Price-Shopping in Health Care

By September 22, 2017 Commentary

Confirming other recent research showing limited use of health care price transparency and comparison tools, a study published in Health Affairs uses survey data to ascertain consumers’ views of these capabilities.   (HA Article)   Two facts should drive more interest in and use of such tools.  One is the increase in consumer cost-sharing in private health plans, including very high deductibles.  The second is that there is wide variation in prices charged by providers in a particular geographic region.  Because of these issues, many health plans and large self-funded employers make price transparency and comparison data and software available to consumers for free.  Regulators have also taken some actions to aid to creating greater awareness of provider prices.  A big inhibitor in use of the tools, or at least in following the data by going to the lowest-cost clinician, is that patients are often satisfied with a current provider and reluctant to switch.  The researchers in this study used a survey of about 1900 adults aged 18 to 64.  People who were uninsured or in a high-deductible plan were over-sampled, since they should be most motivated to price-shop.  Price-shopping was divided into a series of discrete activities, such price awareness, price searching and price comparing.

52% said they were aware of the price before they got care and 13% had searched for their actual expected out-of-pocket expense.  Ten percent said they considered going to another provider, but only 3% had actually compared prices across clinicians.  Among the 13% who tried to ascertain their exact share of the cost, 63% contacted their provider for the data, 15% used a health plan or employer website and 9% called the health plan.  Interestingly, people with a deductible were less likely to be aware of their out-of-pocket amount than people without one.  It could be that under a high-deductible plan people just assume they are paying the full cost.  African-Americans were more likely to be aware of out-of-pocket spending than Caucasians and Hispanics were the least aware.  In terms of service type, price awareness was highest for physical therapy, lab tests and surgery center procedures.  72% of the respondents said that they thought patients being aware of prices and comparing them was a good thing.  In contrast to some other research, only 22% of these respondents said it was likely that higher cost providers were also higher quality.  75% said they were unaware of a resource that would help them compare prices, which indicates that health plans and employers can do a better job of educating members, as the tools are almost universally available now.  Patients with an existing provider relationship were less likely to engage in price-shopping.  Lack of provider choice under a plan was also cited as a reason for not price-shopping by some respondents.  The survey suggests that price-shopping is of interest to health care consumers, but there is work to do both on helping them identify and use tools and on taking action based on data.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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