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Steerage and Price Transparency in Radiology

Table of Contents

What is Steerage?

• The use of financial incentives to motivate patients to use preferred providers is known as “channeling,” “referring,” or “steerage.“
• Efforts most often are in the form of financial incentives, and range in terms of aggressiveness.
• Steerage of patients may be accomplished by payers themselves or through a surrogate such as a radiology benefits manager (RBM)


How to Payers Get discounts

• What does the payer have to offer a provider in exchange for a deep discount?
• The answer is, simply, patients for the clinical practice—what the heathcare industry refers to as “steerage.”
• In theory a carrier/health insurance company approaches a provider (facility or physician) and offers a volume of customers—its members—in lieu of discounts passed on to those members.


Mechanism of Steerage

• How does it happen?
• Varying co-pays and deductibles for some providers over others which steers patients in one direction
• Increased administrative red tape to obtain precertification at some centers compared to others
• Financial incentives such as gift cards given by health insurance carriers to patients to use some centers over others
• Increased cost transparency provided to patients when they need their radiology exam


Steerage and Radiology Benefit Managers

• When our professional consultation is complete, (our RBM) further assists physicians or their staff in finding the most cost-effective, high-quality radiology facility closest to the patient’s home.
• The steerage service leverages (our) network development program which identifies, recontracts, tracks, and reevaluates high-quality yet economical imaging providers over time


Steerage Options from an RBM

• As part of the consultation process, we can steer and schedule appropriate tests at facilities that meet the needs of patients
and the cost-quality criteria of healthplan partners.
• There are varying levels of steerage available to meet healthplans’ individual needs – from passive to more strict


How Frequent is Radiology Steerage?

• “Though traditionally patients have received imaging services from the programs they are referred to by their personal physicians, price sensitivity has begun to proliferate, with patients being steered to lower cost providers by payers and RBMs. Stories of imaging price steerage continue to surface, with no signs of lessening.”

What is Passive Steerage?

Price Transparency Solely

Description of Company Providing Specific Cost Information:

• (This company) brings comparison shopping to the healthcare market. The healthcare shopping app, which is provided to consumers by employers and health insurers, incorporates information from a patient’s healthcare plan and helps locate doctors and hospitals available under the plan.
• (The app) details out-of-pocket costs for each provider and gives information on the providers’ specialty, board certifications, and ratings from other patients.

Price Differentials Described

• “(Our company) has uncovered massive price variations in medical services from providers within single health plans and specific geographic locations.”
• “Most of us expect that when we pay more for something, we get more, but there is no correlation between the cost of medical services and the quality of care.”

More Specific Price Transparency









Comparing Physicians / Facilities










Radiology Imaging Shopper

• (One payer) seeks to close (the) information gap for its…members with a new program called the Radiology Imaging Shopper.
• When a patient is referred for a radiology procedure, he or she receives a call about a lower cost alternative.
• Since patient co-pays are often based on a percentage of the total cost of the procedure, choosing a lower-cost provider can save the patient money.

More Active Price Data / Smart Shopper

• (Another Payer) is using Smart Shopper. When physicians request approval for an imaging procedure, (a subsidiary of the payer) will contact the physician to recommend cheaper options with similar ratings on quality measures. If the physician’s office does not change their recommendation, (the payer) will contact the patient directly.

More Active Price Steerage

• “While most patients go to a location (for imaging) recommended by their physician, they may not realize that their share of the expense will vary, depending on where they receive imaging service(s).
• In addition, according to feedback from our members, most are open to receiving quality and cost information if it can help them on their cost share.”

Active Price Steerage

• As a result, when (we the payer) receive preauthorization requests for certain MRI, MRA, CT and/or CTA services, members will be called and given information so
they understand the choices available to them.


Aggressive Steerage

• (A group of health care providers) is suing the nation’s third-largest health insurer with about 18 million members nationwide.
• The suit alleges that the insurer illegally threatens doctors and patients who want to use out-of-network medical providers and then cancels the contracts of some physicians who persist in those referrals.


Does Steerage Work?

From the payers perspective, YES

Success From Steerage

• In the first four months of the (price transparency) pilot, (the payer) found that patients were redirected to less expensive (imaging) providers 11% of the time

Even Without Active Steerage Price Transparency is Coming to Radiology


Fair Price Information





Advice to Consumers





MRI Abdomen: BlueBook “Fair Price”










CT Abd / Pelvis Healthcare Blue Book “Fair Price”








• Price transparency is gradually increasing and likely is here to stay
• Steerage based on price is likely to increase, and this steerage can vary in its aggressiveness


What can we do?

Option 1: Compete Solely on Price

• “Welcome to the world of price wars, the business equivalent of mutually assured destruction.”
•“It’s death by a million price cuts — undermining your brand while denying yourself profits at the same time.”

Too Low Prices Unsustainable
• “ (Healthcare provider)..rates must reflect the true costs of delivering care plus a modest profit or the health care market will collapse.”

Why Not Just Compete On Price?
• “(D)eep discounts are…required of providers to maintain their inclusion in the network.
• As a result, providers have to raise the “retail” cost of care to offset the discounts offered, since the discounts are not overcome by the volume and steerage expected.

