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Testimony: Real Healthcare Reform Rewards Value, Instead of Volume

Testimony before the Wyoming Joint Appropriations Committee, October 24, 2016 


Hello, Chairman Harshman, Chairman Ross, members of the committee,

My name is Charlie Katebi. I'm a policy analyst with the Wyoming Liberty Group. I’d like to thank the Department of Health for researching and bringing greater attention to Wyoming’s lack of healthcare transparency.

Patients need simple and transparent prices to find cost-effective healthcare, and they’re demanding this now more than ever.  According to a survey by the Partnership to Fight Chronic Disease, 77% percent of Wyomingites believe it’s important to have more transparency when it comes to medical costs. 

But patients also need an incentive to choose lower cost providers. Fortunately, states around the country are giving patients that incentive. Many States are partnering with a company called Smart Shopper that allows state employees to compare prices online for a variety of medical treatments.

SmartShopper then offers patients cash rewards when they choose a lower cost provider.  The larger the savings, the larger the reward.

New Hampshire recently partnered with SmartShopper to introduce these incentives into their public employee health plan. In 2015, the program saved the state $12 million in medical claims. Some of the highest savings came from Colonoscopies, Knee Surgeries, and MRI’s. I’ve submitted a report by SmartShopper that breaks down in greater details how they saved New Hampshire money.

These incentives address one of the primary cost drivers of the state employee health plan, which is how hard it is to negotiate more reasonable prices from providers. As the Employee Group Insurance Plan said at the last Appropriations meeting, 

“It’s often difficult to negotiate rates with vendors because they are often the only game in town.”

Well, in states with SmartShopper, patients leave town and travel to providers that charge lower prices, because they know they’ll be rewarded in cash for that decision.

Smartshopper now works with health plans in Kentucky, Texas, and Louisiana. Smartshopper is effectively reforming these healthcare systems by rewarding value, instead of volume. Instead of patients, providers, and insurers constantly fighting each other’s conflicting interests, everyone has an interest in better healthcare at a lower price. Cost-effective providers get more business, insurers pay cheaper claims, and patients get checks in the mail.

So in closing, I think Wyoming should consider integrating Smart Shopper’s incentives with the claims database that’s taking shape and the State Employee Health Plan to give patients greater control over their healthcare and save taxpayers money.

And I’d like to let the committee know that the Commissioner of the Kentucky Employee Health Plan is hosting a webinar on October 26 to discuss her state’s success using the SmartShopper program to reduce healthcare costs.  I’ll be happy to share that event’s details with anyone that interested.  

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