Bloomberg News

UnitedHealth Leads Plan to Reveal Health Prices to Consumers (1)

May 14, 2014

UnitedHealth Group (UNH:US) Inc., the largest U.S. health insurer, will lead an industry effort to throw a spotlight on the prices paid for health-care services, making their costs available to consumers on the Internet.

The effort, announced today and organized by a nonprofit called the Health Care Cost Institute, builds on steps the Obama administration has taken to shed light on prices charged by health-care providers. Medicare, the program for the elderly and disabled, released databases in 2013 and this year that revealed what it paid hospitals and physicians, over the objections of both industries.

The new initiative is more constrained, offering consumers a “reference price” for health services in their communities, based on aggregated data from insurers, said David Newman, the executive director of the Washington-based institute. Customers of the insurers will get more precise information about prices, including how much they’ll have to pay out of pocket.

“The public has been clamoring for this,” Newman said in a telephone interview. “This was the next natural step for us as an institute to evolve to.”

Because the insurers’ data is proprietary and “commercially sensitive,” he said, there will be limits on how the public can use it. Unlike the Medicare data, for example, consumers won’t be able to see how much in total an individual insurer paid a specific doctor, hospital or other provider, or download all of an insurer’s payment data.

Newman said the service is expected to be available in the first quarter of 2015.

Mission Expansion

The plan expands the mission of the institute, set up in 2011 to make data on private insurers’ costs available to researchers who had long been frustrated that most information available on health-care prices came only from government programs.

UnitedHealth, Aetna Inc. (AET:US) and Humana Inc. (HUM:US) will participate in the consumer program. The three companies, along with Kaiser Permanente, the large nonprofit based in Oakland, California, were original partners in the institute, agreeing to share information with researchers covering about 5 billion individual medical claims and $1 trillion in spending.

“We’re looking to reorient the health-care system around the consumer and we see this as another step in that process,” Ethan Slavin, a spokesman for Aetna, said in a phone interview.

Kaiser, which owns its own hospitals and employs its own physicians, is not a participant in the new effort. At least two other insurers that the institute approached, Cigna Corp. and WellPoint Inc., declined to be involved, spokesmen for the insurers said.

“While we fully support the concept of price and quality transparency for the industry, we weren’t able to get answers about the governance and operating costs of HCCI,” Jon Sandberg, a Cigna spokesman, said in an e-mail. Until the company has “full details” on those issues, he said, “we will not be participating.”

The cost institute said it planned to combine details on commercial payments to health providers with data from the insurers’ Medicare and Medicaid plans, where possible. Data from other insurers and from the government-run Medicare and Medicaid programs may be added later, the institute said.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net Bruce Rule


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Companies Mentioned

  • UNH
    (UnitedHealth Group Inc)
    • $85.12 USD
    • 0.88
    • 1.03%
  • AET
    (Aetna Inc)
    • $80.1 USD
    • 1.15
    • 1.44%
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