What Can We Do?
We Must Look for Ways To Compete in Areas Other Than Price

Five Ways to Compete in Areas Other Than Price / BUSINESS

• A wider range of products/varieties/models
• A well known company/organization that’s
a customer
• A personal approach to customer service
• A reward points program
• Constant, informative communication

De-Commoditizing Radiology

• Of course the business world is not entirely translatable to healthcare.
• But……
• How do we de-commoditize our practice so that we can compete in areas other than price?

Let’s Focus A Little on Options 1, 3, and 5More Products

Superb Customer Experience
Constant Ongoing Communication

Option 1: More Products

• Niche marketing and products in radiology:
• MR enterography for younger patients with inflammatory bowel disease
Uterine fibroid embolization
• Abdominal wall CT angiography prior to muscular flap in patients needing reconstructive surgery after mastectomy

• Each year, CCFA’s more than 40 local chapters hold more than 300 support groups, where patients and family members can connect to others living with these diseases.
• Support group meetings are often intimate gatherings where patients and their loved ones can share their stories, seek emotional support, find answers to their questions, and connect with a community who share their challenges.

Option 3: Superb Customer Service

• Fred Lee: The Hotel Analogy:
• “After receiving an evaluation of a hotel I stayed at for several days…I think back and remember nothing special and nothing bad…Everyone was polite, my room was clean, everything worked. What would I put on the survey? Probably … satisfied…..Loyalty is generated by memorable things that we didn’t expect.”


Ways to Increase Patient Loyalty: Basic is Not Enough

• Meeting basic and spoken requirements is expected. Going beyond what is expected makes the patient’s experience memorable, differentiates physicians, and builds patient loyalty.


Physician – Patient Relationship Most Important Factor

• “…Interaction between the patient and the physician does more to explain patient satisfaction and loyalty than all other factors combined.”


The Subjective Nature of The Health-Care Experience

• “It’s rare that I walk away from one my family’s doctor appointments or dental visits with a good feeling. It’s not that my family is in poor health or that we’re not receiving proper treatment. Rather, it’s feeling that our health-care providers just don’t have time to care about my family.”


Working In Communication

• Of course it is not feasible to interact with every patient and also maintain productivity goals

• But what about talking to a few patients a day, or providing a contact number if patients have questions?
• What about posting information about your radiologists in the waiting room?
• What about nurses or PA’s?
• What about on-line communication of results?


Mayo Clinic Patient Survey

• “Most participating outpatients in this small pilot project wanted to read the actual radiologic reports.
• An online portal is a promising vehicle for communicating test results.
• More than 75% of our sample would have liked to have accessed a portal for their most recent radiologic test result.


Web-Based Scheduling

• Is there a way to institute web-based scheduling for certain outpatient exams?
• You can buy almost anything, plan almost any type of travel, and do a large number of financial transactions on line, at your convenience in the privacy of your own


Billing: Using the Web to Facilitate Billing Information

• “For your convenience, (our Imaging Center) offers online registration, enabling you to fill out your personal, medical and insurance information before your office visit. It saves you time, making the day of your appointment that much easier.”


Wait Times and Patient Satisfaction

• Communicating with patients about wait time and letting them know their time is valuable is key to a positive office visit.
• Keeping the patient informed about wait time may be more important than the length of the wait itself.


Wait Time Minimization

• Types of solutions to minimize the effect of long waits:
• Work spaces with internet hook-up
• Pagers to let patients know when you’re ready
• DVDs and Playrooms for children
• If the delay is unavoidable, a front-line employee should apologize and re-schedule the patient


Physician Rating Sites

• What do they rate? Other topics…..
• Facility cleanliness
• Wait time
• Perception of providers
• Do bad ratings matter?
• Do you buy products that get one star?


Option 5: Constant Ongoing Communication

• Free social networking sites already exist for hospital patients
• These sites allow patients to download photos, give updates on their health and overall experience, create links to other relevant websites, and post messages to others that sign in. Friends can communicate with patients as well.
• Could such a concept apply to a radiology imaging center? Possibly……


Conceptualizing a Radiology Website

• What if your practice had an interactive site where the following information was accessible:
• Radiation Dose
• Preparation for exam
• Description of exam
• Links to other patients open to discussing this exam with ongoing on-line discussions
• Information from radiologists about the indications of the exam


Low Price Versus Experience

• Most people who say they want a low price are really saying:
“I want what I want, but at the lowest price I can get.” That’s different than offering them the lowest price…..

Patient Experience Important As Well

• Because the absolute lowest price product or service provider might not offer them exactly what they want.


Getting Customers What They Want

• Help your customers get what they want, all day every day. Do that and you make your low price competitors irrelevant. You take them out of the game. They become someone else’s problem.


• We must understand that the environment we operate in will increasingly become more difficult.
• We have dramatically increased our efficiency in the past several years
• Customer service enhancements need to mirror our efficiency gains


The Future: 5 Influencing Healthcare

• Increased cost sharing with patients (Type of Steerage)
• Payers’ push for healthcare value
• Consumers’ desire for “on-demand” healthcare
• Growing online access to personal health information
• The prospect of increased competition among insurance companies for customers on the new state insurance exchanges.

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