Transparency in the Evolving Health Care Market

The Affordable Care Act has had the unintended effect of boosting developing private exchanges markets where uninsured consumers compare and purchase high-deductible health insurance plans (HDHPs), according to Aite Group. As a result, the U.S. has 75 million HDHP consumers who have a serious reason to be more price-sensitive than traditionally insured consumers, the research firm said in its report, “Transparency in Healthcare: A New Market.”

Over the next 24 months, the growing HDHP market will bring increased attention to consumer transparency, and while much of that attention will be generated as private exchanges become a reality, the demand for greater price transparency is not exclusive to HDHP consumers. Uninsured consumers and non-HDHP insured consumers also seek out information aligning the quality of care with the cost to receive that care, according to the report. And providing the availability of consumer price information prior to making an appointment, at the point of service, and once the bill is received, becomes ever important.

For Aite Group’s report, the firm conducted 32 interviews — between Q4 2012 and Q2 2013 — with CEOs, CIOs and product and business development executives across banks, practice management software vendors, claims clearinghouse vendors, health insurers, private exchange operators, and early-stage third-party vendors.

Aite Group recommends health insurers view transparency as a door into new revenue streams and offer their members pre-service. They must consider the entire transparency value chain, which consists of three areas:

• Pre-service researching. Consumer-driven health care provider information, including price, quality, satisfaction, location, etc., is presented to assist consumers in their decision-making to select a provider.
• Point-of-service estimation. Consumers are presented a digital bill with explanation of benefits (EOB) and provider data accompanied with tools to assist understanding what services were covered and how the out-of-pocket amount was calculated.
• Post-service billing. The consumer billing is combined with the health plan’s EOB and the provider bill for a single consolidated statement with the anticipated out-of-pocket amount based on service and parameters including deductible status and the health care providers’ pricing schedule for that plan.

The insurers that can turn pre-service into an appointment for any of their network providers, and then drive transparency further through point-of-service and post-service are turning a free service for their consumer bases into a payment revenue stream, the report states. And, those adopting this approach use real-time adjudication for their consumer and provider networks will be best-in-class, Aite Group says.