of the nation’s biggest businesses will look to high-deductible plans, CDHPs and defined-contribution plans to reduce their healthcare costs, compelling plan members to become more proactive, informed healthcare consumers. We know that savings opportunities exist. It’s a matter of finding them and taking appropriate action.

To do this, consumers must have easy-to-use, personalized tools to keep them engaged in their own healthcare, and resources for staying abreast of the ever-changing healthcare landscape. The time has come to start shopping for healthcare the way we shop for everything else — with an eye for cost, quality and convenience and ultimately, getting the best value.


[1] American Association of Preferred Provider Organizations. AAPPO Survey of Consumer-Directed Health Plans. June 2012.

[2] Updated Estimates for the Insurance Coverage Provisions of the Affordable Care Act, Congressional Budget Office, March 2012.

[3] Analysis of Data from Change Healthcare’s Customer Database

[4] “Performance in an Era of Uncertainty: 1th Annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care.” National Business Group on Health. Web 3 Dec. 2012. http://www.towerswatson.com/assets/pdf/6556/Towers-Watson-NBGH-2012.pdf

[5] “The State of Consumer-Directed Health Plans in the Workplace: SHRM Poll.” SHRM. Web 3 Dec. 2012. http://www.shrm.org/Research/SurveyFindings/Articles/Pages/StateofConsumerDirectedHealthPlans.aspx

[6] “Beyond the Usual Benefits: 2012; The Power of Employee Education to Influence Workforce Satisfaction.” UNUM. Web 15 Feb. 2012. http://forms.unum.com/StreamPDF.aspx?strURL=/FMS_099229-4.

pdf&strAudience=StreamByNumber.

[7] “The Case for CDHPs: Why Your Business and Your Employees Should Consider Abandoning the Traditional PPO.” December 2012. www.ChangeHealthcare.com.

Employee Benefit Plan Review 3.2013

New Age of Healthcare Requires New Behaviors, New Attitudes

Posted Fri, March 01, 2013

By Doug Ghertner For Managed Care Outlook March 1, 2013 Health and wellness are often top of mind at the start of a new year – a time when many of us make resolutions to lead healthier lives. This year, however, amid the complexities of health reform and with the increased focus on the individual […]

By Doug Ghertner
For Managed Care Outlook
March 1, 2013

Health and wellness are often top of mind at the start of a new year – a time when many of us make resolutions to lead healthier lives. This year, however, amid the complexities of health reform and with the increased focus on the individual market, either through exchanges or Medicare – health and wellness are receiving even greater attention, especially among employers and employees seeking ways to manage rising healthcare costs. Both parties want more effective strategies for ensuring high quality, cost-effective care, and many are looking to their managed care providers to deliver them.

Managed Care Outlook 3.2013

Making the Financial Case for a Client’s CDHP Switch

Posted Fri, February 01, 2013

Employee Benefits Advisor February 2013 A Change Healthcare case study says that employers should consider abandoning a traditional preferred provider organization in favor of a consumer-directed health plan. The study finds that 91% of employees with families and 65% of employees overall would have spent less with a CDHP. http://www.changehealthcare.com/downloads/press/2013.02%20Employee%20Benefit%20Adviser_By%20the%20Numbers.pdf Employee Benefit Adviser_By the Numbers […]

Employee Benefits Advisor
February 2013

A Change Healthcare case study says that employers should consider abandoning a traditional preferred provider organization in favor of a consumer-directed health plan. The study finds that 91% of employees with families and 65% of employees overall would have spent less with a CDHP.

http://www.changehealthcare.com/downloads/press/2013.02%20Employee%20Benefit%20Adviser_By%20the%20Numbers.pdf

Employee Benefit Adviser_By the Numbers

 

Should Health Insurance Be Like Car Insurance?

Posted Wed, January 23, 2013

By Jen Wieczner The Wall Street Journal MarketWatch January 23, 2013 Car insurance companies reward good behavior: Drivers with records free of 15-car pileups and tickets for doing 90 in a 55 pay cheaper premiums. Health insurers, on the other hand, offer people little incentive to stay out of harm’s (and doctor’s) way. But a […]

By Jen Wieczner
The Wall Street Journal MarketWatch
January 23, 2013

Car insurance companies reward good behavior: Drivers with records free of 15-car pileups and tickets for doing 90 in a 55 pay cheaper premiums. Health insurers, on the other hand, offer people little incentive to stay out of harm’s (and doctor’s) way. But a growing number of health advocates say this is a mistake, and that the system would function better if bodies were treated more like Buicks.

With policymakers still ironing out the details of the nation’s health-reform plan, hospitals, corporations and consumers are all trying to figure out ways to save on medical costs. While employers and health insurers have tried to steer plan members to lower-cost care and healthier behaviors in order to save the companies money, employees often pay the same amount in premiums and copays no matter what. Since employees generally don’t see any financial benefit from choosing the cheaper option — for instance, urgent-care clinics over emergency rooms — experts say it’s no surprise consumers are unwilling to do their employers any favors.

Some Fortune 500 companies and other employers — from JetBlue to IBM to equipment manufacturer Caterpillar — have begun to experiment with new health-care models that allow employees to keep some of the money they don’t spend on health care, or that reward or penalize them based on how well they manage their health.

Many of these plans more closely resemble auto insurance — with healthier employees effectively paying less than colleagues who are at greater risk for developing diseases related to smoking or obesity. For example, 38% of companies planned to charge higher premiums or deductibles in 2012 to employees who smoked, had high cholesterol levels, did not actively treat a chronic condition like diabetes or high blood pressure or failed on other health measures, according to Towers Watson — the same way people with speeding tickets pay higher auto insurance rates to compensate the plan for their greater risk of car damage.

