“Location, location, location."

We’ve all heard this familiar real estate industry mantra a million times and know exactly what it means: That where a house is located is the #1 factor in determining its price and value. Well in many ways, the same holds true for healthcare. Where care is administered (i.e., hospital vs. non-hospital setting) matters big time when it comes to cost and, in some cases, quality. To illustrate this point, here are just three examples of how sizeable the cost differential can be:

Source: BCBSRI Claims Data

Pretty dramatic, right? That’s why BCBSRI continues to work closely with provider and vendor partners who share our commitment to supporting and advancing the triple aim of enhancing the patient experience, improving outcomes and controlling costs, which means providing the right care at the right time and—in the right place.

Examples of the latter include eviCore’s “Smart Choice” program (which offers members a lower site-of-service cost for specialty imaging); orthopedists considering ambulatory surgery centers instead of hospitals for joint replacements; and providers, when appropriate, giving regular infusions of medications for acute and chronic conditions at ambulatory infusion suites or sometimes right in the patient’s home.

With more and more experience, some procedures that used to require in-patient stays of several days are now being done safely and cost-effectively with patients being watched or observed for less than a day. Many hospitals are taking steps to do just that with knee replacement surgeries. In those cases where patients are only kept under observation after surgeries, doctors rely on home health teams or rehabilitation facilities to help patients fully recover. Given the alternative of recovering in one’s own home, healthy people undergoing low-risk surgeries can look forward to this level of comfort and peace of mind.

Back in the day, most of the examples I referenced would be thought of as things happening “only in a hospital.” But this is not the case anymore. I encourage you to explore and weigh the benefits of outpatient services the next time you are considering the proper setting to administer your patient’s care.

Also, talk with your patients about why it’s important for them to be knowledgeable healthcare consumers and to understand things like site-of-service payment differentials—especially for those members who have higher cost shares. Remind them that asking if there are less-expensive tests, treatments or procedures; knowing what their insurance may cover; and being mindful that choosing generic drugs instead of brand-name drugs (when appropriate) can all help lower costs for them—and, in turn, make overall healthcare a little more affordable, too, if enough folks follow their lead.

Thanks in advance for your cooperation, and for your ongoing commitment to improving the health of our members.