WellPoint Aims to Get Consumers To Compare Medical-Care Costs [WSJ]
By VANESSA FUHRMANS
September 25, 2006; Page A12
As the government and more employers push consumers to comparison shop for health care, the nation's largest health insurer is jumping in with an online tool that aims to show what dozens of hospital procedures really cost.
The service, which WellPoint Inc. is starting today in Dayton, Ohio, and will eventually take to other areas, is one of the most comprehensive efforts yet to make health costs more transparent. As health-care spending continues to soar, insurers and employers are requiring patients to pay higher co-payments and deductibles in the hopes they will become shrewder consumers. But health plans and medical providers rarely disclose the fees they negotiate upfront, and their Byzantine pricing systems make it hard to know everything that ultimately will be included in a medical bill.
Some major insurers already have launched pricing tools over the past year, but most with qualifications. Many provide only a general estimate or list the isolated procedure cost, leaving consumers to guess what will be charged for additional services, such as lab tests.
WellPoint developed its approach at the behest of General Motors Inc. which has 70,000 Dayton employees in WellPoint-administered health plans and said it urged the insurer to address those kinds of shortcomings. The tool, which lets the plan's enrollees compare the total estimated cost of about 40 common procedures at Dayton area hospitals, draws from more medical claims data than most -- that of the more than 300,000 local WellPoint members. It also attempts to cut through complex medical billing practices by listing the total cost of the care, from lab tests to recovery-room charges.
"Just to know what the components of care cost isn't particularly valuable," said Samuel Nussbaum, WellPoint's chief medical officer. "You want to know what the true episode of care will cost."
The tool shows how much costs can vary from hospital to hospital. The cost for arthroscopic surgery to repair knee cartilage, for instance, includes not only the surgical procedure itself, but also arthroscopy, anesthesia, drugs, miscellaneous supplies and possibly an implant, crutches or a walker. At Beavercreek Surgery Center and Samaritan North Surgery Center in the Dayton area, the total cost ranges from $2,132 to $2,673. On the high end, at Miami Valley Hospital and Good Samaritan Hospital, the same procedure goes for $4,964 to $5,728.
Some insurers say it is too early for consumers to respond to this sort of information by prodding hospitals and doctors to deliver most cost-efficient care. Aetna Inc., the first major insurer to disclose the actual fees it negotiates with doctors for certain services last year in Cincinnati and later other cities, said it hasn't seen much evidence of change in the way patients choose doctors or treatments.
Some critics say such tools still don't provide enough information as to what kind of care costs reflect. With WellPoint's method, low costs can reflect efficient care at a hospital -- for instance, if doctors avoid redundant or unnecessary tests or minimize complications. But they also reflect the prices negotiated with each hospital, which can vary with an institution's prestige or market share. "You just don't know what's all going into the mix," said Carol Mullinax, senior director of the Ohio State Medical Association.
Still, better cost information is a necessary first step to more transparency in health care, said Sam Shalaby, director of community health-care initiatives at GM. "Someone will always find a way to criticize the methodology, but you have to start somewhere," he said.
Consumers can click to another part of the WellPoint site that shows how hospitals rate quality-wise, according to data from outside health-information companies.
With $5.3 billion in medical costs last year, GM is the country's largest private purchaser of health care. But it is unclear to what extent such pricing tools would affect spending: Some salaried employees are in higher deductible plans, but most hourly workers are in plans with relatively little cost-sharing and have less financial incentive to compare costs.
Still, the auto maker says it is sending letters to employees urging them to use the site and hopes the public disclosure will prod hospitals to provide more cost-efficient care. |
