Bringing Comparison Shopping to the Doctor’s Office
New York Times: Claire Cain Miller
Published: June 10, 2010

Even if a patient does want to comparison-shop, there is no easy way to obtain complete and useful information. It is a hole in the market that some companies see as an opportunity, especially because many Americans will soon have to pay more attention to what they are paying for, rather than count on insurance to cover everything.

But there has been no easy way for consumers to shop for the best deal on a colonoscopy or blood test. A start-up financed by prominent venture capitalists and theCleveland Clinic, Castlight Health, aims to change that by building a search engine for health care prices. Patients using Castlight could search for doctors that offer a service nearby and find out how much they will charge, depending on their insurance coverage.

A few others are starting to publish health care prices, including Thomson Reuters, a Tennessee start-up calledChange:healthcare, the New Hampshire government, which created a comparison shopping tool for residents, and health insurers. Aetna, for instance, has built tools to help patients estimate prices and may build more advanced tools, said Lonny Reisman, Aetna’s chief medical officer.

Price transparency could significantly change the way health care is bought in the United States. The notion “seems ridiculously simple and obvious, and in any other industry, you would say, ‘Duh, we already have that.’ But in health care, it’s revolutionary,” said Alan M. Garber, a professor of medicine and the director of the center for health policy at Stanford, as well as an investor in Castlight.

The lack of price information in health care has been a big driver of ballooning health care costs, analysts say, because costs are opaque to patients and heavily subsidized by employers. The patient has no incentive or responsibility to keep costs down. But many employers are switching to health plans that require patients to pay more out of their own pockets.

“Since Americans started having employer-sponsored health care, people are paying with someone else’s credit card, so we created a very inefficient market,” said Giovanni Colella, chief executive and a founder of Castlight. “Creating the right incentives changes the way people behave, and that’s where our company comes in.”

Dr. Colella started RelayHealth, which connects patients and doctors over the Web and was bought by McKesson in 2006. He founded Castlight with Todd Park, a founder of Athenahealth and chief technology officer of the federal Department of Health and Human Services.

On Thursday, Castlight announced that it raised $60 million from investors, in addition to the $21 million it previously raised. Safeway, the grocery chain, with 200,000 employees, has signed on as its first customer.

Castlight has received money from investment firms including Venrock, Maverick Capital, Oak Investment Partners and from an unlikely source, the Cleveland Clinic. Hospitals’ business models could be turned upside-down by price transparency.

Several studies and pilot projects suggest that the more patients know about prices, the more money they save. A study published last month by Mercer, a human resources consulting firm, found that people on high-deductible health plans, with more exposure to the prices of doctor visits, spent less. Indiana adopted high-deductible health plans, and the average expense in 2009 for patients on one of these plans was $6,393, compared with $8,570 for patients on a more traditional health maintenance organization plan.

“A lot of it is to understand the driver of costs and how they can start to control that, and encouraging that debate to happen while in the physician’s office,” Dr. Colella said. Castlight is working on a mobile version of the service to introduce next year so people can access the information from the exam table.

Health care pricing became part of the national conversation during the debate overhealth care reform. Prices will be important for the 30 million to 40 million people expected to join exchanges, which will encourage comparison shopping.

But so far, prices have been very difficult to find because health insurance providers and doctors negotiate rates and often agree not to reveal those numbers for competitive reasons. The Cleveland Clinic, for example, has about a hundred different contracts with insurance carriers, each with a different rate for a given procedure.

Ideally, transparency in health care pricing could lead to higher-quality, lower-cost health care, and more patient involvement in buying health care, said Delos Cosgrove, chief executive of the Cleveland Clinic. “Because they begin to realize that a trip to the doctor is not free, they might stay home and take the aspirin instead of getting the neurologic work-up.”

Castlight sells its service to employers and charges by employee per month. (It plans to eventually introduce a Web site for anyone to use.) Employees log on to a search portal, where they enter something like “colonoscopy” to find a list of doctors nearby and how much they charge.

Some insurers have shared pricing with Castlight, but the company gleans most of the information from the explanation-of-benefits forms that patients receive after a doctor visit. Castlight developed a way to pull the information from the millions of forms provided to it by employers.

