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Utahn vows website will 'bust open' health care prices

Published September 11, 2013 12:41 pm

His website's aim is to lower prices by distributing hard-to-find information.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

A Utah entrepreneur hopes to cash in on American outrage over the high price of health care with an online tool that will allow consumers to share billing data and shop for the best deals on procedures, from MRIs to joint replacements.

Randy Cox, founder and CEO of the American Fork start-up pricinghealthcare.com, said the idea was born from personal frustration. "My wife had been taking immuno-therapy for years and had a sudden jump in one of her bills of 25 percent. I started making some phone calls to find out what the price was based on and how it compared to those at other facilities and got nowhere. It's virtually impossible."

It's not as if Cox didn't know the right people or questions to ask. The Brigham Young University computer science graduate has worked as a software developer in the medical field for companies such as US Medical IT, Allscripts Healthcare Solutions and Misys Healthcare.

But hospital prices have long been a closely held secret. When insurance companies sign on with provider networks, they generally agree not to disclose their contracted prices.

The veil is slowly being lifted as consumers demand more transparency, but only enough to show tantalizing bits of information — never the whole picture, said Cox. "Our product is something that doesn't exist anywhere else, and it has the potential to bust the health-care pricing market wide open, saving a lot people hundreds of thousands on medical bills."

Earlier this year, the Obama administration published data revealing what hospitals across the country charge for common procedures. The data showed huge variation in prices across the country, even within states and cities.

Experts questioned the value of the information, arguing the charges are largely fictitious list prices or the starting point for public and private insurers to negotiate discounts. Only the uninsured and under-insured, such as those with high deductibles, are charged these rates.

Pricing Healthcare, on the other hand, hopes to allow you to search for a procedure and see which hospitals in your area have the lowest cash rate, insurance rate and list price — at least, when it's fully functional.

The website's strength — its crowd-sourcing method for collecting data — could also be its downfall.

Before you're allowed to shop the site, you have to contribute to it by entering data from one of your own medical bills or insurer-provided "explanation of benefits." And until a critical mass of people upload their information, the website isn't of much use.

You can test-drive a beta version launched earlier this month and register to enter data. But the only price comparisons you're able to see now are from hospitals in San Francisco, which are required by law to disclose their prices.

"It gives you a good feel for how it works," said an early user, Brent Bennett, an insurance broker in Provo who added that he heard about the site from a client. He uploaded his information hoping to "help the next guy" who visits the site.

Privacy concerns can make people wary about sharing health information. But Cox said Pricing Healthcare encrypts all of its data and shares no personal information, only aggregate billing data. It will verify the accuracy of data by watching for bills that seem to be outliers, he said, not by checking out individual bills.

He is enticing early adopters with the promise of free access. Consumers eventually will be charged an annual subscription fee of about $10 to $40.

He'll also sell subscriptions to insurers, insurance agents and hospitals. "Hospitals will pay a pretty penny to find out their competitors' prices," he said.

The company isn't without competition.

Healthcarebluebook.com publishes "fair" prices for virtually any procedure imaginable. "But they don't tell you where they're getting their data from," said Bennett.

Most major insurance companies, including Utah's SelectHealth, Regence BlueCross BlueShield and Arches Health Plan, have searchable databases where policyholders can calculate their out-of-pocket costs for procedure X at hospital Y.

But the information is for policyholders' eyes only and these insurers don't post their proprietary contracted amounts or what they pay.

"So if you have a high deductible plan or you're out of town, outside your plan's coverage area, or you need something like genetic testing that's not covered by your insurance, you have no way of knowing what you'll be charged," said Bennett.

Times are changing, however. North Carolina recently passed a law requiring hospitals and ambulatory surgery centers to disclose what they're paid for 140 medical procedures and services.

And Utah's Public Employee Health Plan (PEHP) covering state workers has started publishing its contracted prices, which could be a game-changer, said Rep. Jim Dunnigan, R-Taylorsville, an insurance broker. Unlike other private insurers, PEHP contracts with every major hospital in Utah.

"Now they just have to get the consumer engaged. We're hearing it's been modestly used, so far," said Dunnigan. "If you are on the hook for a portion of the bill, it will get your attention. If not, maybe you won't care."

kstewart@sltrib.com

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