Tech Tools Aim To Drive Down Health Costs In N.H.

May 7, 2015

An exam room at Derry Imaging in Derry, NH.
Credit Jack Rodolico

Healthcare reform has brought lots of changes, but here’s what hasn’t changed: healthcare is still expensive, and the price tag is still rising.

Mark Galvin founded of a string of tech companies on the Seacoast. And he says one thing has dampened all their prospects: the crushing cost of healthcare.

"Every time I went to start a new company, it went from being kind of a nonissue, to a little bit of an issue, to a bigger issue, to a giant issue," says Galvin.

So Galvin wondered: Could you drive down the cost of healthcare in New Hampshire by helping consumers shop for the lowest price - by creating a sort of Travelocity or Amazon for healthcare?

Apples to apples

There are lots of obstacles here, but if Galvin could crack the code, it would be a big deal for people like Dave DeBronkart.

"I was diagnosed in 2007 as almost dead with stage four kidney cancer," says DeBronkart. "I love good medicine because I was saved by it."

I mean I was astounded, and I kept finding that when I actually got the bill, there were a whole bunch of things that nobody had told me about. I cannot imagine anything being more crooked. - Dave DeBronkart, Healthcare Transparency Advocate

And since being saved, DeBrokart, who lives in Nashua, has become an evangelist. He lectures around the world about healthcare transparency.

"I mean I was astounded," he says, "and I kept finding that when I actually got the bill, there were a whole bunch of things that nobody had told me about. You know, and I mean I can’t imagine anything being more crooked."

This maze of problems - no listed prices, misleading prices, hidden prices - it’s well documented. What’s new though is that rising deductibles are forcing people to spend thousands out of pocket – that’s on top of monthly premiums – before their insurance company pays a penny.

Tom Harte, the owner of Landmark Benefits in Hampstead, says more and more clients are coming to him and saying, "Oh my gosh, I wish I had that tool available to me last month when I needed to have my MRI. They will find that they spent a lot more money out of their pocket simply because they didn’t log onto an app or go onto a website to find out where they can save money."

As it turns out, a chest X-ray could cost $600 at some of the state’s hospitals – or as little as $50 elsewhere.

Ken Magilton, a stenographer at Derry Imaging, showed me some images of a person’s heart during a stress test.

"So we’re able to look at the actual walls of the heart," says Magilton. "If there’s an area of weakness it will be apparent when we look at these images."

Derry Imaging promotes its low prices. It runs radio ads, posts prices right on its website. But how would you know it was cheap if you don’t know what other providers charge?

Big savings

That brings us back to Mark Galvin. His latest venture is My Medical Shopper.

In New Hampshire the state tracks every cent private insurance pays doctors and hospitals. Galvin’s team runs this data through an algorithm. You type your procedure into the app or website and the program ranks providers around the state by price and quality.

Galvin says in N.H. in 2013 - when you look at the 100 most common procedures billed to private insurance - those procedures cost $466 million.

So Galvin and his cofounder jiggered the numbers. They found if everyone had shopped for the cheapest procedure, we would have saved 26 percent. And he said to himself, "Wow! It’s unbelievable you can get a 26 percent savings just by shopping off this."

So 26 percent? Big savings, right? But then, he had an epiphany.

"Literally I woke up in the middle of the night that night and I went, 'Oh my word. We did the ratio upside down,'” says Galvin.

Well what about those healthcare facilities that are charging the 500 percent more? Are those charges going to start coming down? - Tom Harte, President, Landmark Benefits

In fact, buying the cheapest procedures wouldn’t have saved New Hampshire 26 percent. It would have saved 74 percent.

"It was so dramatic, the 74 percent, looking at the sheet of paper you just automatically flipped the ratio because it’s just so unbelievable," Galvin laughs, "that it’s a 74 percent savings!"

It remains to be seen if this app and its competitors can actually drive patients to cheaper providers - and more importantly, says Tom Harte, if that competition will be a wakeup call to the expensive providers.

"Well what about those healthcare facilities that are charging the 500 percent more – are those charges going to start coming down?" asks Harte.

Dave DeBronkart answers that question with another question.

"When consumers have the ability to know in advance what something is going to cost," says DeBronkart, "they will act. No question. Who in their right mind wouldn’t?"