Anyone who has read an explanation of benefits knows that it often raises more questions than answers, and Castlight says it wants to provide health education in addition to price information. The site explains why a patient has to pay a certain amount and the standard number of tests that a doctor would order for a particular problem.

Safeway has been experimenting with ways to cut health costs, including by using Castlight. “I’m a big believer in trying to create market forces wherever you can and then let personal accountability really drive the result,” said Steven A. Burd, the chief executive of Safeway.

For instance, Safeway pays up to $1,200 for its employees’ colonoscopies, a preventative procedure to detect cancer. If employees wish to go to a doctor who charges more, they must pay the difference. According to Castlight, colonoscopies in the Bay Area, where Safeway is based, range from $500 to $3,000, and sometimes a doctor charges different rates at different hospitals.

Castlight plans to add quality measurements to its price information. There are already several providers of that information, though there is no standard set of quality measurements in medicine. But even with quality ratings, there are many procedures for which Castlight’s service is not applicable. Someone suffering a heart attack is not going to check the Web before calling the ambulance, and a patient who discovers he needs emergency brain surgery is likely to prioritize quality above all else.

Even for more basic services, pricing is not always cut-and-dried. The delivery of a baby, for example, includes the hospital stay and the obstetrician’s fees, but could also include fees for a pediatrician, an anesthesiologist and specialists if there are complications.

At this stage, Castlight works best for big companies that are self-insured and for outpatient doctor visits for which quality does not vary greatly.

http://www.nytimes.com/2010/06/11/technology/11cost.html?emc=eta1

More firms see incentives, choices lowering costs
MEMPHIS BUSINESS JOURNAL – BY Christopher Sheffield

Caterpillar dealer Thompson Machinery is investing in an Internet-based system that will help employees make cost-effective health care choices, thus reducing their out-of-pocket expenses while helping the company’s bottom line.

It’s an additional investment Thompson officials say will pay off, and one facing many employers trying to combat the rising cost of health care by putting more control into the hands of employees.

The company is introducing its 450 employees, including 110 in Memphis at its regional headquarters and rental center, to a new Web-based portal designed to help them compare costs for medical services and prescriptions, get alerts on discounts and even coupons on commonly used medicines.

The company that developed the system is Brentwood, Tenn.-based Change: Healthcare.
Thompson’s human resources director, Thomas Kilbane, says the company enrolled for the Change: Healthcare service, which it slips right into its self-administered plan, because it creates an easy opportunity to save money.

If an employee can pay $80 for a medical procedure versus $100, that $20 savings means less out-of-pocket expenses, which stretches the employee’s health care dollars. Ultimately, it means less money Thompson Machinery will have to take from profits to fund its insurance program, Kilbane says.

Based on a model Thompson was presented by Change: Healthcare, it expects its annual savings to be in the six figures, Kilbane says.

“It was enough money to make it worth our time and effort to do this,” he says.
Christopher Parks, co-founder and CEO of Change: Healthcare, says using its platform to shop and compare prices, the average annual savings per employee can range from $200 to $400, with some employers reporting savings as high as $1,200 per employee.

Change: Healthcare charges $2 per employee to set up the system, then a monthly fee of $1 per employee. The total number of employees in its system is 92,000.

Parks believes current economic pressures, combined with uncertainties in the new health care reform law, create a tipping point for employers to take actions they likely needed to implement long ago.

“More employers this year and next will shift the benefit plan design where employees will have a great incentive to share the costs,” Parks says.

Cristie Upshaw Travis, CEO of Memphis Business Group on Health, says financial incentives are among the most effective ways for employers to drive down costs. Memphis Business Group on Health has 20 member companies that are self-insured with about 400,000 covered lives in the Memphis metro area.

Memphis Business Group on Health is a not-for-profit formed 25 years ago to provide companies with best practices and collaboration on health and wellness issues.

Financial incentives can take many forms, Travis says. For example, FedEx Corp., a member of Memphis Business Group on Health, has begun paying employees who are pre-disposed to diabetes $50 a year if they get at least one retinal eye exam and one A1c test that monitors glucose levels.

Since implementing the program 3 years ago, FedEx has seen a measurable decrease in emergency room visits and improvements on A1c lab results, Travis says.

