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Consumer Transparency on MRI Costs Saved $220 Per Test in Overall Costs, Increased Competition among Hospitals

INDIANAPOLIS--(BUSINESS WIRE)--Aug. 4, 2014-- Consumers who chose less expensive MRIs after receiving price information helped save $220 per test in total health system costs, according to a study published in the August edition of Health Affairs.

The study also showed that this awareness was linked to a shift in consumer behavior, decreasing the use of high-cost hospital-based MRIs and ultimately reducing price variation between hospital and non-hospital facilities for consumers. The $220 in savings represents a combination of consumer out-of-pocket expenses and health plan or employer medical costs.

The study, commissioned by WellPoint subsidiary, AIM Specialty Health, and conducted by WellPoint health outcomes subsidiary, HealthCore Inc., reviewed data from about 100,000 members in WellPoint affiliated health plans in the Northeast, Midwest and Southeast from 2010 to 2012. Those in the program were made aware by telephone of MRI imaging cost differences and alternative providers with comparable capabilities close to their home when an order was made to a facility of much higher cost than available alternatives.

About 61,000 health plan members were part of an education program administered by AIM that makes health plan members aware of MRI imaging costs and proactively shares relevant information about alternative providers close to the member’s home. These program participants were compared to about 44,000 members who did not have the education program.

“The study showed that consumers are responsive to price information delivered real time as they are making health care decisions,” said Sam Nussbaum, WellPoint chief medical officer and executive vice president. “And, just as encouraging, is how providers reacted to this shift in consumer utilization–with more than 30 hospitals voluntarily negotiating with our affiliated health plans to lower their MRI pricing to stay competitive in the marketplace.”

Between 2010 and 2012, the average MRI price in the member group that did not have the education program went up by $125, while it decreased by $95 in the group with price transparency and education, creating a net health system savings of $220 per test. The price for hospital-based MRIs decreased by $175 per test after the program was implemented — an indication of a provider response, as well as a shift in consumer behavior.

Price variation in health care services has been at the forefront of health care discussions for several years. For example, price variation for imaging scans is widely documented with at least one study showing that MRI scans can vary in price from $300 to $3,000 with no demonstrated difference in quality.i

“We did see a modest decrease in costs to consumers for their out-of-pocket expenses, however cost reductions varied widely corresponding with a wide range of benefit plan designs,” said Andrea DeVries, senior author and HealthCore director of payor and provider research. “At least 30 percent of those in the program group had no cost sharing at all, making the findings all the more striking.”

As consumers continue to embrace insurance products with lower premiums and higher deductibles, out-of-pocket costs per procedure or service are expected to rise. Generally, about 15 percent of those who are part of the AIM outreach, decide to go with an alternative provider.

“Members have traditionally been responsible for only a small portion of a procedure’s costs,” said Brandon Cady, president of AIM. “As costs have risen, so has member cost share, but members don’t typically have efficient ways of comparing prices before receiving health services. This program reinforced to us that once members are made aware of similar services at a lower cost, they will often choose the lower cost service.”

The member education program also had a spillover effect in reducing prices for MRIs of members who did not have information on costs in those same communities because many hospitals renegotiated prices that later positively impacted all members getting MRIs at those facilities.

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i Hussey PS, Wertheimer S, Mehrota A. The association between health care quality and cost: a systematic review. Ann Intern Med. 2013;158(1):27–34

About WellPoint, Inc.

WellPoint is one of the nation’s leading health benefits companies. We believe that our health connects us all. So we focus on being a valued health partner and delivering quality products and services that give members access to the care they need. With nearly 69 million people served by our affiliated companies including more than 37 million enrolled in our family of health plans, we can make a real difference to meet the needs of our diverse customers. We’re an independent licensee of the Blue Cross and Blue Shield Association. We serve members as the Blue Cross licensee for California; and as the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as the Blue Cross Blue Shield licensee in 10 New York City metropolitan and surrounding counties and as the Blue Cross or Blue Cross Blue Shield licensee in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), and Wisconsin. In most of these service areas, our plans do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia and Empire Blue Cross Blue Shield, or Empire Blue Cross (in the New York service areas). We also serve customers in other states through our Amerigroup and CareMore subsidiaries. To find out more about us, go to wellpoint.com.

About AIM

AIM Specialty Health® is focused on driving appropriate, safe and affordable care through the healthcare system. For more than 35 million members covered across 50 states, D.C. and US territories, AIM targets the quality and cost of clinical services including radiology, cardiology, oncology, specialty drugs and sleep medicine. As a national leader in specialty benefits management, AIM helps health plans, providers and employers focus on the value of health decisions with an integrated suite of solutions combining clinical excellence, technology and superior customer service. AIM is a wholly owned subsidiary of WellPoint, Inc. (WLP). www.aimspecialtyhealth.com.

About HealthCore, Inc.

HealthCore, based in Wilmington, Del., is the clinical outcomes research subsidiary of WellPoint, Inc. HealthCore has a team of highly experienced researchers including physicians, biostatisticians, pharmacists, epidemiologists, health economists and other scientists who study the “real world” safety and effectiveness of drugs, medical devices and care management interventions. HealthCore offers insight on how to best use this data and communicates these findings to health care decision-makers to support evidence-based medicine, product development decisions, safety monitoring, coverage decisions, process improvement and overall cost-effective health care. For more information, go to www.healthcore.com.

Source: WellPoint, Inc.

WellPoint, Inc.
Lori McLaughlin, 317.407.7403
lori.mclaughlin2@wellpoint.com

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