The Truven Health Blog

The latest healthcare topics from a trusted, proven, and unbiased source.

Reference Pricing: Carrot or Stick?

By Matthew Collins/Tuesday, June 3, 2014
Matt Collins imageAs a recent Associated Press article pointed out that the Obama administration is supporting the continued practice of reference-based pricing, but that decision is being met with mixed reactions. Some say it’s an innovative healthcare cost-control strategy; others worry about the burden on patients.

Either way, it’s really only a matter of time before more employers and health plans begin to strategically implement the concept to reduce costs — because it works. Recent research studies show the use of reference pricing, where plans place a cap on what they will pay for a specific procedure, saves money for both organizations and patients alike.

The key for employers and health plans going forward, though, will be to decide whether to use reference pricing as an incentive or punishment — the proverbial carrot or stick.

Using it as a motivational tool, businesses can leverage the opportunity to inform consumers of reference prices — and then reward them for staying below that price. Rewards could take the form of gift cards for accruing X amount of dollars below the reference price, or even straightforward cash-back rewards equaling the difference between the reference price and the lower dollar amount charged by the provider.

And we already know that encouraging consumers with rewards is a great way to take overall engagement to a whole new level.

Of course, cost penalties that hit their personal pocketbooks can get the attention of consumers, too. Organizations could simply choose to present consumers with reference prices, thus making them accountable for the difference between the actual amount of the procedure over the reference price.

No matter which path an employer or health plan chooses, finding ways to boost cost transparency, like offering treatment cost calculators and other personalized tools, will be important as reference-based pricing gains ground.

Matt Collins
Director, Product Management

Proactive Outreach Can Increase the Success of Price Transparency Solutions

By Matthew Collins/Wednesday, December 18, 2013
Matt Collins imageLast month, Suzanne Delbanco of Health Affairs wrote an excellent blog post pertaining to price transparency solution entitled: “Price Transparency Tools: The Good News, the Challenges, and the Way Forward.” This article does a great job of articulating how far price transparency solutions have come over the years, and more importantly discusses what still needs to be done to ensure that users are adequately engaged to ensure that people a) want to utilize the solution; and b) want to keep coming back. Indeed one of the biggest challenges with offering a price transparency solution is to ensure that people are aware of and want to visit the solution. To paraphrase Ms. Delbanco, just because you build it, doesn’t mean they will come. Having single digit usage rates is not what an employer or health plan offering a price transparency solution is hoping for.
So, this begs the question, how can these solutions entice consumers to want to visit them initially, and become repeat visitors? Plan design plays an integral role in driving solution usage. A consumer with a very rich plan will have very little need to spend the time doing research to find a lower-cost doctor. Consumer-driven health plans give consumers “skin in the game.” For consumers in these plans, a price transparency solution essentially becomes a requirement. When every dollar (prior to meeting a deductible) comes out of the consumer’s pocket, finding a cost-effective doctor almost becomes a necessity.

As Ms. Delbanco points out, once these consumers hit their deductibles, they will be less apt to make return visits. I would argue that having health education content and valuable provider-specific quality metrics within the solution will assist in enticing these consumers to return to the site even after meeting their deductibles. The thought here is that consumers will initially be pulled to the site in search of provider-specific cost information, but then realize the benefits of being able to research the procedures via helpful health education information, and research physicians via robust provider-specific quality information.

At Truven Health Analytics, we are utilizing health messaging to further increase engagement with our price transparency solution. We are able to send proactive monthly messages to a population about gaps in care, preventive screenings, and cost savings and drive them to the transparency solution website. We mine claims data on a monthly basis and look for opportunities to message to a population related to their heath and financial well being. These messages are then sent out via email, SMS text, or the postal service. In the case of the email and SMS messages, users receive a message that states that the user has an important health message waiting in their own personal secure mailbox. This secure mailbox can share the same website as the price transparency solution and the messages themselves can contain messages directing the user to learn more about the costs of the procedure or condition. As a result of marrying an outreach solution with a price transparency solution, we are seeing some very encouraging results in terms of usage, as well as repeat users.

Matt Collins
Director, Product Management

Employers Can Learn a Valuable Lesson From Exchanges

By Matthew Collins/Monday, December 9, 2013
Matt Collins imageThe opening of the health insurance exchanges this fall has certainly put a spotlight on a few of the things that can go awry during insurance enrollment. But there are some important lessons that can be learned from it – lessons that can help employers as they begin to plan for next year’s open enrollment.

For instance, the exchanges attempted to guide consumers through the process by presenting premiums and designs of all the available plans, so quick cost comparisons could be made. That’s a good start for helping consumers choose the right plan, and a best practice already in place for most employers.

But it didn’t go far enough.

To be successful, the process is missing a key element: A truly personalized experience that would help a user get a handle on his or her specific situation – especially varying annual out-of-pocket costs, in addition to the plan premiums.

Employers have the capacity to help employees better understand those costs by providing actual claims data history during the decision-making process. That data history can paint an accurate picture of past out-of-pocket expenses. In addition, employers can ask a few questions about planned procedures and other anticipated costs for the coming year, and incorporate that information into the decision process.

