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2015: The Year of Health Care Cost Transparency

By Kyle Marshall | April 9, 2015 | Healthy Lifestyle, Industry Perspectives

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There’s more good news for health care consumers who want some idea what medical procedures cost — before they get the bill.

Consider these recent examples:

A startup called is partnering with public radio stations in Philadelphia, Los Angeles and San Francisco to ask consumer to share what they’ve been billed for medical procedures. So, instead of waiting for reports and data to be released showing what hospitals and doctors are charging, is providing a way for cost information to be “crowdsourced.”

Physicians are warming to health care cost transparency. And they’re in position to help drive it, according to panelists at the Summit on Healthcare Price, Cost and Quality Transparency held in March. “We know we need to bend the cost curve,” Divya Sharma, MD, a physician in Oregon, told MedPage Today.

And the Health Care Cost Institute launched a transparency site in late February called It shows cost information on more than 70 different procedures from the institute’s national database of health insurance claims. Available to anyone, it lists average costs for an entire medical encounter.

No doubt about it: Cost transparency is catching on. The secrecy around what medical procedures really cost has long been identified as a contributor to rising health care costs. Until recently, consumers haven’t had much ability to shop around on the basis of price and typically haven’t known what something costs until after the fact.


BCBSNC’s Transparency Tool

BCBSNC helped kick off an active year for health care cost transparency in January with the launch of our new transparency tool. It allows consumers to search by procedure or keyword to find an expected total cost for more than 1,200 procedures and tests.

Our tool is based on claims data and shows costs for the entire course of care. It allows anyone — not just our customers — to compare costs between hospitals, physicians and clinics in a given geographic area.

Health policy experts point out that cost is only one part of the equation. Consumers need just as much data on the quality of care. To that end, BCBSNC customers can check on quality designations among hospitals and physicians through our Blue Connect member site.

“Many consumers believe that the highest cost facility is the highest quality facility, but that’s often not the case,” said Susan Weaver, MD, the company’s chief medical officer.


What N.C. Consumers Want to Know

In the three months since our transparency tool went live, we’ve fielded questions and comments primarily along two lines:

  • Why are procedures priced so differently?
  • And how do insurers negotiate rates?

Answering the first question strikes at the heart of the issue: Costs have been hidden for decades, helping drive up U.S. medical spending by more than $100 billion a year. The cost of medical care tends to be based on a combination of many factors, including the hospital’s official list price, what Medicare is willing to pay, and how much competition there is for specific services in a market.

The theory behind cost transparency is that it will start to normalize — and in some cases, reduce — the actual amounts that consumers and insurers pay.

For the second question, health plans reach agreements with doctors and hospitals and agree to pay certain amounts. Because each insurer negotiates separately, customers of one health plan might see different costs from customers of another plan.

To learn more, visit our Let’s Talk Cost site, where transparency is highlighted as a solution to rising health costs.