A program implemented by First Horizon National Corp. in August allows employees to earn up to $500 a year by staying active and making healthier choices. Employees, who pay $2.50 per pay period to participate, wear a pedometer that tracks daily activity and can have key body metrics checked at designated kiosks.

Employers are increasingly coming to understand it’s in their financial best interest to help employees make healthy choices, since results could mean fewer absences and increased productivity, Travis says.

Parks, a health care administrator before starting Change: Healthcare three years ago, says comparing costs gives more control in the health care process.

“We’re not saying don’t go to the emergency room, but we can let you know when you spend a dollar if it is spent wisely,” he says.

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http://memphis.bizjournals.com/memphis/stories/2010/04/26/story4.html?b=1272254400^3235791
csheffield@bizjournals.com | (901) 259-1726

Doctor and HelloHealth founder Jay Parkinson explains why we don’t know what it costs to take care of our bodies, and how that might change.

We know how much we’re going to pay for almost everything in America, except health care. We can scan a barcode at Barnes and Noble and see how much Amazon charges for the same item. But say we’re uninsured in America and we need a hernia repair, one of the most common procedures performed by surgeons. Why won’t they tell us how much it will cost ahead of time? The simple answer is the cash paying patient isn’t the main customer of the sickness industry. Since 90 percent of sickcare is based on pre-negotiated prices between doctors and insurance companies, it’s in their best interest to keep prices secret so they can negotiate more strategically. While this is great for them, it’s a frustrating pain for the uninsured, cash-paying patient looking for a little transparency. But as today’s version of co-pay health insurance becomes increasingly more expensive, more and more people are going to be asked to spend, say, the first $5,000 out of their own pockets on sickcare. Consumers are going to start demanding transparency. Over the next decade, we’ll start seeing a whole new consumer-friendly ecosystem evolve to meet the demands of this changing market. We’re starting to see it already. Here are a few examples:

Change:Healthcare: They’re like BillShrink for medical bills. They help you save money on medical bills, prescription medications, and the like. If your doctor prescribes you a medication, they’ll tell you if there’s a low cost generic equivalent or where to get that medication for the lowest price in your neighborhood.

Minute Clinic: If you have one of the illnesses they can treat, they’ll tell you exactly what to expect and how much you’ll spend.

CarePractice: If you live in San Francisco, you’re lucky enough to experience a growing number of savvy young physicians who realize that an insurance-free practice is the best way to provide affordable health care. Since a doctor’s practice typically has about 65 to 70 percent overhead—mostly due to staff required for insurance billing—eliminating insurance allows a practice to function with much less overhead and, therefore, lower fees. Qliance in Seattle is another example.

Target: If your doctor prescribes a generic medication, it’s highly likely that Target offers it for $4 a month.

MyMedLab: If you need or want a test, head to MyMedLab and order it for yourself. Head down to a testing center and they will perform the test. Log in to MyMedLab and you’ll see your results. STD University is similar and also available for all of your STD testing needs.

Bumrungrad: Say you’re uninsured and you need a hip replacement. You’ll spend a cool $70,000 here in the United States. But if you would like to spend a fraction of that, you can travel to Bangkok where you can have an Apple Store-like healthcare experience for a fraction of the cost.

Although these aren’t perfect solutions, they’re surely better than nothing. Good luck out there.

Jay Parkinson, MD, MPH launched the online healthcare service, Hello Health, in 2008. More recently he co-founded the design and consulting firm, The Future Well, to design services and products that create health and happiness.

Read more: http://www.good.is/post/six-companies-pushing-for-transparency-in-healthcare-pricing/#ixzz0kSNMzHcs

With the recession and rising healthcare costs, many Americans are struggling to keep healthy.  By 2006, 19 percent of Americans spent more than 10 percent of their before-tax income on healthcare, according to a study published in last month’s Health Affairs. Fidelity Investments estimates that a U.S. couple retiring now will need approximately $250,000 to cover medical costs.

Robert Hendrick, co-founder of IT company change:healthcare, blames the fractured state of our healthcare system on a variety of factors: government policy causing ripples in the healthcare industry, a lack of incentive for medical providers to improve efficiency, employers who are out of touch with the cost of healthcare, insured consumers who are uninformed about medical expenses and willing to throw away $20 on a co-pay, and insurance companies that keep their reimbursement rates a secret. “There’s a complete and total disconnect all along the system,” Hendrick told the Sentinel.  “There’s room for everybody to take blame, and there’s room for everybody to improve.”

