While people could save on their out-of-pocket costs for medical procedures by using online healthcare price transparency tools, they still don’t use them. Why?
Healthcare economist Austin Frakt published an article in the December 19, 2016 issue of The New York Times entitled, “Price Transparency Is Nice. Just Don’t Expect It to Cut Health Costs,” that explores this issue.
According to Frakt, the shortcomings of online websites that expose local variation of in-network commercial include:
- A study of the Truven Treatment Cost Calculator showed that “price transparency did not reduce outpatient spending, even among patients with higher deductibles…”
- Only 2 percent of many health plan enrollees ever use insurance carrier online price transparency websites.
- Only 3.5 percent of Aetna’s enrollees use its online price transparency website.
It’s clear that healthcare price transparency websites don’t lower medical costs because so few people use them — and even those who use them, don’t act on the information to select lower cost doctors and hospitals.Healthcare price transparency websites don’t lower medical costs because so few people use them Click To Tweet
The article provides several reasons why:
- Healthcare decisions are driven by physician referrals
- The process of “price-shopping” is too complex
- Only 40 percent of healthcare can be “shopped” for
- Consumers think higher costs equal higher quality (the article cites that this is often NOT the case)
We created Compass nine years ago because we knew people needed personalized guidance to help them navigate the complicated healthcare landscape. Our experience providing people with price transparency solutions has given us insight into this issue, such as:
- Greater Utilization: Healthcare price transparency information is used by a greater number of employees (15 percent to 45 percent) when it is delivered in conjunction with health system navigation support and concierge services (such as coordinating care among different doctors, scheduling appointments and resolving problem bills).
- Able to Take Action: A personal healthcare concierge, like a Compass Health Pro consultant, makes it easier for people to use healthcare price transparency information. The strategy is to make it simpler for people to select a lower cost healthcare provider. Compass’ services were designed to address the administrative complexities of healthcare and lower that threshold.
There’s a paradox to the effectiveness of online price transparency tools:
- Healthcare price transparency websites on their own DO NOT lower health costs.
- At the same time, healthcare price transparency tools implemented in the appropriate fashion DO lower health costs.
It’s important to note that healthcare price transparency should still not be considered a silver-bullet in lowering medical costs. Alone, it does not solve the problem. However, it does work if you apply the following synergistic strategies:
- Implementing a consumer-directed health plan
- Providing healthcare navigation tools that go beyond just price and quality transparency
- Increasing the utilization of primary care over specialty care
- Identifying and treating disease earlier through screening, lifestyle modification and medical intervention
To learn more:
- Read Compass blog: Price Isn’t an Effective Tool to Determine Healthcare Quality
- Read Compass blog: Health Activation vs. Engagement: What is the Difference? Does Activation Affect Healthcare Cost & Quality?
To learn more about Compass and our 2,000+ clients, visit www.compassphs.com.