Priority Health’s drive for greater consumerism in health care moved another step ahead in recent months with the addition of prescription drugs to the insurer’s online cost estimator.
The program now allows members to learn what they’ll pay for a medication at their retail pharmacy.
The addition of prescription drugs last fall for commercial enrollees — and this spring for Medicare Advantage members — builds on the dozens of medical procedures customers can look up using the cost estimator on Priority Health’s website. Users can log into the estimator to find out the price for a prescription at up to three different pharmacies, as well as see options for a lower-cost alternative prescription or generic drug.
One of the early lessons has been that prices for prescription drugs don’t vary all that much from one pharmacy to the next, which is in contrast to the wide variances that often occur in the costs of medical procedures within a given market.
Despite the relative lack of price differences between pharmacies, simply knowing the cost beforehand has benefits for consumers in an era of high-cost drugs. If a member can find out the price of a prescription ahead of time, they are more apt to shop around for all of their care, in essence becoming a better consumer of health care.
“In this particular case, there’s not a lot of difference on what they’re charging, but the value we see is in that we’re providing folks that cost before they get to the pharmacy counter,” said Nathan Foco, the senior director of market research and consumer analytics for Priority Health. “They’re informed much more than they used to be.”
In a recent conversation, Foco provided MiBiz an update on Priority Health’s transparency initiative.
Priority Health launched its cost estimator two and a half years ago and claims to have generated $7 million in savings on medical claims that occurred when users opted to have a procedure done at a lower-cost facility.
While the savings represent just a small fraction of what Priority Health pays out overall each year for medical claims and prescription drugs, Foco notes that “any savings is good savings.” That’s especially true given the popularity of high-deductible health coverage that has consumers paying more out of their own pockets for care.
The savings will only grow as use of the cost calculator increases and with prescription drugs now part of the equation, Foco said.
Looking at transparency in health care from a broader perspective, Foco adds that consumers today increasingly want to know prices up front before they decide where to go for a medical procedure or to get a prescription filled, just as they do in every other area of the economy.
Cost transparency “should be an expectation” from both consumers and employers when they select an insurance carrier for employee health benefits, Foco said.
“Members have to pay way more for health care than they ever have before. It’s their right to know the options and know the cost of care,” he said. “It’s their money.”
Some 10 percent of Priority Health’s 800,000 members have used the cost calculator, a rate that’s well above the national average of 2 percent to 3 percent for cost-estimating tools. Lately, Priority’s estimator has recorded 8,000 to 9,000 unique users per month who are looking up the costs they can expect to pay for procedures or prescriptions.
Priority Health plans to continue adding features to the estimator, including finding a way to look up the cost of a procedure while the member is at the doctor’s office. Care providers referring a patient for a procedure could look up the costs at varying facilities, and then let the patient decide at that moment where he or she wants to go.
“We’ve learned a lot of members certainly want to know the cost and what they can expect to pay, but they would like to have that as part of the conversation with their own doctors in their own doctor’s office,” Foco said.
Other future enhancements include adding medical procedures for Medicare enrollees and liquid medications to the pills, solids, chewable and capsule medications now available with the cost estimator.
“We’re going to continue to do what we can to provide information to our members that they want and they need to make decisions,” Foco said.