Do You Know the Price of Your Health Care?

Do You Know the Price of Your Health Care?

This blog is presented by Darrell Beckett, Divisional Senior Vice President of Texas Sales and Marketing for Blue Cross and Blue Shield of Texas.

You wouldn’t book an expensive vacation or buy a new car without knowing how much it cost ahead of time. So why are Texans expected to receive health care services without knowing how much they cost upfront?

The “buy first, ask questions later” way of receiving health care may be changing as transparency tools grow in popularity. These are online tools that allow you to look up the estimated price of common procedures ahead of time so you can make better choices about your care.

As health costs continue to rise, price comparison tools are becoming more and more important. Blue Cross and Blue Shield of Texas (BCBSTX) data shows that prices vary widely within the state of Texas. The average cost of a moderate procedure like a cataract removal, sinus surgery or tonsillectomy in Houston is about $2,800, but they can range from as little as $275 to as much as $11,000.

For more major procedures, such as weight loss surgery or a knee replacement, we see costs ranging from about $11,000 to nearly $68,000 in the Austin area. In the Dallas-Fort Worth area, which has the highest per capita spending on health care in the country, costs can be as high as $72,000 for major procedures. The price you pay depends on a number of factors, including the doctor or hospital where you have a procedure done.

With prices like these and more cost burden being shifted to the consumer through high deductible plans, it can really pay off to check out your options. BCBSTX has a number of tools available to help members make the best health care decision, including our Provider Finder & Cost Estimator Tool, which is available through Blue Access for MembersSM.

However, for some people, simply saving money on out-of-pocket health costs isn’t enough of an incentive to shop around for their health care. One study shows that although most Americans support the idea of price shopping, few actually do it.

Enter a new type of transparency program—one that gives cash rewards to patients who use cost comparison tools. For certain eligible procedures, including imaging, like a CT scan or MRI, or surgical procedures, patients can receive a check in the mail for using the tools and choosing a lower-cost provider.

And there is evidence that these rewards programs work when they are utilized. Using a sample of 270,000 BCBSTX members who were enrolled in one of these types of programs in 2017, we determined there was a total savings of $2.1 million for 135 eligible procedures. Employers may view these modest savings to still be beneficial as there is little risk in implementing the program. It also might increase price awareness among members, setting the stage for larger benefit design changes in the future.

These programs seem to work well for imaging procedures. People are more comfortable shopping around for simple procedures, like imaging services, but seem to prefer to follow their doctors’ referrals for more complicated, invasive procedures. The largest reduction in cost overall was for MRI procedures, which decreased about 5 percent. Almost 20 percent of members used the transparency tool and 3 in 10 chose to go to a lower cost provider. 

Although there is some concern that people will use more services when they are given cash to go to certain providers, utilization actually went down by about 1 percent. Rewards programs do not incent people to use more services.

Finally, using a transparency tool in the first place results in savings. Consumers who used the shopping tool to compare prices and ended up going to the lower cost provider suggested saved the most money overall. However, even if they didn’t go to the suggested provider, they still saved money if they used a transparency tool. Members who were enrolled in the program and used the transparency tool, but did not end up going to a provider that qualified for a reward still had an average savings of 7 percent over those who were not offered the Member Rewards tool at all.

Learn more about transparency tools and the price you pay for health care in this Blue Promise podcast, hosted by BCBSTX President Dr. Dan McCoy.