Get access to the exclusive HR Resources you need to succeed in 2018.
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 14 cities across the U.S. this fall.
Gain the skills you need to rise to the next level in your career. Jon us at SHRM's Leadership Development Forum, October 2-3 in Boston.
Communicate pointers for selecting reasonably priced health service providers
Within the 30 most populous U.S. cities, as well as among these cities, prices vary greatly for the same in-network medical service, according to a new report.
The Castlight Health U.S. Cities Analysis includes
an interactive U.S. map that highlights costs paid through employer-sponsored benefits for four common outpatient services. The findings are based primarily on claims data, augmented with provider rate sheets that list the negotiated price between a provider and an insurer, and other publically available data. Prices are defined as the employee cost-sharing plus the amount paid by the consumer.
Below are some of the key findings.
The range of prices charged by in-network doctors within the same city included:
• Dallas: Up to 23x for a lipid panel (from $15 to $343).
• Philadelphia: Up to 12x for a CT scan of head/brain (from $264 to $3,271).
• New York City: Up to 11x for an MRI of lower back (from $416 to $4,527).
• Phoenix: Up to 4x for an adult preventive primary care visit (from $40 to $195).
The most expensive and least expensive among the cities for four common outpatient services were:
• Lipid panel: Indianapolis was most expensive (average price $89) and Pittsburgh the least (average price $19).
• CT scan of head/brain: Sacramento was most expensive (average price $1,404) and Orlando the least (average price $611).
• MRI of lower back: Sacramento was most expensive (average price $2,635) and Seattle the least (average price $907).
• Adult preventive primary care visit: San Francisco was most expensive (average price $251) and Miami the least (average price $95).
“Understanding health care costs is a first step in enabling employers to fix what is broken in enterprise health care,” said Jennifer Schneider, M.D., vice president of Strategic Analytics for Castlight Health, a health benefits consultancy. “Many Americans believe if they select an ‘in-network’ doctor from their company’s health plan they are assured of paying less, or think that health care prices vary across the country but not in their backyard. This analysis dispels both those myths.”
Employers can provide their covered employees with information and tools to make them aware of these price variances and ranges—and “encourage them to take action to get great care at an affordable price,” Schneider said. As high-deductible health plans and increased cost-sharing become the new normal, employees are more likely to welcome help in finding cost-effective care.
To help select reasonably priced, high-quality health care services, Schneider encourages employers to incorporate a few simple pointers into their communication materials, advising employees to:
Establish a relationship with a primary care doctor. Your first visit with a new doctor costs 30-50 percent more than a return visit, even for new problems. You can avoid multiple first-time visit charges by maintaining a relationship with one primary care doctor. It’s important to select a primary care doctor that offers the affordable, high-quality care that’s right for you. Nonprofit programs such as
Bridges to Excellence and the
National Center for Quality Assurance Clinician Recognition database are resources to identify physicians noted for achieving quality standards.
Use national laboratory groups for blood tests. Similar to how you can take a prescription to the pharmacy of your choice, you can ask for a written lab order and take it to the lab of your choice. National laboratory groups have
significantly lower prices—up to 90 percent lower than high-cost hospital lab facilities.
Avoid going to the hospital for X-rays, MRIs, CT scans and other imaging tests. Similar to lab tests, independent stand-alone imaging centers can provide identical services for a fraction of the costs. The savings opportunities can amount to hundreds or even thousands of dollars.
Employer Plans Adopting Reference-Based Pricing
“While employee cost-shifting remains the most prevalent strategy for U.S. employers to reduce health care costs, there is growing interest in adopting new tactics,”
A new Aon Hewitt surveyfinds68 percent of employers plan to adopt reference-based pricing, “where employers set a pricing cap on benefits for certain medical services for which wide cost variation exists with no discernible differentiation in quality,” the June 2014
PlanSponsor article notes, adding, “Just 10 percent of employers have adopted reference-based pricing as a tactic today.”
Separately, an April 2014
analysis of health claims data by the Employee Benefit Research Institute (EBRI) found that if employers had adopted reference pricing for the six health care services EBRI analyzed, it would have reduced their overall health care spending by 1.6 percent that year.
To learn more, see the
SHRM Online article
Employers Turn to Reference-Based Health Pricing.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Do you have what it takes to win the war for talent? Find out.
SHRM’s HR Vendor Directory contains over 10,000 companies