The event drew little fanfare and scant attention last week, but it still rocked the healthcare world.
The headline I wrote for Forbes was an attempt to capture the full effect, but headlines are tough that way. On the one hand, you have to grab a reader quickly. On the other, headlines have to be accurate and truthful. In this day and age -- where everyone has a keyboard and a Wordpress (or LinkedIn) account -- it can be hard to separate the wheat from the chaff and too easy to discount headlines that scream "disruption." I elected to run with the popular technique of using a question as the headline:Could This Pricing Tool for Consumers Disrupt Healthcare?
The fact is -- this particular pricing tool is very disruptive -- and not for the reasons that are readily apparent. The first reaction by many was, so what? There are tons of consumer pricing tools already on the market. I highlighted three that are "consumer facing."
These are all great examples in their own right, of course (and there are many others), but they are all attempts to circumvent the mechanism that keeps true "in-network" provider pricing from becoming transparent. They're mostly designed with the fervent prayer that consumers will influence pricing by shopping with their feet.
But that's not the full effect of the new pricing tool -- by a long shot. One of the key pricing targets is the providers that Blue Cross Blue Shield of North Carolina (BCBSNC) negotiates with. In the course of one short week (since launch), one provider has already called BCBSNC to ask that its prices be lowered.
In. One. Week.
Full credit goes to BCBSNC for its bold vision. This cannot have been easy. For decades, in-network pricing (hotly negotiated between payers like BCBSNC and their various networks of providers) has been a closely guarded secret. Prices were considered proprietary -- and serious legal effort was expended to ensure their secrecy -- often including non-disclosure agreements, with serious penalties for breach.
That changed this month, and I posit it will have a profound impact on the healthcare system as a whole. Why? Because it's a Blue Cross Blue Shield organization (one of 37 around the country), and because the footprint for the Association of Blues is enormous. Not just in North Carolina (lives covered by BCBSNC equal about 40% of the population in North Carolina): The association either administers or provides health coverage for about 1/3 of the entire U.S. population (roughly 105 million Americans).
It will be hard for other Blue Cross Blue Shield plans to ignore this precedent-setting move by BCBSNC.
Will this be the impetus that forces payers to disclose in-network contract pricing more broadly? That's a big unknown, of course, but the pressure is enormous and growing. BCBSNC was the first, but I doubt it will be the last.
I ended the article on Forbes this way: "Some said this could never happen. Others said it never would. The fact is -- it just did. I'm betting other payers (every color stripe) will follow."
At the very least, the pressure of true, in-network contract pricing transparency is clearly evident... and mounting. The whole healthcare industry needs as much disruption as everyone can create. The surprise here was the source. Way to go, Big Blue!