Michigan’s Priority Health, a nonprofit health plan, launched a price estimate tool 18 months ago as part of an overarching effort to engage members in their healthcare.

“Evidence shows that consumers who are engaged in their healthcare have better outcomes,” says Krischa Winright, CIO. “We're passionate about transparency because we believe that it helps consumers get more engaged in their healthcare. Consumers are bearing more and more of the cost, which is driving them to be more and more interested in getting engaged and driving their own healthcare decisions.”

Priority Health members can search the health plan’s Cost Estimator online or via a mobile app to find the price of more than 300 procedures and services, from mammograms to hip replacements, at their provider of choice. The tool also calculates the member’s specific out-of-pocket responsibility (for example, any remaining deductible owed and co-insurance).

Krischa Winright
Krischa Winright

If a provider’s price is higher than fair market price, the tool pulls up providers that can provide the service for less. To help members make a choice, the tool gives each provider an overall quality score. Members can also see how far they would need to drive to get to different providers.

To further incentivize members to choose less costly providers, Priority Health is giving cash rewards of $50 to $200 to members who choose providers that offer a service below the fair market price.

“We have tens of thousands of users every month using the tool and saw an uptick in users in 2016,” Winright says.

Priority Health is well-positioned to be the source of truth for its members on healthcare prices. As a health plan, the organization has access to current contract prices it has negotiated with various providers as well as the details about each member’s health benefits.

A member only has to log into the Priority Health member portal or mobile app where the Cost Estimator is stored. Then the tool integrates data from various systems before calculating the member’s out-of-pocket responsibility. “When members authenticate within our environment, we already know what benefit plans they have, which helps us provide a personalized price estimate,” Winright says.

In comparison, many public-facing pricing tools give consumers a price range for an estimate based on historical claims obtained from various payers because they do not have access to each insurer’s contracted rates and the member’s benefit specifics. When Priority Health staff compared public-facing cost estimators on the market, they found that price estimates varied up to 100 percent to the actual price the consumer paid.

“Can you imagine putting something in your grocery cart that is priced between $5 and $100? And then you get to the cash register and it’s $300,” Winright says. That's the reality of what people are experiencing in healthcare, and we felt that consumers deserve something much better. Our cost transparency tool provides a much closer estimate because it is personalized.”

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Developing some aspects of the tool required sophisticated data analytics and collaborative thinking. Take, for instance, the tool’s inclusion of a fair market price for each bundled service. Developing that fair market price took input from Priority Health’s chief medical officer as well as actuary, IT, and data analytics staff. They needed to weigh the price that a provider charged for a hip replacement, for example, against quality issues, such as the number of hip replacements performed by that provider.

“Pulling a fair market for a procedure in a region is not-trivial. That takes analytics horsepower within your organization to be able to say, ‘What would we call a fair market price?’ And we have to factor in other things than just price. It’s about doing the right thing by our members from both a quality and cost perspective.”

Priority Health IT staff developed the Cost Estimator themselves, taking advantage of some specific components from various vendors. “It’s a hybrid, but most of it is internally developed,” says Winright. “This allows us to customize the tool based on feedback. If we were just relying on a vendor tool, that would be tougher to do.”

Winright and her staff track a variety of consumer-oriented metrics, including abandonment rates and time spent on the tool, to understand how members are using the Cost Estimator—and not using it. “When they abandon the experience, that gives you a clue that the tool is pretty burdensome at that point.

For instance, Priority Health used to indicate facilities that were above or below the fair market price with the colors red and yellow. When they realized this was confusing to members, they changed the experience so members only had to look for a trophy symbol to know they can win incentive dollars by choosing a lower-priced provider for a particular procedure.

Looking to the future, Winright hopes to create a more integrated experience for members across the entire Priority Health portal or app.

In addition to the Cost Estimator, the portal has other tools and information, including a provider search function, 24/7 virtual care, and current wait times at area emergency and urgent care centers. “We plan on connecting these functions more elegantly so the experience is more intuitive for the consumer,” Winright says.

One way might be to proactively alert members who are in the portal about other relevant information. For instance, if a member is searching for an orthopedic surgeon, the system might issue a digital alert that says something like, “Here’s a list of orthopedic surgeons in your network. What specific procedure are you interested in learning more about?” Then it might share quality and cost information about specific orthopedic procedures.

“As we continue to study consumer behavior, we are trying to address the issue of, ‘How can we make this relevant for this member at the moment that they need something and not necessarily before or after,” Winright says.

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