- Health insurance companies are still struggling with improving price transparency in order to gain greater trust from their consumer base. One survey has shown low customer service satisfaction and a need for payers to inform consumers on their financial responsibility.
Additionally, commercial health payers may lose contracts with employers by lacking price transparency. For example, Adam Russo, Chief Executive Officer of Phia Group, explained to HealthPayerIntelligence.com last month that the lack of price transparency led him to self-insure his employees.
“When we decided to go self-funded, there was a very simple reason,” Russo said. “Every year, our healthcare broker would give us three options: keep what you have with a potential 15 or 20 percent increase, increase your copays and deductibles to your employees which would reduce the cost increase, and the third option is to offer worse benefits to your employees. That was it. There was never an explanation as to why any of this is happening.”
Another area in which payers have been struggling is how to incorporate user-friendly and consumer-oriented technology, said Michael Levin, CEO and Co-founder of Vericred. Ever since the Affordable Care Act led to the creation of health insurance exchanges, some private payers have struggled with using this platform. However, Vericred has been working with payers and providers to address these challenges and improve price transparency for consumers.
“There’s this element that the Affordable Care Act has changed and that’s distribution,” Levin outlined. “The Affordable Care Act marketplaces, particularly for the individual through healthcare.gov and state-based markets, fundamentally changed distribution and moved to an electronic marketplace. One of the challenges that health insurance companies have and continue to have is that they need to be technology companies and the vast majority are not technology companies. How do they engage these new distribution platforms whether they be state and federal exchanges or the many web-based entities that exist in the space?”
“They’re challenged by that because they don’t think about having APIs, structured data, or delivering data to these platforms. They’re focused on delivering healthcare through their plans. On the other side, consumers have a lot of choice. Here in New York, there are over 130 plans available to individuals. How do you navigate between eight or ten different carriers and the various networks to determine what’s the right plan?” he questioned. “Consumers have a need for decision support tools as simple as filtering and serving all the way through making a plan recommendation. Interestingly, both health insurance companies and consumers have, essentially, mirrored problems revolved around choice and technology.”
Technology is an important aspect of running a successful health insurance company today especially with regard to patient privacy and security. For example, this past winter, the health payer Centene lost six hard drives and had to announce that 950,000 of its members’ data is at risk. Blue Cross and Blue Shield of North Carolina also experienced some issues with inaccurate enrollment data due to technological problems.
“Information technology is an imperative for payers,” Kimberly Branson, the Vice President of Business Architecture & Strategy at health insurance company Medica, explained. “From a core administration perspective, the core responsibility of a health plan or a payer is to finance healthcare. The way that it’s done is pretty complex between the payer and the provider. Having information technology that helps to automate workflow and automate the transfer of information within and in-and-out of a health plan is critically important.”
“In an age where the industry is becoming even more and more focused on government oversight and compliance, improving automation improves quality, which improves your plan’s capability on ensuring compliance as well. Technology, from my perspective, is as important as the people and is as important as the process,” Branson concluded.
Price transparency and patient engagement tools aimed at improving customer service can help payers gain consumer loyalty. The company Vericred works with payers and providers to assist with transparency and helping consumers choose the right health plan to meet their needs.
“Our role in price transparency revolves primarily around the plan side,” Levin added. “Our data sets enable choice and enable those 130 plans to be displayed in a way that the consumer can choose. Our network and formulary data enable functionality to allow them to make the right choices. In the absence of price transparency, we find that often an individual consumer will buy the least expensive plan they can afford as opposed to the right fit. If you’ve got a high utilization individual - someone who is using the healthcare system - the least expensive plan they can afford may not be the right one because they’re going to be paying more out-of-pocket.”
“Our data brings transparency to plan selection,” he continued. “When we talk about the cost of service, at the end of the day, consumers care about how much they pay for service. Once you get outside of the deductible and out-of-pocket, consumers don’t have motivation to care about price. They don’t care if that MRI is $1,000 or $200. There’s a lack of motivation or incentive for them to seek out a lower-priced quality alternative. Some of the counters to that are high deductible health plans. There’s attention being paid to cost there, but the real issue is a lack of incentive and a lack of data around price transparency.”
Levin supports the idea of companies and payers bringing greater price transparency around physician care along with the varying costs of medical facilities and specialty care.
“We’re a data company and our data enables functionality, choice, and transparency,” Levin said. “Our plan design and rate data enables our customers to display choices among multiple plans and multiple carriers from which individuals can choose. Before the Affordable Care Act, there wasn’t insight into the fact that there are 130 different plans available in New York. Our data provides transparency into the level of varied options and choice. Provider network data is also important since it describes who’s in and who’s out in each plan’s network. These networks are getting narrower and fewer plans are being offered with out-of-network benefits.”
“The third leg of our health insurance data platform is formulary data. This provides transparency into drug coverage and cost. The whole EpiPen debate in the media has been a huge wind at our back here. It’s really elevated an understanding about how important formularies are. What our formulary data does is it enables individuals when they’re shopping to enter their drugs and see if they’re covered, at what tier level, what kind of restrictions exists, and what kind of cost the individual may incur,” he concluded. “Together, these data sets enable choice, bring transparency, and power decision support tools to help consumers make the right plan choices."