October 23, 2014 / 9:20 PM / in 4 years

Knowing prices tied to lower healthcare spending

By Andrew M. Seaman

NEW YORK (Reuters Health) - People who search and compare the prices of common healthcare services tend to spend a bit less than people who don’t, according to a new study.

The overall amount of money people and their employers spent on office visits, laboratory services and imaging tests was between $1 and $125 less than normal when they looked up the prices ahead of time, researchers found.

“It makes sense,” said the study’s lead author Christopher Whaley, from the University of California, Berkeley. “If you give them the information on services, they respond to it.”

He and his colleagues write in JAMA that people are paying a bit more of their own healthcare costs after recent changes to the U.S. healthcare insurance market.

“As patients have an increasing responsibility to pay for their care, they will likely demand access to prices charged for their care,” they write.

Several state and federal initiatives encourage or require greater access to healthcare prices in hopes that it would reduce overall costs. But few studies have looked at the possible effects of so-called price transparency.

For the new study, Whaley and his coauthors used data from over 500,000 people who were insured through 18 self-insured private companies. The employees had access to healthcare prices over the Internet, mobile devices and by telephone through a service known as Castlight Health.

Whaley and several of the study’s other authors are employed by Castlight.

For office visits, laboratory services and imaging tests, the researchers looked to see whether patients’ searches for prices made a difference to the total amount the patient and employer ultimately paid.

The study involved 253,757 households altogether. Of those households, 7,485 searched for prices on laboratory services, 2,148 for imaging tests and 51,481 for office visits.

They found that about 6 percent of laboratory searches matched a service received, as did about 7 percent of imaging tests and 27 percent of office visits.

Compared to people who didn’t search for the healthcare services they received, those who did spent about 14 percent less on laboratory services, 13 percent less on imaging tests and about 1 percent less on office visits.

Those differences represent an average of $1.18 for office visits, $124.74 for imaging tests and $3.45 for laboratory services.

While the differences may appear small, relative to overall healthcare spending, the study’s senior author said the savings could add up.

The U.S. spends about $30 billion every year on laboratory and imaging tests, said Neeraj Sood of the University of Southern California’s Schaeffer Center in Los Angeles. “If you reduce that by 10 percent, that’s a lot of money.”

He added that the study also found people were spending less even if they had reached their deductable and had to pay little or no out-of-pocket fees.

“It’s a good example to people who have to bear the cost of this care out of their own pocket that there is potential savings out there,” said Dr. Ateev Mehrotra.

Mehrotra was not involved with the new study, but is an expert in healthcare consumerism at Harvard Medical School in Boston.

The researchers can’t say why people who searched for the prices of healthcare services ended up spending a bit less – even if it only meant a few dollars difference.

It could be that the less-expensive services were also provided by the highest quality doctors and facilities, they write. Alternatively, people may assume the savings would accumulate over time.

“It’s a demonstration for me that people who are using the Castlight tool will search for providers and switch providers – more so for laboratory tests than providers,” Mehrotra said.

The researchers say they can’t project what long-term effects this type of open market will have on healthcare use and overall spending.

For example, people may decide to forego healthcare services if they feel all costs are too high. Letting illnesses and conditions worsen may ultimately lead to higher costs later on. People who find cheaper services may also increase the number of healthcare services they use, which would also increase spending.

“The study didn’t look at utilization of care. . . That’s something we plan to look at over the next two to three years,” Sood said.

Uwe Reinhardt, an expert in healthcare economics at Princeton University in New Jersey, also noted in an editorial accompanying the new study that comparing the costs of procedures only works if people have a choice between healthcare providers.

“If you have a place where there is only one provider or one hospital and you essentially only have one choice, the comparison is not possible,” Whaley said.

He added that another analysis to be published at a later date will examine whether the cost comparisons are tied to providers offering competing prices.

SOURCE: bit.ly/1wrNeJ7 and bit.ly/1sdIXoq JAMA, online October 21, 2014.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below