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Rewards for patients to switch care

Harvard Pilgrim plan seeks to reduce costs

Richard C. Lord, the president of Associated Industries of Massachusetts, said, ‘We’ve been talking about getting consumers more engaged in making their own health care decisions.’ Richard C. Lord, the president of Associated Industries of Massachusetts, said, ‘We’ve been talking about getting consumers more engaged in making their own health care decisions.’
By Robert Weisman
Globe Staff / December 20, 2011
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Told they need a routine medical test, such as a colonoscopy or a mammogram, most patients go wherever the doctor recommends. But under a program being rolled out next month by Harvard Pilgrim Health Care, they could be paid to seek care somewhere else.

The health insurer plans to introduce a rewards program through which its Massachusetts members who have been given referrals will be asked to call a “clinical concierge’’ service that can direct them to hospitals or medical facilities that charge less for the same tests.

In return, they will receive a check from Harvard Pilgrim, ranging from $10 to $75.

The program, called SaveOn, is intended to help patients make smarter health care choices, according to Harvard Pilgrim, and to rein in the runaway prices of imaging tests and other procedures that have contributed to steadily rising premiums.

“It’s the kind of decision patients aren’t making today because they don’t have the information,’’ said Eric H. Schultz, chief executive of Harvard Pilgrim, the state’s second-largest health insurer. “Doctors are still referring patients for diagnostics based on the way they’ve always done it, without regard for the cost. But we can’t sit around and accept behavior that drives costs up with little or no impact on quality.’’

By throwing down the gauntlet before the state’s powerful medical care providers, Schultz said Wellesley-based Harvard Pilgrim is responding to the demands of financially pressed customers and Patrick administration officials, who have called on insurers to create incentives to contain the escalating price of care.

But some doctors are skeptical of anything that would take away from them decisions about where to refer patients.

They say they are in the best position to vouch for the quality of medical test providers and have longstanding relationships with testing companies that get them data quickly and accurately.

“I do have concerns about this,’’ said Dr. Rick Lopez, a primary care internist and chief medical officer of Newton’s Atrius Health, an alliance of six community-based doctors groups, including Harvard Vanguard Medical Associates.

“When I refer a patient for a test or an imaging, I’m taking into account what the patient needs and I’m referring the patient to a place where there’s quality. And I know that from experience.’’

Lopez also noted that if something goes wrong with a patient’s care, “The doctors are liable.’’

Insurers have been pushing to slow the rate of cost increases in recent years, both through products they offer and the ways they reimburse doctors and hospitals.

Several carriers, including Harvard Pilgrim, have been negotiating so-called global payments, which give providers annual budgets to cover patient care instead of paying providers for every visit, test, and procedure.

On the customer side, health insurers have been selling employer groups limited-network plans, which restrict which providers patients can see, and tiered-network plans, which require them to pay more to visit higher-priced physicians or medical centers.

But SaveOn, which has already been introduced as a pilot on a limited scale in New Hampshire, will be the first in Massachusetts structured as a rewards program, similar to those offered by online retailers for shopping at their stores.

Harvard Pilgrim officials are expected to meet this week with regulators from the state Division of Insurance, which must approve the program before it can be marketed as an add-on to the insurance products the company sells to businesses and other employers.

“Conceptually, it’s a move in the right direction,’’ said Richard C. Lord, president of Associated Industries of Massachusetts, a trade group representing 6,000 businesses. “We’ve been talking about getting consumers more engaged in making their own health care decisions. Up until now, there’s been no incentive to a consumer to shop around.’’

The role of employers in educating their workers will be key to the adoption of SaveOn because employers typically pick up the largest share of health insurance costs.

But if the program succeeds in moderating reimbursements for everything from MRIs and CT scans to ultrasounds and sleep studies, employers will probably want their own financial reward.

“Ultimately, the savings should be reflected in premiums employers pay,’’ Lord said.

While consumers are often unaware of the costs of tests and procedures because their insurers are billed, soaring premiums have forced many employers to redesign policies with higher deductibles and co-pays, meaning individuals are paying more on their own.

Switching to lower-cost test and imaging services recommended by Harvard Pilgrim’s concierge subcontractor, Tandem Care of Manchester, N.H., could reduce those out-of-pocket expenses, Harvard Pilgrim executives said.

The company said bills for procedures vary widely, depending on where they are performed.

For instance, potential savings on colonoscopies can total $1,700 per procedure, they said, while the price variation for mammograms is sometimes as much as $285.

Two reports from Attorney General Martha Coakley over the past two years have documented disparities in what hospitals and doctors are paid by insurers for the same services.

Several of Boston’s Harvard-affiliated teaching hospitals and hospitals with geographic monopolies have been among the highest paid.

Lower-priced providers, including community hospitals in competitive markets, have called for more openness on pricing.

“This is pretty positive,’’ Donald J. Thieme, executive director of the Massachusetts Council of Community Hospitals, said of the SaveOn program.

“It contributes to transparency, which we would hope for. It helps consumers to make rational decisions,’’ he said.

Harvard Pilgrim’s Schultz said he hopes SaveOn will help the insurer sell products and gain market share while driving down health care costs, one procedure at a time.

“This becomes a conversation at the watering hole - ‘I just got a check for $75,’ ’’ he said.

Robert Weisman can be reached at weisman@globe.com.

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