Often, consumers have no idea how much a given medical procedure costs until they’re hit with the bill. Insurance companies and healthcare providers may not give the information out readily, and consumers might be unaware of the wide range in prices. Hendrick gives the analogy of going to the grocery store and buying milk without knowing how much it costs. You might pay $20 for that milk, not knowing that the store down the road sells it for $3. “I can’t imagine a single situation where you’re better off not knowing the price,” says Hendrick.

Online cost estimators such as change:healthcare can help consumers take charge of spiraling healthcare costs. Started in 2006, change:healthcare is on a mission to cut through the fog surrounding healthcare costs. The company offers a “Savings Engine” that identifies the best prices for healthcare services and prescriptions from different providers. The system also alerts users to money-saving opportunities that are tailored to the individual’s needs. Hendrick says that change:healthcare promotes millions of dollars in savings annually.

Insurance payer UnitedHealthcare recently announced improvements to its Treatment Cost Estimator application. Members can view physician-specific pricing in more than 400 markets and information on 116 diseases, 90 medical procedures, and more than 500 services. The application also lets the patient know what their payment will be under their particular insurance plan.

Another insurance provider, Humana, offers an assortment of tools to help patients cut healthcare costs. The Compare Hospitals tool allows members to make side-by-side comparisons of medical facilities based on estimated costs, treatment outcomes, and more. The Family Health Budget and RxCalculator tools can help consumers project their healthcare and pharmacy expenses.

Aetna gives out cost information for more than 70,000 physicians in the United States. Members in Connecticut, Maryland, northern Virginia, Washington, D.C., and several other regions can view pricing info on 30 commonly used services and 30-day hospital readmission rates.

NewChoiceHealth allows consumers to compare costs for common medical procedures such as MRIs, mammograms and more. Patients have over 20,000 medical facilities and more than 400 procedures to choose from.

Savings Advisor, developed by pharmacy benefit manager Medco Health Solutions, gives patients a list of generic and lower-cost drug options based on their insurance coverage. A study conducted by Medco found that 14 percent of members who used the Savings Advisor switched to lower-cost alternatives, a 58 percent increase in conversion over the group that did not use the savings tool.

Medical cost estimators let patients take responsibility for their healthcare with just a click of the mouse. As healthcare costs continue to escalate, we will probably see an increasing number of patients comparison shop for medical services as they would for other necessities such as food or clothing. We would be happy to hear about additional online tools that can help patients save on healthcare.

http://www.onemedplace.com/blog/archives/4742

Co-Founder and COO Robert Hendrick spent a few minutes with the local TV crew to share tips on how to save money on your prescriptions. Easy steps that can add up to huge savings. You’ll be surprised!

Thanks for all of the support, and for trusting us to help you make smarter healthcare decisions and save money in the process.

Folks from coast-to-coast are talking about change:healthcare! The New York Daily News is talking about healthcare cost savings in the east, while the team was in California presenting as part of a panel at the Health 2.0 conference. And here at home in Nashville, the Venture Capitalist arena is buzzing about the company too. We are amazed by the number of people taking interest in saving money on their healthcare, and who trust us to help them out.

Below is a video from the Nashville NBC affiliate WSMV. The clip shows change:healthcare COO and co-founder Robert Hendrick working with the reporter to show people 4 ways to save on their medical costs.

All in all a very good week at change:healthcare! Thanks for all of the support, and for trusting us to teach you how to save money on your doctors visits and prescriptions, and to help you make smarter healthcare decisions.

In a phone call from the NPR affiliate in Nashville, Host & News Reporter Nina Cardona talked with change:healthcare Product Manager Chris McIntyre about a newly released service that lets people find the cost of a prescription by asking Twitter. The result… a segment on the Morning Edition radio show this morning!

The Morning Edition with Jacqueline Fellows runs each morning during the week. We are honored to be a featured part of the show. We have included a snippet below, just click play and see what NPR had to say about our new service! You can find more information, or listen to the entire show here. There is also a written transcript of the interview from Nashville Public Radio.

