iLoveBenefits: Industry News Blog

Can anyone create a understandable explanation of benefits (EOB)

According to a recent survey, 95.5% of respondents had received a medical bill from a doctor, hospital, or health care provider in the past 12 months. Of those, 60.5% rated their medical bills as confusing or very confusing. Their frustrations included the following:

  • The relationship between bills from provider and the statements from insurance company: 50.6%
  • Not sure if the total owed was correct: 49.4%
  • The amount owed was a surprise: 48.8%
  • Unexpected expenses that were thought to be covered by insurance: 46.1%
  • Not sure if the insurance company had paid yet: 43.2%
  • The bill arrived a long time after the date of service: 42.3%
  • The relationship between the bill and insurance deductible: 35.1%
  • Didn’t understand the language on the bill: 23.5%
  • Wasn’t sure if everything listed on the bill really happened: 22.0%


Should the patient know what their cost will be?

Two-Thirds of Americans Surprised by Medical Bill in the Past 12 Months

Vitals recently conducted a survey on healthcare cost management. Here are some key findings from the report:

·         Two-thirds of American adults (155 million people) have been surprised by a medical bill in the past year.

·         7% of respondents said they receive incentives from their health plan to shop for cost-effective care.

·         Over half state that medical costs “seriously” or “very much” impact their household budget.

·         3 in 5 people never ask their doctor about the cost of medical services they’re about to receive

·         28% said price of care wasn’t discussed because they believed insurance would foot the bill.

·         Almost one third stated they didn’t think their doctor knew the cost.

Source: Vitals, September 30, 2015

October 5, 2015 | Categories: Benefits,Cost,healthcare | Tags: , , | Comments (0)

AHRQ Study: Cost Transparency Affects Patient Choice for Cataract Surgery


Patients in California chose ambulatory surgery centers over more expensive hospital outpatient departments for cataract removal surgery when they knew the costs of care, according to an AHRQ-funded study. The researchers looked at the impact of “reference-based benefits,” a new employer-based health insurance design that encourages patients to select lower-priced freestanding ambulatory surgery centers rather than hospital outpatient facilities. Analyzing this type of benefit design for cataract removal surgery from 2009 to 2013 among groups of California patients, researchers found that total employer and employee payments per procedure fell by 19.7 percent compared with those without reference-based benefits. Researchers compared data on 2,347 surgical patients ages 18 to 64 covered by the California Public Employees Retirement Systems (CalPERS) and data from 14,867 patients enrolled in non-CalPERS Anthem Blue Cross plans, which do not use reference-based benefits. With reference-based pricing, employers set a pricing cap on the maximum amount they will cover for certain medical services that have wide cost variations. The article and abstract, “Reference-Based Benefit Design Changes Consumers’ Choices and Employers’ Payment for Ambulatory Surgery,” appeared in the March issue of the journal Health Affairs.

July 2, 2015 | Categories: Cost,healthcare,Transparency | Tags: , , | Comments (0)

Health Plan Member Portals Are Coming of Age

Price Transparency Works

This from Greg Scandlen:

Price Transparency Works

The Journal of the American Medical Association (JAMA) has just published a new study on the ability of price transparency to lower costs.

The study, by Christopher Whaley et. al., was very large, involving over 500,000 individuals in 253,000 households. They were covered by 18 large self-insured employers, which adopted the Castlight Health price transparency platform sometime between 2010 and 2013. The employers represented a wide range of industries and offered a variety of health benefit designs. Every state in the country was represented.

The population was split into two groups – those who searched the Castlight platform prior to getting services, and those who did not. Each searcher could get estimates of personalized out-of-pocket costs based in their own plan design. They could also get non-price information such as provider qualifications and patient satisfaction ratings. The services studied were limited to three frequent but elective categories – lab tests, advanced imaging (MRIs and CT scans), and clinician office visits. The two populations groups could be compared both before and after the Castlight platform became available to them.

The results were interesting.

Before either group had access to the price transparency platform, the study group (those who eventually became searchers) had higher costs than the control group in two categories – 4.11% higher for lab tests, 5.57% higher for imaging, but 0.26% lower for office visits.