And although healthier employees may not be paying lower premiums, per se, while their unhealthier colleagues get penalized, they may get to see some savings later on, as 80% of companies planned to financially reward employees for healthy behavior (such as participating in weight- or disease-management programs) in 2012, according to Towers Watson. Such incentives often take the form of deposits into an employee’s health savings account, say experts, or removal of the premium penalties if employees show they’ve quit smoking or lowered their blood pressure. Experts say the rewards are the equivalent of lower premiums for safe drivers: After IBM began offering employees rebates worth up to $300 a year for participating in exercise and nutrition programs, the company saved $190 million in health care costs between 2005 and 2007, says a spokeswoman. IBM employees spend up to 60% less on their overall health-care bills than industry norms, according to the National Business Coalition on Health.
This year, JetBlue launched an overhauled health plan designed to simultaneously reward healthy employees and save the company money— with crewmembers who participate in wellness programs ultimately paying less for their medical benefits. Employees can now earn up to $400 individually or $800 for a family by participating in certain health programs, and workers with some chronic conditions can snag an additional $250 individually or $500 per family if they enroll in a care-management program. In a letter to employees explaining the changes, CEO Dave Barger said the airline’s old health-care model was backward: “Our plans are not structured in ways that are making us healthier — physically or financially.”
While reminding employees that they split JetBlue’s health-care bill with the airline, Barger linked the company’s success to employees’ “smart decisions,” writing, “I am convinced that solving for ‘health,’ where controllable and possible, presents the greatest chance of successfully arresting our rising health-care costs.” JetBlue did not respond to a request for comment.

Other companies are trying to solve their employees’ health problems by waiving copays for generic drugs, second opinions and preventive care, believing they will save in the longterm, since employees will be less likely to get sick. Some Cigna health plan members can now get free second opinions from the Cleveland Clinic. Companies like Dell, Caterpillar and Marriott have eliminated or reduced copays for certain medications and services, which has sometimes resulted in fewer employee health claims, according to a report by the National Business Coalition on Health. And an IT company that offered its workers free services at the on-site health clinic not only lowered its health costs but also saved its employees a combined $140,000, according to Change Healthcare. “Luring people into the good behavior by making it free is another way of sharing the savings on the frontend with employees,” says Dave Fortosis, a consultant in Aon Hewitt’s health and benefits practice. Dell, for one, knocks off up to $800 in annual premiums for employees who take a health survey and check in with a health counselor once a quarter over the phone, according to a company spokesman. Caterpillar and Marriott did not return requests for comment.

The basic “staywell” health plan concept isn’t new. Back in the 1980s and ’90s, some employers tried awarding cash bonuses to employees who spent little or nothing on health care. Publishing company Forbes Media, for one, paid bonuses of $1,000 to employees who filed no health-care claims, and a smaller prize to those who had less than $500 in health expenses. Employees of the Mendocino County SchoolDistrict in California received up to $500 back if they racked up less than that in health claims.

But those types of bonuses fell by the wayside as employers realized it wasn’t the best idea to reward people for never going to the doctor. “By and large, that approach fell into disrepute because employees or their families were not getting the treatment they needed,” says Fortosis. “Employees and families were just denying themselves care they needed so they could get a little cash.”

Indeed, those plans relied on a model that probably wouldn’t work for an auto insurer: After all, if you never take your car to a mechanic, there’s a greater likelihood it’ll have a major breakdown in the future. But employers have continued to tinker with and fine-tune the strategy.
Forbes’s bonus model was a precursor for its current consumer-driven health plan, featuring health savings accounts that the company was not allowed to offer at the time because of government regulations. These plans, which allow employees to personally save what they don’t spend on health care, are the wave of the future, some experts say. “You own it. So you pay attention. And that’s the whole premise behind consumer-driven healthcare,” says Margy Loftus, Forbes Media’s senior vice president for human resources.

Such consumer-driven plans as health savings accounts and health-reimbursement accounts allow employees to get their savings back, says Tony Holmes, senior health care consultant for Mercer, a firm specializing in human resources. Companies like Caterpillar and Dell have sweetened the pot further, offering incentives worth up to $900 for enrolling in an HRA, according to the National Business Coalition on Health Report, since the firms directly benefit when members use their health plan frugally, rather than forgo care entirely. “It makes a lot more sense to have your programs do that every time someone makes a decision, rather than sending them a check,” Holmes says. Caterpillar and Dell did not respond to requests for comment.

Some health-care experts feel that these new models perpetuate the old 1990s problem by discouraging some workers from caring for their health. But even employers with traditional health plans, which provide broader coverage at set monthly premium rates, have tried to encourage their staff to be thriftier with them. “We’ve seen their executive leadership tie what their company spends on healthcare to the company’s ability to invest in new facilities and bonuses,” says Douglas Ghertner, CEO of Change Healthcare, which makes health-care cost comparison tools for health-plan members. The logic: “Going to the lower-cost provider may benefit our company as a whole and consequently benefit you as an employee, because we’ll have more money to pay in bonuses because we’re paying less in healthcare,” Ghertner says. Pinnacle Financial Partners in Nashville, Tenn., for one, has been educating employees about finding lower-cost health providers and prescriptions because all employees are also owners of the firm, “So they have a vested interest in helping reduce expenses for themselves and for the firm overall,” says Stacy Gammons, a Pinnacle human resources specialist.

The new health-care models, say experts, so far fall short of allowing employees to share directly in the cash they save the company. But that may soon change, says Ghertner, as employers have begun to discuss paying employees a percentage of what they save the company on healthcare — for example, 20% of the cost difference between a $4,000 CT scan at a hospital and the same scan for $1,000 at an outpatient facility, or a potential $600 back to the employee. “I think you will start to see employers over time explore it,” Ghertner says.

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