The Dose

Welcome to The Dose, which tackles the finances behind local health care and life sciences and points to the most interesting national analysis. Your host is J.K. Wall.

Health Care & Life Sciences / Life Science & Biotech

Patients, providers respond after Anthem promotes lower-cost MRI facilities

August 25, 2014
Comments Print Reprints
Share More
/ Text Size+

If you're insured by Anthem Blue Cross and Blue Shield, and you’ve been told to get an MRI, chances are you have received a phone call from Anthem pointing you toward the lowest-cost MRI facilities in the Indianapolis area.

Most people ignore those calls, Anthem has found.

But the one of every six people who do heed Anthem’s advice have saved Anthem a chunk of money and, in the process, forced health care providers—especially hospitals—to sharply cut their prices.

Until recently, that has been almost unheard of in health care.

Anthem patients in five U.S. cities, including Indianapolis, spent $220 less per MRI scan after receiving those phone calls, compared with patients in nine other Anthem markets that received no phone calls.

Hospital-owned MRI facilities cut their prices 12 percent in the five cities where patients were called, compared with a 15-percent price hike by hospital-owned MRI facilities in nine cities where patients weren’t called. That's a 27-percentage-point swing.

That’s what Anthem’s sister organization, HealthCore Inc., found in a study of the program published earlier this month in the journal Health Affairs. The study compares the experiences of nearly 245,000 patients in 2010 and 2012. Its findings were adjusted for differences in the prevalence of the types of type of MRIs in the two groups of cities.

“The fact that we also saw a change in provider behavior, that was unexpected,” said study co-author Andrea DeVries, director for payer and provider research at HealthCore, a subsidiary of Indianapolis-based WellPoint Inc. that is based in Delaware. “Seeing competition in the marketplace is not something we’re used to.”

This is what Anthem did: Whenever patients in one of its health plans were referred by their doctors to get an MRI, Anthem would check if there was an MRI facility charging at least $400 less than the one a doctor had recommended. If so, Anthem called the patients and informed them of the price difference, which averaged $850 per patient.

The biggest differences in price are between hospital-owned MRI facilities and those operated independently or by physician practices. To understand why these prices differ so much, read one of my previous explanations.

HealthCore did not break out its results by city. But there has been evidence here that health care providers have cut prices on their imaging services, sometimes drastically. The starkest of several examples came from Indiana University Health, which reduced its prices on 38 imaging procedures last year by 60 percent to 80 percent, according to employers.

Anthem also saw health care providers slashing prices in California after it instituted a reference-based pricing program for joint replacement surgeries for retirees covered by Calpers. Under reference-based pricing, Anthem sets an amount it will pay for a certain procedure, and then makes patients pay the difference between the pre-set amount and the actual price if patients choose higher-cost providers.

Now, DeVries said, Anthem is going to study the impact on Calpers employees of the Castlight Health price transparency tool, which is been widely deployed by large employers here in Indiana.

I’ve written before that Anthem has historically shied away from forcing health care providers down on price. But now, it seems, the company—and its employer clients—are doing exactly that. And getting results.

ADVERTISEMENT
Comments powered by Disqus