Sigh, so many hyped developments to solve our health care spending problem, so little actual progress. Research published in JAMA explores whether consumers having the capability to compare prices for the same service from various providers results in lower health spending. (JAMA Article) Recent theory has been that if consumers have more skin in the game; i.e. lets make them pay more and more in premium share and in cost-sharing on actual services, higher deductibles and copays, then they will be more price sensitive and shop around for the best deal, kind of like buying tires for your car or getting a haircut, right, because no one views their health as any more important than those mundane tasks. So a variety of vendors and health plans have attempted to make the price, or what is more relevant, the actual out-of-pocket payment the individual consumer will pay, available for patients before they select a provider. The study population consisted of the employees of two large employers who offered such a price transparency tool, compared to matched employees at companies without such a capability.
The study looked at outpatient spending. Compared to outpatient services, which are often elective and non-acute, consumers typically have little role in selecting which hospital inpatient setting they use. Unfortunately for Truven, Castlight and their brethren, it appears that availability of the tool resulted in no reduction in spending. In fact, average outpatient spending was $2021 in the year before the tool became available and $2233 in the year after. For the control group, average spending went from $1985 to $2138. After adjusting for various characteristics, use of the tool appeared to be associated with an average $59 increase in spending. Oops, not exactly what was promised. And slightly higher average out-of-pocket spending was also associated with availability of the price transparency tool. Those with the tool available also increased their use of relatively higher priced hospital outpatient department settings.
The results may be partly explained by the fact that very few of the employees actually used the price comparison tool; after two years less than 20% of employees had logged into the tool even once. Getting people to use such capabilities requires some education and behavior change, which isn’t easy. The tools have to be very intuitive to use and present simple information in a readily understandable manner. But a bigger problem is likely that for many people, even the out-of-pocket cost is not an important factor in selecting a provider. Health and health care is an emotion-laden topic. Perceptions of quality, accurate or not, and convenience may be far more important to consumers than price. Some patients may actually seek higher priced providers in the belief that they offer better quality.