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Consumers and Health Price Transparency Tools

By July 13, 2017Commentary

One key attempt to limit health spending growth has been to “empower” consumers by encouraging them to think about how they receive health care to shop for it in a more formal process, supported by data on cost and quality.  To support this effort, many health plans and employers have made portals and other software tools available to consumers to help them compare the price of a service from different providers, in some cases including an analysis of what the consumer would pay out-of-pocket under his or her specific benefit plan.  Research to date has suggested that consumers don’t use these tools much even when they are easily available and that they appear to have little impact on spending.  To garner more information on why consumers were or weren’t using a price transparency tool, researchers interviewed a number of members covered by the CalPERS health plan.  These members had a modest cost-sharing benefit design and should have had some motivation to use the tool made available to them.  The results were published in the American Journal of Managed Care.   (AJMC Article)   The tool used, provided by Castlight, gave real-time estimates of not only the provider price but of the specific out-of-pocket cost for the patient.  Quality data was also displayed when available.  CalPERS engaged in a campaign to encourage use of the tool and four months after introduction, 23% of members had registered for its use.  This study interviewed 39 members, some who did and some who didn’t use the price transparency capability.

Most respondents expressed general frustration with the cost of health care and most, whether they used the tool or not, were aware of health spending and tracked deductible use.  While most respondents had a positive reaction to the concept of price shopping, some said that cost should not matter when it came to health.  One spur to actual use of the price shopping tool was a major, costly health care event.  Reasons reported for limited use of the tool included unfamiliarity with pricing in health care; a perception that differences in provider prices would not affect what the patient paid, since they were past their deductible or copays were a flat dollar amount regardless of provider used; and living in an area where there were few providers to choose from.  Loyalty to current providers was a strong barrier to use, as was reliance on primary care physician referrals when using specialists or having tests.  Some respondents invoked the usual “quality costs more” belief, but some (rightly) perceived that there was often little relationship between what a doctor charged and the quality of care.  Those respondents who did use the tool did not rely on it exclusively, but as just one input to decision-making.  Testing was the most common service for which the tool was used.  Most respondents would not use it if they were looking for a new primary care physician.  A number of participants did say they found the tool useful for record-keeping and for identifying if a provider was in-network.

None of these results should be surprising if we just reflect on our own personal approach to health care.  Health issues are highly emotional.  Trust in a provider will always be more important than impersonal cost data.  Most people feel, and probably are, incapable of understanding and using complex pricing and cost-sharing data.  And a bigger problem is patients’ difficulty in articulating what quality is and how to measure and compare that.  To many, quality may simply be being treat with empathy and consideration, or being seen on time.  Understanding real outcomes is hard even for researchers.  If we want to improve consumer engagement with the hopes of reducing spending, we are probably looking in the wrong place.  But a good starting point would be spending more time helping patients understand the dimensions of quality and how to evaluate that.  Better outcomes are what everyone should want.

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