State Launches Cost Comparison Site

The California Department of Insurance has teamed up with Consumer Reports and the UC San Francisco to launch a new consumer-oriented website for patients to obtain cost information about the care they receive.

The website, California Healthcare Compare, aggregates quality data from the Integrated Healthcare Association, a variety of health insurers and other parties. The site, which was funded by a $3.9 million federal grant under the Affordable Care Act, provides a range of what an insured patient would pay for more than 100 different procedures by 22 different geographic regions, and rates individual providers on quality and outcomes on a five-point scale. Officials said that the website covers about 75% of the care paid for by insurers and patients in California.

“Price information is critical, and Californians have really struggled until this moment to get price information,” said California Insurance Commissioner Dave Jones at a Monday press conference announcing the website's launch. He said he had reached out to UCSF and Consumer Reports because involving an academic medical center and consumer advocacy organization would help bolster the overall effort.

Jones said he wanted to launch the website to address the huge disparities in what providers charge for the same service. He cited an instant where a constituent complained about the prices two nearby labs charged for blood tests. One charged $400 with an out-of-pocket cost of $200 the other, $3,500, with an out-of-pocket cost of about $2,000. “We've heard this all the time about consumers making these important decisions without cost information,” he observed.

Doris Peter, the director of Consumer Reports' Health Ratings Center, noted that the website was intended to deliver four different features: Easy-to-understand quality data; some personalized cost  estimates and stories from consumers about their healthcare experiences to help the site's users navigate the healthcare system.

However, the website is not capable of providing to consumers specific cost estimates for procedures. It only provides a range of out-of-pocket cost estimates for patients who have insurance – figures that can range from zero to thousands of dollars. 

Instead, the site encourages users to visit a variety of other cost-estimate websites run by insurers and other companies in order for consumers to obtain more specific data. 

“We decided to drive consumers, if insured, to their personalized cost estimator tools (provided by their carriers),” Peter said.

For example, users of the website can check for costs by 22 different geographic regions statewide. For breast cancer care in western Los Angeles County, the out-of-pocket costs for patients should average $594, with a high estimate of $3,297. The insurer would pay a range between $3,898 and $47,310. The data is also comparable to a statewide map to determine if such charges are on the high or low end for California. They can also compare providers based on their outcomes on a variety of care services.

Jones noted that such specific price data is unavailable on the new website because insurers are concerned releasing such information would place them at a competitive disadvantage by revealing too much financial data regarding their contracts with providers.

Few, if any states, have extensive policies that permit price transparency for healthcare services. A recent report by the Health Care Incentives Improvement Institute and Catalyst for Payment Reform concluded that only five states provide enough information for consumers to make informed decisions – California was not on that list.

And Massachusetts, which has actually mandated price transparency among providers and insurers, still has myriad obstacles in the way of achieving that goal. Consumer groups and even the Massachusetts Attorney General has issued scathing reports detailing obstacles individuals face in obtaining specific price information that is mandated by law.

Jones noted that insurers would have to provide "granular price information by provider and facility married to quality information,” in order to fulfill his ideal of healthcare price transparency. He added that he hoped the website would create enough consumer demand for information that insurers and providers would eventually accede to their demands.