Anthem BCBS Expands Transparency Tool to Cincinnati, Lexington, Louisville and all of Indiana

After a successful launch in Dayton, Ohio, Anthem Blue Cross and Blue Shield, a WellPoint (Indianapolis) company, will expand its transparency tool pilot program to new markets, a move that reflects the growing consumer-directed healthcare trend. The program leverages Anthem's claims-paid information to provide customers who visit the Anthem Web site with cost information regarding nearly 40 common medical procedures. On May 1, the program launched in Cincinnati; Lexington and Louisville, Ky.; and the state of Indiana.

"Transparency is an important part of healthcare," says Ken Goulet, president and CEO of Anthem's national accounts business (which accounts for 11 million of Wellpoint's 35 million members). "We will get much more informed consumers and much more involved consumers and patients in the months and years to come."

The cost estimates provided on Anthem's Web site are all-inclusive, according to Goulet, who likens the concept to purchasing a car -- rather than looking at the price for each part, a customer prefers to see the bottom-line cost. "Instead of providing specific line-item costs for a procedure, it groups all costs together for a service, including hospital fee, lab work, anesthesia, recovery room, etc.," he explains.

The rationale behind the project may be indicative of an evolving dynamic between customers and their health plans. "The business drivers were consistent with what, I think, many in the industry feel -- that we, as consumers, have become less sensitized to buying services and aren't able to do true comparison shopping on where we get services based on quality and cost," Goulet says. "[Anthem] wanted to be able to provide information that someone could look up and [use to] make an informed choice."

Consumer Savings

Anthem hopes to win competitive differentiation when consumers realize real cost savings by using the tool, Goulet relates. For example, he explains, the medical costs associated with childbirth can range from $5,500 to $7,000 in Indiana. "Given that a common co-pay is probably 20 percent, a $1,500 difference gets to be a reasonable amount of money to influence someone's choice," he asserts.

Goulet also sees a growing demand for transparency. "It's a requirement to have some form of transparency because it's being expected from the largest employers," he says. In the future, Anthem -- which has devoted a specific area of its business to transparency and innovation -- will roll out additional tools, such as a Zagat-like rating system for procedures, Goulet adds.

The program debuted in Dayton last September, in cooperation with General Motors, one of Anthem's largest employer groups. Goulet says that 84 percent of users have described the tool as "extremely useful." After collecting and analyzing data regarding the impact on consumer spending, Anthem could expand the program further in 2008, he notes.

--Nathan Conz