[Audio clip: view full post to listen]

If you have ever left the doctors office confused about a diagnosis or wondering how much your new prescription is going to cost you, you should definitely check out the new ASKch Twitter healthcare service.

About the ASKch Twitter Service

AskCH is a one-of-a-kind healthcare tool. Send a healthcare cost or definition question in the proper format, and receive the answer with a link to find detailed information! This service was designed to help you save money on your health related expenses and to learn about health issues. It will give you instant cost information for prescriptions as well as definitions for common health issues from change:healthcare. We exist to help people save money on prescriptions, doctor visits and medical procedures and try to teach people along the way.

Find out more about the ASKch Service at: http://ask.changehealthcare.com

About Nina Cardona, All Things Considered Host & News Reporter

A Middle Tennesseean since the age of two, Nina Cardona grew up in a home whose radio dials seemed to be permanently welded into the “90.3″ position. She credits WPLN’s music programming with triggering an interest in the arts that lead her to earn a Bachelor of Music degree from Converse College. After seven years as one of the station’ s music hosts, Nina became a reporter and local host of All Things Considered in 2004.

Now, healthcare answers come in 140 characters or less. Which is a far cry from the nearly 2,000-page health reform bill the U.S. Congress has been proposing.

Starting today, consumers can simply tweet healthcare questions such as “what is diabetes” to @askch and it will return a short description and a link to more information. Or tweet “cost of celebrex near 37209” and you get “average price of $163 in 37209″ in return.

The engine behind this new Twitter application is Nashville-based consumerism company change:healthcare, which uses the web to provide information to the public about healthcare, its costs and ways to save money. Company developers realized that the social media phenomenon could extend consumer information into the exam room, so they developed the first phase of what will be a much larger application that delivers accurate healthcare costs and information to consumers’ fingertips within 60 seconds, helping them be more informed and potentially save hundreds, if not thousands, of dollars.

Hey, when cutting the cost of healthcare, who needs Washington, anyway?

“It’s not everything you need to know, but it gets you to a well-informed starting point when you want to make a smart healthcare purchase,” says Christopher Parks, co-founder and CEO of change:healthcare. “If you’re looking for information about the cost of a prescription your physician is prescribing, then we’ve got an answer. If you want to know more about the flu virus, we get you started on finding out more.”

“It’s the first time ever that consumers can use an existing social media application to quickly discover – wherever they are — how they can save money on their healthcare. We already have the next iteration in beta that significantly broadens the information for consumers,” Parks said.

To work effectively, users first need to “follow” @askch from their Twitter account. Then, it’s simply a matter of asking questions via direct message (to keep responses confidential).

For the beta launch, change:healthcare identified the five most consistently asked questions at their website. As users provide more feedback about the service and their information needs via the @askch page, the types of information and questions will be expanded.

The search works using a pre-defined format: What is (health issue); What is (drug name); Cost of (drug name) near (zipcode); Generic for (drug name); and Generic discounts for (drug name) near (zipcode). Messages should be asked as listed and without punctuation.

For those that need it, the company has developed a simple tutorial .

Who is change:healthcare?

A technology firm focused on helping people save money and make informed healthcare consumer decisions, change:healthcare provides its users access to information about medical provider quality, cost, access and performance. There’s even an alert function that proactively notifies users when there’s a cost savings opportunity.

The company’s core business is providing employers and employees relevant and easy-to-use information about where in their area they can get the most cost-effective treatment, services and prescriptions.

“There’s a lot of misinformation about healthcare and costs running around out there.” Parks continued. “So when it comes to your health, it’s nice to know that there’s a professional source you can turn to 24-7 for a quick answer. Twitter just helps us compress the delivery time to consumers for that information. And all folks need to do is follow us on Twitter @askch.”

View the published press release and Download it in PDF format here.

Resulting Instrument Will Show Consumers, Employers, and Health Plans How to Obtain Up to 30% Savings in Healthcare Spending

San Diego, CA (PRWEB) August 31, 2009 — Two consumer healthcare technology companies today announced a strategic alliance to create the first personal health information tool with an embedded cost savings application to help employees, employers and the general public save money on their personal health spending. The tool will include a guaranteed return-on-investment (ROI).

