03/13/2024
The following is taken from a Blue Cross of Louisiana bulletin. Apparently large increases are to be expected in the near future. I have already noticed larger increases in my 2024 group renewals.
It’s Not Just What You Get, It’s WHERE You Go!
The healthcare market is changing quickly, and not for the better cost-wise. Blue Cross of Louisiana spends at least 85% of the money you send them to pay for your healthcare services. And since care costs are going up, your premium costs are likely to go up. The care people needed that was covered through their health insurance in 2023, especially the increases in prescription drugs and hospital utilization, is driving big rate increases in 2024.
Why is it costing more for people to get care? Let’s start with something called “site of service.”
When you need a medical procedure, like chemotherapy or knee replacement or hip replacement or a hysterectomy, WHERE you have that done has a huge bearing on the cost.
Blue Cross saw three trends that accelerated in 2023 that are causing us worry now:
1. An increased demand for procedures like knee and hip replacements, which was not unexpected. A lot of people delayed a lot of procedures during the COVID-19 lock-down and subsequent surges and are getting them now.
2. What is unexpected is that patients are heading in droves (or being referred by their doctors) to the highest-cost places to have these medical services. That’s driving claims cost increases that are double our expectation.
3. Once patients go to a high-cost setting to get care, they don’t only pay more for the procedure. They also are charged huge amounts of money for the drugs they are given. These drug cost increases were TRIPLE our expectations during 2023, and you will see those rates reflected in your 2024 premiums. And these are the same drugs that lower-cost sites give patients having the same procedures, but the costs are significantly higher at the more-expensive care sites.
What Blue Cross has to pay to cover healthcare services for folks directly affects what you pay in premiums. And these three trends that increased the cost of care caused much of the increases you will see in 2024.
When we look at sites of service across the state, we see mammograms that cost four times as much in some settings as in others. Those most-expensive sites are typically hospital based-or-owned. And we are seeing similar trends, HUGE differences in pricing, in other services like lab work, radiology and colonoscopies. The “where” is often more important in pricing than the “what” or the “why.”
The National Picture
This massive discrepancy in prices between different locations has led to a national call for a new rule called “site-neutral payments.” Congress is debating this, and US Centers for Medicare and Medicaid Services (CMS) is studying it right now.
The concept is very simple: big third-party payers (think Medicare or Medicaid) would set a single price for a single procedure and then pay that same amount no matter WHERE you have it done. I would expect health insurance companies to quickly follow suit once site-neutral payments for government health programs are in place. Since cost-sharing for the average person is now higher every year, the actual cost of those procedures, especially when you have them early in the year, often comes right out of your pocket. Wouldn’t you like to save a few bucks?
How You Can Save Money on Healthcare
The good news is that even today if you need to have a procedure, we’ve made it easy for you to shop around ahead of time and find the lowest-cost option. Use a simple, online tool called Smart Shopper. Just plug in information from your health plan ID card, then create your free Smart Shopper account and start searching. In a few clicks, you’ll see how different healthcare clinics and facilities in your network compare cost-wise to each other.
You can look up most procedures that you’d need to schedule in advance (colonoscopy, mammogram, MRI, etc.) in Smart Shopper to price shop before you go. Keep in mind you don’t have to go to the site of service that your doctor referred you to if you find a cheaper option you want to use. As long as the lower-cost site is in your network, you can ask your doctor to refer you there. Taking the time to shop for these health services can help you save on your out-of-pocket costs like your deductible and coinsurance. And, you can help protect your health insurance rates by choosing wisely.
We work hard every year to project how much more healthcare is going to cost in the next year, and the year after that. We expected increased costs from factors like inflation, labor shortages in healthcare, and higher and higher prescription drug prices. What we didn’t expect was for patients to suddenly start seeking treatment—in larger numbers—in the absolute most-expensive settings. And, we know the cost of getting healthcare services never gets lower. So, taking a few minutes to compare prices online is the best thing we, as patients, can do to make a difference. Keep in mind that spending more money is not buying better care. It’s just more money out of your pocket.
Here’s a recent healthcare shopping adventure. I used Smart Shopper to look up a procedure I had in December 2023, a colonoscopy. I assume the doc will find something and I’ll need a biopsy, so I searched “Colonoscopy with Biopsy.”
Within 30 miles of me, I found seven sites that do colonoscopies, and all of them were in my network. The best deal? $1,169. The worst? $7,434! That HIGHEST-cost deal was in a hospital setting, and the least expensive was in an outpatient facility not affiliated with a hospital. Naturally, I took the less-expensive option, and everything went swimmingly! Needless to say, I will continue to ask my doctors to refer me to outpatient facilities.
What do you think would happen to your health insurance rates if everyone started getting the $7,434 colonoscopy and ignoring the other location where it’s just $1,169? Now extend that practice to EVERY procedure a person could-get, including knee replacements, hip replacements, chemotherapy treatments and hysterectomies, to name a few. The potential cost increases are staggering.
Unfortunately, these hugely expensive referrals were far too common in 2023, and are continuing into 2024, driving up everyone’s costs. This is leading to some unaffordable rate increases now, which will continue to plague us if we don’t take charge of our own care and start shopping to reverse this trend.
If doctors keep sending their patients to the absolute most-expensive settings for their treatments and surgeries—whether or not patients realize that’s where they’re going—they’ll be charged many times more than what the cost should be. And rate increases will continue.
