- The Maine Wire - https://www.themainewire.com -

‘Right to Shop’ a win-win for consumers and insurers

Disparities in medical prices in Maine are enormous. If you have insurance through Anthem, for instance, the cost of a hip replacement at EMMC is $39,000. At St. Joseph s Hospital, a hip replacement costs only $29,000 – $10,000 cheaper, with very similar quality ratings. Yet too often, patients are completely unaware of a lower-cost alternative available nearby.

LD 445, or “Right to Shop,” sponsored by Sen. Rod Whittemore, R-Somerset, is designed to highlight these disparities and transform Maine’s health care market by empowering patients to be informed, discerning consumers when selecting a medical provider.

Under this bill, if a patient receives care for less than the average cost to their insurance company, the patient and the insurance company split the savings. In other words, if a patient receives less expensive treatment from an out-of-network health care provider, then the costs incurred by the patient are applied towards their insurance deductible, as if it was an in-network provider.

That’s a win-win outcome, and will reward efficient, low-cost health providers by driving more patients to their doors. It requires healthcare entities to establish shared savings incentive programs by 2018 and to notify their patients of their right to shop for services.

Right to Shop would benefit Maine’s critical access hospitals that have struggled to attract enough patients to remain financially viable. The widespread perception that these rural hospitals are more expensive and less safe than urban facilities is simply not true.

A study in 2015 revealed that several of Maine’s rural hospitals rank among the best in the country, offering high-quality, cost effective care. In many cases, these smaller, independent facilities offer services at lower costs than what insurers recommend. Because a third party often picks up the tab for service, consumers accept this recommendation with little knowledge of what local alternatives are available to them, as there is no incentive to shop around.

This means the cheaper services are likely outside of your insurance network, but you would not know, as insurers often press patients to receive care at more expensive facilities within their network. These are the same providers that oppose Right to Shop legislation.

An analysis by The Maine Heritage Policy Center of price data for the 20 most common procedures in Maine found that rural hospitals, on average, actually charge less than urban providers. A resident of Bangor in need of a c-section might naturally go to EMMC. But Waldo County General Hospital, less than an hour away, offers the same procedure for $20,000 instead of $26,000.

A colonoscopy at St. Mary’s in Lewiston costs $4,100, but Stephens Memorial Hospital in Norway – just a 40 minute drive away – charges only $1,700. Plus, Stephens Memorial Hospital has better patient satisfaction ratings. These are just two of countless examples of small, rural hospitals out-performing their large competitors on price and quality.

Maine’s rural hospitals disproportionately serve Medicaid and Medicare patients, as well as the uninsured. To remain financially viable, they must attract more privately-insured patients. Right to Shop legislation rewards patients by incentivizing them to find high-quality, low-cost alternatives at these facilities.

This bill gives them a chance to market themselves to a broader patient base and capitalize on their competitive prices and outstanding quality of care. It also enables patients to save money on healthcare by shopping around for services. This competition in the market will level the playing field and drive down costs across the board.

Take action today by contacting members of the Insurance and Financial Services Committee in support of LD 445, the Right to Shop for cheaper healthcare services in Maine.