Among the biggest obstacles in getting health plan members to comparison shop is the popular notion that "you get what you pay for" -- because it's actually true in most other industries.
"We're up against the basic beliefs that more is better and that higher costs mean higher quality," said Judith Hibbard, a University of Oregon health researcher, at a AHIP Operations and Technology Forum panel in Chicago.
In focus groups and surveys, Hibbard found that belief as the default among consumers when they were given information about costs for the same services at different hospitals. Cost acted as a proxy for quality.
When they were also given quality ratings at a "low signal," meaning it was a little hard to understand, "We saw a little bit of movement to the high value option," Hibbard said.
Then, when consumers were given easy-to-understand quality information (a "strong signal"), a majority chose the high value options, those with the lowest costs and highest quality rankings.
"If we fail to send a strong quality signal along with the cost information, we could be undermining our efforts," Hibbard said.
Health plans will have to be more creative in communicating the value of different healthcare options and the quality of providers; simply listing quality ratings or ranking providers along with costs may not be enough. It has to be meaningful at a personal level and also has to be succinct, Hibbard said. "If you can't see the best option in five seconds, you need to redo your data display."
For instance, one effective descriptor Hibbard found: "Patients who have their knee surgery at the lowest performing hospital have a 40 percent greater chance of a complication than patients who go to the highest performing hospital."
Among the first insurers offering members cost and quality comparison tools, WellPoint first deployed Anthem Care Comparison for members in Dayton, Ohio, in 2006, and by 2009 was offering it in the 14 states where it operates Blue Cross licensee plans.
The comparison tool shows members quality and cost information for about 150 inpatient procedures, and its cost transparency methodology is used in comparison tools offered by Blue plans in 49 states.
That tool for members, combined with reference pricing, where employers or other payers give providers a maximum price for certain procedures, has started to pay off, said George Lenko, WellPoint's National Network Initiatives director.
A reference pricing pilot for knee and hip surgeries that the California Public Employee Retirement System developed with WellPoint saved $55 million in 2011.
CalPERS and Anthem Blue Cross's reference pricing program asked members considering knee or hip surgery to go to one of the 46 hospitals that agreed charge $30,000 or less, or members could go to other providers but had to cover the costs above that price.
CalPERS's average inpatient costs for hip and knee surgeries dropped from $35,400 to $28,695, according to a WellPoint study published this past June.
Reference pricing should have a bright future, Lenko said -- although there was skepticism at the start. Some leaders at CalPERS thought the reference pricing program could have the unintended consequence of incentivizing all providers to list their prices exactly at or just slightly below the $30,000 reference. Instead, many higher-price providers started to drop their quoted costs.
"It's had a huge competitive impact for CalPERS," Lenko said.