Without this level of tailored, data-driven experience, your employees may simply choose a plan with the smallest premium, which doesn’t always pan out as the best option given other circumstances. Providing this type of detailed data can also help employees plan better pre-tax healthcare savings account contributions, too, and minimize surprises.

Of course, doing everything you can to help employees select their best-fit plan has benefits for your organization, as well. Employers using Truven Health Analytics personalized enrollment tools have seen results like a 60 percent decline in the number of over-insured employees and a 20 percent increase in consumer-driven health plan enrollment.

For more ideas on how to make next year’s open enrollment successful for both your employees and organization – despite growing complexities and costs – check out our complimentary insights brief, Six Best Practices for Open Enrollment.

Matt Collins
Director, Product Management

Can Personalized Healthcare Communications Really Drive Behavior? Yes, and Here’s How.

By Matthew Collins/Friday, October 18, 2013
Matt Collins imageAsk any healthcare consumer, and there’s a 50-50 chance that they have little idea, without a call to their doctor, when they should have specific, preventive cancer screenings based on their age, or what their target cholesterol levels should be for their specific health history, or what happens if they don’t take their blood pressure medication every day.

In fact, recent studies by Truven Health Analytics experts found that at least half of healthcare consumers don’t get the care they need (as recommended by evidence-based guidelines) and up to 50 percent don’t take medication as prescribed. That lack of knowledge is translating into higher healthcare costs for employers and health plans, which trickle down to the consumer in a time when everyone’s worried about rising healthcare costs.

There is good news, though, and it comes in the form of highly personalized healthcare communications.

More and more studies, including one published in the Journal of Public Policy and Marketing, prove that engaging people with tailored, timely, and relevant messages about their health improvement opportunities can increase care compliance by 10 to 20 percent. That type of boost can save employers, health plans, and consumers significant amounts of money, thanks to early identification and cost avoidance.

When we talk about cutting-edge, customized healthcare messaging that produces results in the real world, it goes well beyond the “it’s time to think about a mammogram” to “it’s been two years since your last mammogram, and here’s why that’s especially dangerous for you, and we know you don’t want to put your family at risk, and here’s how to act on this information in the easiest and most cost-effective way possible.”

The foundation of that type of detailed communication is the use of targeted data, analytics, and market segmentation. Those elements must continually inform not only the basic message content, but also the tone, emotion, and other tactics.

A recently published Truven Health insights brief, Four Steps to Creating Healthcare Communications That Drive Behavior Change, discusses how to accomplish this by basing communications on a consumer-specific profile, using eligibility, medical claims, and other available data. Data might include age, gender, ethnicity, family structure, and medical and drug history. The next step is to assign each individual to a refined demographic, psychographic, and behavioral segment, so that tactics, images, emotion-level, and preferred communications channel can be versioned by what they prefer and how they tend to react and behave when it comes to healthcare decisions.

This process has been delivering an ROI of 3:1 or higher in many cases — a boon for helping employers and health plans achieve financial stability when trends continue to consistently increase. The best part, of course, is that consumers benefit, as well.

Full Personalized Healthcare Messaging Brief Available
Download the complete brief, Four Steps to Creating Healthcare Communications that Drive Behavior Change.

Matthew Collins
Director of Product Management

Helping the Uninsured Navigate the Complexities of the Healthcare Marketplace

By Matthew Collins/Friday, October 4, 2013
Matt Collins imageIn the article titled “Obama: Healthcare as easy as online shopping” from the Los Angeles Times, the idea of a Kayak.com-like experience is touted as the way that the new healthcare marketplace is going to work for the millions of Americans who will seek health insurance in the next several months. There is a key element of personalization missing from this concept of point, click, and shop experience that the White House is promising. They are stating that an uninsured person will now have the ability to compare plans and determine which plans will “work for your family.”  I believe only half of this to be true. The fact is that users of the marketplace will indeed be able to view premiums and plan designs of the available plans. However, will this really mean anything to a person that has possibly never had health insurance?

The key component that is missing is a personalized experience to help the user understand what his or her out-of-pocket expenses might be. Health insurers have been showing individual shoppers monthly premiums for comparison purposes for years, so, this is really nothing new. What would be new and progressive is if these sites also helped the user understand what the total, annual out-of-pocket expenses (in addition to the premium) could be. By answering a few simple questions about chronic conditions, planned procedures and overall planned healthcare use, a user could be given a rough estimate of total out-of-pocket expenses. This could show the differences between a traditional PPO plan and a high-deductible plan. Without this shopping experience, the vast majority of these healthcare neophytes will elect to choose the plan with the smallest premium. This could cause financial woes once the medical bills start arriving.

In addition to the missing element of personalization, the marketplace is having a tough time handling the volume. The government was expecting a trickle into the marketplaces during the six month enrollment period. After visiting www.healthcare.gov the evening of October 1 and the morning of October 2, I was greeted with the following message:

“We have a lot of visitors on the site right now. Please stay on this page. We’re working to make this experience better, and we don’t want you to lose your place in line. We’ll send you to the login page as soon as we can. Thanks for your patience!”

Based on my experience it appears they weren’t ready for the volume they are receiving. It should be an interesting next six months to say the least…

Matt Collins
Director of Product Managemen