Cypress U | October 30th, 2018
One of the biggest issues in healthcare is the lack of pricing transparency by providers. Patients lack the ability to see what a procedure will cost before they go to receive the care. Once they see the price, the deed is done and it’s too late to consider other options.
Prices for common healthcare procedures have a variance of 500% or more. The average patient risks huge amounts of money by simply walking into the wrong hospital.
Deductibles are up 50% since 2009. This is costing patients huge amounts of money, especially considering 80% of non-chronically ill people never reach their deductible in the first place.
What does this mean? The majority of employees pay 100% of their healthcare expenses out of their own pocket. This can be financially devastating for the average consumer.
In order to lower costs, it’s important that patients have access to pricing information so they can make an informed decision about where to receive their care.
We identified over 50,000 cases where people could save money on the claims they received – totaling over $16,000,000 in savings among our clients.
Through our provider transparency program, members can establish what the fair price is for common procedures. These procedures can include General Diagnostics, Women’s Health, Bone & Joint, MRI Imaging, CT Imaging, Ultrasound, X-Ray, and IP/OP Surgery Procedures. They all have several things in common: They’re non-emergent, and get scheduled well in advance. They also have a massive price variance between different providers.
Procedures like these accounted for 22% of all procedures in the Cypress book of business last year. 48% of the medical spend on these services can be saved by using lower-cost, in-network providers. Thus, it becomes crucial to help members understand which providers offer better prices and higher quality services.
In this case, the fair price was set at $683. however, some people were paying as much as $4000 for the same procedure. Can you imagine you paid over $4000 for a procedure that shouldn’t cost any more than $700. To compare the markup to a real world example, that’s like paying $68 for a hamburger. You’d never overpay that much for a burger, so don’t let your employees overpay for healthcare either.
In addition to the variance in price, it’s important to not overlook the variance in quality of different facilities.
The quality of the hospital may be very different depending on the type of procedure being performed. For example, a hospital may have extremely positive clinical results when performing a cardiac surgery, but not-so-great results when performing a bone marrow transplant.
Because of this, rating each hospital on the procedure level is critical when steering patients toward the right place for their individual needs. There may very well be a hospital that will be the best in the nation for one patient, but a poor choice for another patient. If plan members make their care decisions based on this data, they will have a much lower risk for procedure-related complications. This leads to better healthcare for them, and lower costs for their employer.
By introducing members to transparency and providing all of that pricing information before they receive the procedure, they can make the best decision for themselves and save money.