Nashville, TN-based change:healthcare, a technology firm focused on healthcare cost transparency, and San Diego, CA-based MediKeeper, a provider of customized technology systems for the health and wellness industry, have joined forces to embed change:healthcare’s cost savings application in MediKeeper’s personal health information platform. The application will enable organizations and consumers to save money and make more informed personal health spending decisions. The companies will introduce the enhanced Medikeeper personal health information tool to large employer groups and health plans in the next few weeks with a direct-to-consumer version to be launched later this year.

As people continue to focus greater attention on their healthcare through the programs offered by employers and health plans, they become increasingly concerned with the ever-escalating costs of healthcare in America. More and more of the cost is coming directly out of consumers’ wallets and we are now able to lessen that

By partnering with change:healthcare, we’re offering all types of consumers an enhancement to our web-based personal health application that will help users understand how easy it is to reduce their healthcare costs by up to 30%.

We’re pleased that Medikeeper has recognized the change:healthcare platform as a critical tool that can help consumers better see where they can make changes in their purchase habits and increase the value of wellness programs

With Medikeeper’s leadership in the personal health application space, we hope to continue helping consumers navigate the American healthcare system.

“As people continue to focus greater attention on their healthcare through the programs offered by employers and health plans, they become increasingly concerned with the ever-escalating costs of healthcare in America. More and more of the cost is coming directly out of consumers’ wallets and we are now able to lessen that,” said Jason Peoples, vice president of Sales for MediKeeper. “By partnering with change:healthcare, we’re offering all types of consumers an enhancement to our web-based personal health application that will help users understand how easy it is to reduce their healthcare costs by up to 30%.”

Medikeeper (www.medikeeper.com) specializes in building and delivering online personal health management tools to help users become more informed and effective healthcare consumers. Its tools include a patient-centered personal health record, an enhanced health risk assessment and a consumer health information portal. Mostly offered in the workplace, these applications have proven to enhance the effectiveness of a company’s health and wellness programs. In 2008, the company was selected by the Dossia consortium, consisting of Fortune 100 employers such as Wal-Mart, Intel and AT&T, as one of the first personal health application vendors to be built on the Dossia platform.

A technology company focused on helping people save money and make more informed healthcare consumer decisions, change:healthcare (www.changehealthcare.com) provides its users access to personalized and actionable cost savings information. By analyzing claims data, change:healthcare works 24/7 to make saving money virtually effortless for users, as well as providing a way for users to more easily share healthcare experiences about medical provider quality, cost, access and performance to help them make the best healthcare decisions.

“We’re pleased that Medikeeper has recognized the change:healthcare platform as a critical tool that can help consumers better see where they can make changes in their purchase habits and increase the value of wellness programs,” said Christopher Parks, co-Founder and CEO of change:healthcare. “With Medikeeper’s leadership in the personal health application space, we hope to continue helping consumers navigate the American healthcare system.”

About MediKeeper
MediKeeper is a private company delivering we-based Personal Health Applications (PHAs) and technologies for patient-centered health information management. In 2008, the Company was selected by the Dossia consortium, consisting of Fortune 100 employers such as Wal-Mart, Intel and AT&T, as the second PHA vendor to be built on the Dossia platform. MediKeeper offers employers and healthcare providers a robust and consumer-friendly package of customizable we-based tools and content to assist with their health and wellness programs, enhancing ROI while improve the health and quality of life for employees and patients. The applications are built on top of MediKeeper’s one-of-a-kind platform, which enables industry leading data integration, reporting and user-interface customization. For more information, visit www.medikeeper.com.

About change:healthcare
change:healthcare, inc. (www.changehealthcare.com) is a technology company dedicated to helping people save money and make better healthcare consumer decisions. Their information and internet-based solutions are available to: third party administrators, self-insured employers and health plans interested in controlling healthcare costs and engaging their employees and members in making more informed healthcare decisions.

The Nashville Business Journal is talking about change:healthcare and the Keystone Institute’s new partnership.

“The Keystone Institute for Translational Medicine — an alliance of three Pennsylvania medical institutions led by Temple University — is researching the genetic, behavioral and social causes of diseases such as diabetes, hypertension, lung disease, obesity and certain cancers that affect urban and rural Pennsylvanians.”

Click here for the PDF of the full story.