N.H. focuses on consumer price awareness to curb health care costs

Saying that many consumers are “price unaware” about health care services costs, the New Hampshire Insurance Department recently held a webinar aimed at raising consumer awareness about the importance of shopping for lower health care prices.

New Hampshire’s deputy insurance commissioner, D.J. Bettencourt, said a frequently asked question is what can be done to lower the cost of health-care services. One tool that can be used to address this issue is transparency, which enables everyone to shop for prices of various health-care services. This task seems simple, Bettencourt pointed out, but it is in fact difficult, and should be a top priority for everyone.

Jason Aziz, director of health analytics with the New Hampshire Insurance Department, said that the state has created NH HealthCost, a website that provides estimates of health-care costs using a database of claims data that is local to New Hampshire.

The site includes cost information from the state’s major health insurance companies. Its mission is to promote and protect the public good by ensuring the existence of a safe and competitive insurance marketplace through the development and enforcement of the insurance laws of New Hampshire.

Costs unknown until service is rendered

The underlying issue is that most consumers do not know the actual cost of the health-care services they are receiving until after the services are rendered and they get the bill in the mail, Aziz said. This is a major issue in the health care system.

“Our economy is built on our ability to make rational choices. Each consumer rationalizes the choices he or she makes,” he said.

Because many health care costs are often unknown before the consumer receives care, quite a few consumers tend to be price insensitive, which tends to make prices go upward.

“We are price unaware. The variation in prices does not drive our decisions to receive those services,” Aziz said.

But the more attention consumers place on lower costs, the more providers will lower their prices. And to exert lower prices, consumers must be aware of the prices of the services they intend to use. Federal laws require providers to be more transparent, and hospitals are also required to be more transparent and to post their prices for the services they render.

Shoppable vs. non-shoppable services

But not all services are shoppable, Aziz pointed out. The Centers for Medicare and Medicaid Services have identified a set of services that are deemed shoppable. The number of these services is expected to increase over the next 12 to 24 months.

Aziz then shared a few examples of shoppable services. They include radiological imaging, such as an MRI, a CT span, some Xray services, some lab tests, and arthroscopic knee surgery. Consumers can access this information and learn about these services before they receive them.

Services that are not shoppable include most emergency-room visits, most ambulance services, and services that are performed by a few providers.

Aziz urged consumers to be price aware, be price-sensitive, be rational, and be frugal. “It is the New Hampshire way,” he said.

Everyone plays a role in the health of the health-care system that cares for us, Aziz added. “If we share this responsibility, the weight will be manageable,” he said.

Aziz then gave an example of someone deciding to purchase a pair of jeans costing $200. “Does that individual need a pair of jeans that cost $200 or one that costs less?” he asked. This a rational choice he needs to make. He may not buy the cheapest jeans, but he will make an informed choice that serves him the best. “Making informed financial decisions is the New Hampshire way,” he said.

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at amseka@INNfeedback.com. 

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