According to The Hartford Courant:
UnitedHealthcare launched a newer online program that allows 14 million of its members to compare current prices of medical services, including how much a patient will pay out of pocket.
The program is specialized to show how much the insurer would pay, and how much the patient would pay based on copays and deductibles in their own health plan.
The UnitedHealth states that its software “uses estimates based on UnitedHealthcare’s historic claims database, which includes 250+ million claims over the last five quarters, validated against fees. The information is also personalized to calculate estimated out-of-pocket expenses based on your employees’ plan and current benefit status.”
What is the catch? Well, this information is not publicly available; it is only available for UnitedHealth enrollees.
Why is UnitedHealth doing this? UnitedHealth assumes that if patients know which providers offer lower copayments or cost sharing, then their enrollees will be more likely to visit these providers. If UnitedHealth creates contracts with physicians strategically so that patient cost sharing is proportional to the amount UnitedHealth will pay, the insurer can incentivize enrollees to seek lower quality care.
What are some drawbacks for UnitedHealth? When these data are released, providers will have a better idea of what UnitedHealth is paying competing providers. For instance, when a physician sees that UnitedHealth is paying a nearby competitor 50 percent more than they are getting, they may ask for more money. UnitedHealth may assume that communication between providers is already sufficient so that most large providers networks know what insurers are paying their competitors. Further, listing prices may put pressure on large provider networks to reduce prices in order to keep patients.
How can providers fight back? One option is for providers to match any copayment. For instance, assume an enrollee can go to a high cost doctor or a low cost doctor. The high cost doctor has high copayment and the low cost doctor has a low copayment. The high cost doctor could offer to match the copayment amount of the low-cost doctor. If copyment amounts are proportional to overall payments, then physicians will still earn more revenue by charging high prices to insurers and offering a rebate. See the example below.
|Cost||Doc 1||Doc 2||Doc 2 (Price match)|