After the search tool became available, the study group’s costs went down – 16.93% lower than the control group for lab tests, 14.97% lower for imaging, and 0.76% lower for office visits. These are for situations where the patient had cost sharing responsibilities. When there was no cost sharing, the results were 14.13% lower for labs, 13.63% lower for imaging, and 2.26% lower for office visits.

Looking at both the before and after comparisons, the savings were significant — in the 20% range for labs and imaging, but not as much for office visits.

The study authors did not look at other metrics, such as health outcomes or patient satisfaction. But they did test for selection. The two groups were nearly identical in age, gender, health condition and use of services. The control group had slightly higher household incomes than the study group ($75,233 vs. $73,149) and somewhat higher medical spending ($559 vs. $495) in the year prior to access to the search program.

These are not “set the world on fire” results but they are significant. They illustrate that, given the tools and the incentives, health care consumers will indeed shop around for value, which means not just price but also quality and convenience. Importantly, the search for value seems to continue even when the financial incentive is taken away. The authors write –

“We also demonstrated that payments for claims, even without cost sharing, were lower for those who searched than for those who did not. This result may be in part due to inertia because clinician choices when employees must pay a deductible might persist even after they have reached the deductible and have little or no cost sharing.”

In other words, economizing behaviors continue even after the cost sharing is ended. This helps answer one of the objections critics have made about Health Savings Accounts. They have stipulated that having a high deductible may lower spending, but once the deductible has been met, they say, people will go wild consuming care that is suddenly free to them. That sounds plausible, and even I have been puzzled that HSA programs seem to save money across the board, not just on the lower cost services. Apparently thrifty habits persist.

Now, of course, our friend Uwe Reinhardt weighs in with a one-page commentary in the same issue of JAMA. Uwe is losing his touch. He starts right out with –

“Citizens in most economically developed nations have health insurance coverage that results in only modest cost sharing at the time health care is used. Furthermore, physicians, hospitals, and other clinicians and entities that provide health care within most systems outside the United States are paid on common fee schedules uniformly applied to all clinicians, health care organizations, and insurers.”

Of course, according to OECD, the United States has one of the lowest rates of OOP payment in the industrialized world (see chart below). And I am astonished to learn that Uwe is now a fan of fee-for-service payment. So am I. It will be nice to have an ally in academia. He goes on to complain of “cost shifting” by employers, but as an economist he surely knows there is no cost shifting, or more accurately all health care spending is already cost-shifted. Every penny the employer spends on health care is a penny taken out of wages. Employers concern themselves only with total compensation – the more they spend on paying for health services, the less they have to spend on take home pay.

OECD OOP cropped

But the most important error he makes is supposing that health care consumers need to have price transparency before they are allowed to control their own funds. That is exactly wrong. The reason we don’t have price transparency is because of third party payment. Consumers don’t know what things cost and don’t care because they are not paying the bill directly. The only way transparency will ever happen is when consumers demand it, and they won’t demand it until they control the money.

Meanwhile, the evidence is piling up that when people can control their own funds they do a very good job of using the money wisely – far better than any third party payer has done in the past fifty years.

Let’s get on with providing useful information to patients and their caregivers

Leapfrog is clearing the path forward and is a huge lever in our efforts to provide useful information to patients and their caregivers.


Healthgrades’ rankings website allows searches by experience A new version of the website that launches this week uses data from 500 million claims and patient reviews to rank physicians on complication rates, patient satisfaction and experience. Leapfrog Group CEO Leah Binder said the website is “game changing” because people can search for physicians based on experience in a specific medical area or procedure. USA Today (10/19)


One day, patients and their caregivers will have the important information they need to make important health decisions. Clearing that path and enabling appropriate measurement in both quality and resource utilization is among the most important things that health care stakeholders of all types need to be engaged in.

Open Payments website launches

The federal government today launched a highly anticipated website detailing at least $3.5 billion in financial ties in a five-month period between medical device and drug companies and physicians and teaching hospitals.

The Open Payments website is the first public repository of national data describing financial relationships between industry and healthcare providers. Critics of these payments say these payments can inappropriately influence clinical decisions.

