Access to prices and just a bit of nudging seems to not only help members find the best deals on elective health services like imaging but also spur some competition among providers.
A price transparency program for MRIs launched by several Blue Cross Blue Shield plans led to more members using lower-priced providers, along with modest charge reductions by high-priced providers, according to a new study in Health Affairs by researchers with the firm HealthCore.
To find ways to encourage members to use high-value providers for elective MRIs, Blue Cross insurers in Georgia, Illinois, Ohio, New York and elsewhere set up an experiment of sorts between 2010 and 2012.
In Atlanta, Cincinnati, Cleveland, Indianapolis, and St. Louis, members whose employers were participating in a cost transparency program were informed of price differences at available MRI facilities and given the option of selecting different providers, with health plan representatives calling up members and discussing their choice. Another group of patients in Albany, Chicago, Hartford, Kansas City and elsewhere went about choosing an MRI provider without any special pricing information.
For the members in the price transparency intervention group, per test costs declined by $220 or 18.7 percent, the researchers found in a review of administrative claims data. Typically more expensive hospital-based MRIs fell by 15 percent in the intervention markets, representing more than half of MRIs in 2010 and then 45 percent in 2012, at the end of the study.
The researchers also found that the price variations between hospital and non-hospital facilities narrowed after prices were posted, with the variation declining on average 30 percent by 2012.
(Source: Health Affairs.)
While average MRI costs in the intervention markets were actually higher than in the reference markets in 2010 -- $1,050 for intervention groups compared to $870 for reference groups -- by 2012 the adjusted average cost was $958 for MRIs in the intervention markets and $992 in the reference markets, after accounting for inflation.
Even health plan members who weren't included in the program but lived in the same areas saw price reductions, suggesting "increased price competition among providers," wrote HealthCore senior research analyst Sze-Jung Wu and colleagues in Health Affairs.
"The program significantly reduced imaging costs," Wo and colleagues argued. "This suggests that patients select lower-price facilities when informed about available alternatives."