Exorbitant healthcare costs remain top of mind for Americans, especially in light of the recent legislative announcements on price transparency. Due to the complexity of healthcare billing practices, consumers and employers are often in the dark about what they’re paying for, even though they shoulder much of the cost burden. With approximately 160 million Americans utilizing employer-sponsored insurance, improving transparency has never been more urgent as employers and consumers try to better manage the $1.5 trillion spent on healthcare each year.
On July 31, in Memphis, Tennessee, the Healthcare Modernization Task Force (commissioned by Governor Bill Lee) sponsored a timely transparency panel that included Bill Kampine, Co-founder of Healthcare Bluebook (Bluebook), Loren Adler of the Brookings Institution, Brett Meeks of the Center for Medical Interoperability, Steve Wilson of UnitedHealth, and Dr. Tim Vogus of the Vanderbilt Owen Graduate School of Management. Kampine helped frame the discussion by asking, “Why is transparency important for both consumers and employers in Tennessee?"
The answer is that consumers and employers pay the price for high healthcare costs every day. According to Bureau of Labor Statistics data, hospital prices have increased by roughly 5x the overall rate of inflation over the past twenty years, and medical services by 2x overall inflation. At the same time, utilization remains stable, proving that price (not increased consumption) is the issue.
In Nashville, the average market variance for the top 10 shoppable procedures (including colonoscopies, shoulder MRIs, and knee arthroscopies) is 563%, with almost all the variability determined by the facility where a patient chooses to receive care. That means that consumers who don’t shop for care can easily overpay by 6x the fair price for a common healthcare procedure. As more Tennessee employers move toward high-deductible plans with greater out-of-pocket costs for their employees, it is increasingly important for consumers to have the ability shop for care, reducing out-of-pocket costs and preserving their disposable income.
Tennessee has an outstanding business climate, with employers bringing new jobs to the state each year. To remain cost competitive, retain talented employees, and continue to offer competitive wages, Tennessee employers need to effectively manage healthcare costs. Leveraging transparency to ensure the consistent use of high-quality, cost-effective providers is a good start. Shoppable services account for 30-40% of total medical spend, and most employers can save 50% of their spend by using lower-cost, in-network providers.
Similarly, quality transparency increases patient safety and reduces cost by enabling consumers to identify and select facilities with excellent patient outcomes for a specific procedure, and equally important, avoid facilities with clear deficits in terms of patient safety, complications, and other key outcomes.
Kampine also shared insights on delivering an effective consumer transparency solution. A transparency tool alone is not enough, he explained. “A successful transparency solution incorporates member education, digital engagement, well-aligned benefit design, shared saving incentives and other attributes,” according to Kampine. In Bluebook’s experience, ongoing education and communication via games not only increases awareness, but also makes employees 11x more likely to shop for healthcare.
Since 2007, Bluebook has worked with employers across the U.S., including many large employers in Tennessee, to help their employees find the highest-quality, most cost-effective providers. For more than a decade, our objective cost and quality rankings have utilized independent data and are presented to employees in an easy-to-understand red-yellow-green color-coded format.
Have questions or comments? Let us know!