The database was required by the Physician Payments Sunshine Act, a provision of the Patient Protection and Affordable Care Act that was spearheaded by Sen. Chuck Grassley (R-Iowa).

New Service Offers Real Price Transparency

CHEYENNE, Wyo., July 18, 2014 /PRNewswire/ — A new service aimed at simplifying the way doctors are paid for providing medical care is now inviting healthcare providers to sign up. This service, called, provides an integrated technology platform that allows medical professionals to register and list their services for prospective patients. Prospective patients have access to web-based and mobile technology that allows them to search these physician offerings by location and price. They have opened up an online registration tool through their website

Read more here:


Making prices consumers pay transparent may help control prices

Seeking Lower Prices Where Providers Are Consolidated: An Examination of Market and Policy Strategies, by Paul B. Ginsburg and L. Gregory Pawlson. The authors discuss a wide range of strategies at the disposal of payers and policymakers to curb the market power wielded by providers. For example, they point to the information systems that many private insurers are developing to produce real-time estimates of patients’ out-of-pocket costs—data that patients could use to become more price-conscious when choosing providers.

Then there is this:

Tthe Health Care Cost Institute announced that it will work with three health insurance companies – United, Aetna, and Humana – to lead an industry-driven effort to provide transparency on prices paid for health-care services by making them available on-line.  The new initiative will offer consumers a “reference price” for health services in their communities, based on aggregated data from insurers. Customers will get more information about prices, including how much they’ll have to pay out of pocket.  “The public has been clamoring for this,” said David Newman of the Health Care Cost Institute.  “This was the next natural step for us as an institute to evolve to.”

Beware of the upcoming insured and uninsured numbers

This from John Goodman’s blog post written by Greg Scanlen

“The new announcement that the Census Bureau is completely changing its Current Population Survey (CPS) questions about health insurance coverage is devastating for those of us who do health research. We have all known for years — decades — that the CPS count of the insured isn’t especially accurate. The questions it asks are about full-year coverage but people tend to answer based on their current status. It chronically under-reports Medicaid enrollment — the actual head count from Medicaid programs is always higher than indicated in the survey. The same is probably true for employment-based coverage. It has often been criticized for being weak on foreign language questions. Massachusetts, for example, has a significant population of people who speak Portuguese and that state thought the CPS failed to capture those people.

The Census Bureau recently (in 2007) revised its numbers because the software was misallocating people who reported that everyone in their family was covered. More on this below. But despite all this, the CPS numbers were very useful. It is an enormous survey of 78,000 households, and since it also asks about employment and income, it is possible to look at very detailed demographic categories. The error rate appears to occur throughout the data, it is not concentrated in any one demographic group, so it is not a factor in comparing sub-groups. And most importantly, it has been going on since 1987, so it is possible to measure changes over time — during, before, and after recessions, before and after new initiatives like the SCHIP program. And the state-by-state numbers are invaluable…

To drop everything that has gone before in favor of a brand new set of questions is unprecedented. And to do so at the very moment of the biggest revision of health care in American history is completely irresponsible. We simply will not be able to compare before and after ObamaCare, at least not based on the CPS. This is a tragedy. It’s not like the CPS hasn’t been revised before. A short paper explaining the 2007 revision lists the more significant changes over the years, including-Converting from paper to digital questionnaires in 1994. Adding child-specific questions in 1995. Adding “verification” questions for people who claimed no insurance in 2000. The 2007 revision explains how the Bureau did not just stop using one data set and switch to another. Instead, it went back two years and revised the numbers for 2005 and 2007 and provided instruments to allow, “advanced users the ability to approximate the correction for 1997 through 2004.”

Both sets of numbers were available for these years to maintain the integrity of the trend lines. If the Bureau were being responsible it would run the old questionnaire alongside the new one for at least three years, so we could measure the effect of ObamaCare independently of the effect of the new survey. That it has chosen not to do this only heightens the suspicion of a political agenda in play and further degrades the reliability and trustworthiness of anything that comes out of the federal bureaucracy in the Obama era.”

– See more at:


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