The state’s largest health insurer has unveiled an online cost tool Wednesday that exposes wide disparities in billing patterns among North Carolina’s doctors and hospitals.
Blue Cross and Blue Shield’s online feature – bcbsnc.com/healthcarecost – shows price differences of thousands of dollars for the same procedure among the state’s health care providers.
Just within the Charlotte region, costs for a knee replacement range from about $20,000 to $40,000. A screening colonoscopy for Blue Cross customers in the region ranges from $852 to $8,170, the new report shows. Those numbers show what Blue Cross pays providers for all aspects of the procedure, including anesthesia and facility fees.
It’s not unusual for insurance companies to provide cost comparisons for their customers. What’s different is that Blue Cross is revealing the information to the public, even though the rates don’t apply to people insured by other companies, which negotiate their own fees.
Disclosing the information, which has long been a closely guarded trade secret, will be a “key component of solving the health care cost problem,” Susan Weaver, Blue Cross’ chief medical officer, said in a conference call with journalists.
“We really believe the best way to lower health care costs is to have informed consumers,” Weaver said. “We are getting consumers literally begging us for this kind of information.”
But several health care advocates said the site will confuse and mislead the public.
Blue Cross announced its cost calculator tool just days after the N.C. Department of Health and Human Services began posting cost data submitted by hospitals, under a 2013 state law called the HealthCare Cost Reduction & Transparency act.
The law requires hospitals to disclose average negotiated settlements with insurers for the 100 most frequently provided services. It also requires hospitals to disclose the payment ranges made by the five largest insurers, which would typically include Blue Cross.
Blue Cross has objected to the law, saying it would reveal competitive trade secrets. On Wednesday, the company said its online tool is more comprehensive and customer-friendly.
“The data reported by the state will only cover the hospital’s fee for most of the services, not the total cost of care (additional fees for surgeons, anesthesiologists and others involved with the procedure),” Blue Cross spokeswoman Darcie Dearth said by email. “The vast majority of data in the state’s tool is for emergency care, not the types of treatments the consumers have the time to research.”
The Blue Cross comparison helps patients see, for instance, how much difference it can make to have a non-emergency procedure done in a doctor’s office instead of a hospital. One Charlotte doctor reportedly averages $856 from Blue Cross for doing a screening colonoscopy in her office and $5,024 when doing the same procedure at Carolinas Medical Center-University.
Health care advocates of pricing transparency said that Blue Cross’ online cost calculator doesn’t provide any useful information. They said the Blue Cross site doesn’t explain what the numbers mean, where they come from, and how they can be used.
“It’s absolutely appalling that they do not have a clear disclaimer on what the information is,” said Lynn Quincey, associate director for health reform policy at Consumers Union, the policy and advocacy arm of Consumer Reports magazine.
“It’s a bit unconscionable how little transparency there is on what you’re looking at,” Quincey said. “It’s unclear what they want a consumer to do with this.”
Weaver told journalists the information represents the amounts Blue Cross pays doctors and hospitals for elective, non-emergency procedures. The reimbursement amounts are negotiated between the insurer and the providers.
Typically, the insured customer pays a portion of those costs, with the insurer paying the rest.
Dearth said the costs are all-inclusive, so that a surgical procedure will include the fees for facilities, anesthesiology, pathology and doctors.
However, the site is not designed for Blue Cross consumers, who can look up precise costs they would actually pay based on the terms and conditions of their particular policies.
The information is of little use to people who aren’t insured by Blue Cross, since Blue Cross contracts with providers don’t reflect the reimbursement amounts paid to providers by Aetna, Cigna, UnitedHealthcare or others.
“If I’m covered by Cigna, I’m not sure what I do with this,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation. “Transparency for consumers requires a little more information.” Charlotte Observer staff writer Ann Doss Helms contributed.