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The Bigger Picture

The launch of our new health care cost tool picked up some national attention earlier this month. Health care experts said the online tool gives the public more information for making decisions about their medical care.

But the tool itself is only part of the story. The bigger picture is that the curtain is finally being pulled back on what medical care actually costs. Insurers, businesses and consumer advocates are calling for greater transparency in health care — which is what the new online tool, with actual costs for 1,200 different types of medical procedures performed across North Carolina, is intended to provide.

Forbes.com health care writer Dan Munro declared our launch as “disruptive” for health care: “Clearly it’s not as sexy as many other tools that consumers use for shopping online (and there are lots of disclaimers), but it does represent the dawn of a new age in healthcare.”

He added: “Some said this could never happen. Others said it never would. The fact is — it just did.”

‘Important First Step’

For the North Carolina perspective we checked in with Jeff James, CEO of Wilmington Health, a large medical practice in Wilmington. He described our launch as “an important first step” in unlocking the health care cost mystery. “Blue Cross’s leadership with this tool will I think prove to be a catalyst for rapid improvement in transparency. It starts to shed some light on the tremendous differences in cost across our state.”

Ray Coppedge, executive director of Key Physicians in Wake County, counts himself another fan of cost transparency. “The sooner we have complete cost transparency and measurement of patient outcomes, the better off we will all be as consumers of health care services.”

Blue Cross and many others in health care believe that disclosing cost data is long overdue. In almost no other area of life are consumers asked to pay for a product or service without having any idea up front what it would cost. Cost transparency has that immediate benefit for consumers, but it also holds promise for keeping a check on rising health care costs as hospitals and doctors face more pressure to compete on price and quality.

Hospitals and physicians are engaged in the health care consumer movement, although opinions vary as to how best to disclose cost and quality data.

Meanwhile, transparency momentum continued last week. The Blue Cross and Blue Shield Association released the findings of a cost study across the nation’s system of 37 Blue Plans. It showed tremendous variations among hip and knee procedures — for instance, total hip replacement surgeries in the Boston area costing anywhere from $17,910 to $73,987. That’s a 313 percent price variation.

BCBSNC Cost Tool Available to Anyone

As for the BCBSNC tool itself, it lets consumers search by procedure or keyword to find an expected total cost for more than 1,200 procedures and tests. It’s available to anyone — not just our customers — and lets users compare costs between hospitals, physicians and clinics in a given geographic area.

It has some distinguishing characteristics worth noting:

  • It’s based on actual claims from providers in our networks — not the charges that hospitals publish.
  • It uses our most popular individual plans — Blue Advantage, Blue Value and Blue Select — as the basis for costs. If you have employer-based coverage, there could be slight variations in expected costs.
  • It includes the total cost of care, including such things as physician fees, facility fees, drugs, anesthesia and medical supplies.
  • It only includes BCBSNC claims data. If you’re a customer of another health plan, you might see a difference in costs from the data in our online tool.

The cost tool isn’t the first time BCBSNC has taken steps to empower consumers, going back to 2000 when we first put our medical policies on our website. Our first cost comparison tool, introduced in 2012, included a limited number of procedures and was available only to customers.

The long-term prognosis for health care transparency is good — the genie isn’t going back in the bottle — but there are a lot of additional steps to take. For instance, how should quality ratings and health outcomes be disclosed alongside pricing information?

Providers and insurers are now primed to discuss ways to share information with consumers, according to Munro at Forbes.com: “The fact is — while this represents great news for consumers (and a long time in coming), it could well be that the highest value isn’t to consumers at all but to the healthcare system itself.”

[top image: shutterstock]

About Kyle Marshall

Kyle Marshall, a senior communications specialist at Blue Cross and Blue Shield of North Carolina, writes about the health care industry and provides communications counsel and support to the company's executive team.

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