How Cost Transparency Is Giving Power Back to Healthcare Consumers
Healthcare Simplified - Episode 7
August 28, 2017
Pratter, Inc. is bringing real-cost transparency of healthcare to millions of insured Americans, giving them power to spend (or not spend) as healthcare consumers.
Our guest on the Healthcare Simplified podcast was Dr. Bill Hennessey from Pratter. Dr Hennessey is passionate for people to realize their place as consumers, rather than see themselves as patients. He shared with us how cost transparency is helping employers and employees understand the true cost of healthcare.
This article covers the highlights of the interview.
The Need for Transparency
As an MD, Dr Hennessey saw first hand that his patients could either afford their insurance premium or their deductible--not both. He saw patients were avoiding seeing specialists and were intimidated or embarrassed to ask how much their treatments would be.
These high deductibles and huge out of pocket expenses mean healthcare is now consumerized, with patients becoming healthcare consumers. As consumers, there’s an expectation of “know before you go” pricing for medical costs, but unlike any other commodity, it’s difficult to know what the true cost is before buying.
Dr Hennessey explained that outpatient care is a commodity that often has very little difference in quality, but huge difference in price.
He started Pratter as a means to bring transparency of real outpatient medical costs so patients are fully informed, giving them the power, as consumers, to take their dollars where they choose.
They focus on three specific areas: blood work, imaging, and minor surgery-centered procedures. These areas are known to have significant variances and are some of the most common costs a relatively healthy American will need in any given year.
A year’s worth of blood work (four tests, on average) for a healthy individual varies from $200 - $800. In-network CT scans can vary from $300 - $1200. Most surprisingly, Dr Hennessey shared, is that surgery-centered procedures (such as colonoscopies) can vary as much as $2k - $4k.
The need for consumer cost transparency is significant when patients are avoiding care because they don’t know if they’re visiting a $300 CT scan provider or a $1200 CT scan provider.
What Pratter is Doing About It
Dr Hennessey’s dream is that anyone could use Pratter’s website to view real-time medical costs by zip code for the best options available to them, much in the same way they can book flights or search for car values.
For now, Pratter staffs highly educated medical billers who work with employers to provide this information to their employees by collecting anonymous data from state agencies, cold calls, and self-insured employers.
There are currently 60 million employees whose self-insured employers are sitting on their employees’ medical bill data and Pratter wants to collect and display all that information so everyone has the benefit of true medical cost transparency.
Know Your Data Rights
As an employer, you have the right to view, collect, and analyze healthcare costs for your business. It’s smart business, can save you money, and give you leverage with your insurer.
Since starting Pratter, Dr Hennessey has encountered many tricks of the trade where insurers try to blur the data. He shared with us the two biggest roadblocks to getting clear and analyzable data that he’s seen.
Firstly, never sign a contract with your TPA that will not allow you to audit your own claims. Health insurance companies have been known to do this, even though it is in direct violation of the law. You have a fiduciary responsibility to manage benefits and you can’t do that if you don’t have access to audit. You may as well be writing blank checks for healthcare that you don’t even know what it’s for.
Secondly, make sure your contract stipulates that you aren’t charged to review medical claims and bills.
These are the two most significant roadblocks to obtaining data.
How Pratter is Setting the Standard
Pratter has true transparency of real medical costs as they are completely independent from any health insurance company, which allows them to be 100% loyal to employers and employees. This transparency means options and Pratter are actively seeing employer’s healthcare costs going down, without affecting the quality of care.
A cost savings analysis is performed every six months for each employer where Pratter identifies, itemizes, and targets high-cost commodity care items, which not only gets reported to the employer, but is also sent out to employees.
Pratter is actually very proactive in helping employees understand their healthcare costs and options.
Employees can login to an employer-specific Pratter website where they can search for in-network providers by procedure. Not only do the results show the providers, but they are listed by cost for procedure, from the lowest to highest, as even in-network costs can vary greatly.
Employees are also given “Pratter Savings Cards”. These wallet-sized, cheat-sheets list the best priced providers for blood work, imaging, and surgery-based procedures, identified were identified by network and zip code. It’s a quick reference guide for employees to carry with their insurance or health card.
If you’d like to know more or want talk to Dr Hennessey about how cost transparency gives power back to consumers, saving your business and your employees money, you can reach out to him via email at: email@example.com
This post is based on a podcast interview with Dr. Bill Hennessey from Pratter, Inc. To hear this episode, and many more like it, you can subscribe to Healthcare Simplified. If you don’t use iTunes, you can listen to every episode by clicking here.