Patients’ Views on Price Shopping and Price Transparency

The authors interviewed patients with access to a price transparency website. Despite a positive opinion of price shopping in theory, respondents reported barriers to doing so in reality.
Published Online: June 26, 2017
Hannah L. Semigran, BA; Rebecca Gourevitch, MS; Anna D. Sinaiko, PhD; David Cowling, PhD; and Ateev Mehrotra, MD, MPH
ABSTRACT

Objectives: Driven by the growth of high deductibles and price transparency initiatives, patients are being encouraged to search for prices before seeking care, yet few do so. To understand why this is the case, we interviewed individuals who were offered access to a widely used price transparency website through their employer.

Study Design: Qualitative interviews.

Methods: We interviewed individuals enrolled in a preferred provider organization product through their health plan about their experience using the price transparency tool (if they had done so), their past medical experiences, and their opinions on shopping for care. All interviews were transcribed and manually coded using a thematic coding guide.

Results: In general, respondents expressed frustration with healthcare costs and had a positive opinion of the idea of price shopping in theory, but 2 sets of barriers limited their ability to do so in reality. The first was the salience of searching for price information. For example, respondents recognized that due to their health plan benefits design, they would not save money by switching to a lower-cost provider. Second, other factors were more important than price for respondents when choosing a provider, including quality and loyalty to current providers.

Conclusions: We found a disconnect between respondents’ enthusiasm for price shopping and their reported use of a price transparency tool to shop for care. However, many did find the tool useful for other purposes, including checking their claims history. Addressing the barriers to price shopping identified by respondents can help inform ongoing and future price transparency initiatives.
Takeaway Points

Our findings provide insight on why patients are not price shopping for care despite numerous efforts to promote price transparency. These findings suggest that key barriers must be addressed in order to promote ongoing and future price transparency initiatives:

  • The idea of price shopping is not familiar to most patients. Price transparency initiatives should remind patients, at relevant times, to shop for care and services
  • The structure of current health plan benefits inhibits price shopping. Other forms of health plan benefits, such as tiered networks or reference-based pricing, may be more conducive to shopping for care.
  • Price transparency initiatives may provide value to patients beyond price shopping, including tracking claims and deductibles status. Encouraging this type of usage may increase patient engagement with price data.
Growing interest in healthcare consumerism is built on the premise that individuals should make healthcare decisions by using a combination of quality data, price information, and personal preference, just as they would when making other purchases.1,2 Prior work has studied how individuals (ie, consumers) use quality data to inform their healthcare decisions,3-6 but little qualitative research has examined how people do or do not use price data. This lack of evidence is notable in light of the recent proliferation of price transparency initiatives. Over 60 publically accessible websites hosted by state-based agencies and hospital associations are now available.7,8

Numerous employers have introduced price transparency tools to their employees,9-11 which aim to engage individuals with easily accessible price data so they can shop for low-cost providers. Estimates suggest that increased competition from such a shift in demand would drive down overall healthcare spending12-14 by up to $36 billion.15

Despite the prevalence of healthcare price transparency tools and their potential associated savings, few appear to use such tools or price shop for care.8,10,16-19 Recent research on healthcare decision making by those in high-deductible health plans (HDHPs) found that enrollees do not use price information despite the fact that their choice of lower-cost providers could reduce their out-of-pocket costs.20-23 When they do shop for care, it is often by calling their insurer or provider directly,24 which can make it difficult to compare across providers.25 In theory, online price transparency tools facilitate comparative shopping, but they have had mixed effects in practice. Some study results have shown either a modest reduction in price per service or enrollees switching to lower-cost providers, but many others have shown no effects on the prices of services that patients receive and on outpatient spending.9,10,26 One key finding throughout prior research is that individuals have not used price transparency tools as much as anticipated.9,10,26,27

The reasons for the lack of price shopping remain unclear. It is possible that individuals view healthcare decisions differently than other consumer decisions and, correspondingly, do not seek out price information. Conversely, they might be interested in using price transparency tools but face barriers to their use. To fill this gap in knowledge, we conducted a series of qualitative interviews with individuals who were offered a popular price transparency tool by their employer. Our goal was to understand respondents’ general views on price shopping, and motivations for shopping, experiences with the price transparency tool, and potential barriers to price shopping for healthcare.

METHODS

Study Population

The California Public Employees’ Retirement System (CalPERS) manages the health benefits of over 1.4 million members, including teachers, state employees, retirees, and their dependents. Of these members, roughly 200,000 are enrolled in one of its preferred provider organization (PPO) products. Those enrolled in a PPO product were given the option to enroll in an online price transparency tool starting July 1, 2014. In 2015, we interviewed a sample of the PPO members; these members had a $500 individual or $1000 family deductible, a $20 co-payment for office visits, and 20% coinsurance for outpatient facilities and surgery services for in-network providers.28 Members also faced cost sharing through a reference-based pricing benefits program that began in 2011. Under this program, the health plan paid a fixed contribution toward hip or knee replacement surgeries and select outpatient services (eg, colonoscopy) and members did not pay additional costs above their normal cost sharing if they elected to have their procedure at a preferred facility.29,30

Price Transparency Tool

CalPERS’ PPO members were offered Castlight, an online price transparency tool that provides users with information about their out-of-pocket costs for healthcare services, including office visits, procedures, imaging, and labs, at different local providers.31 All prices are specific to the user’s benefits design and provide real-time estimates that account for their deductible and out-of-pocket spending during the year. Members can also use the price transparency tool to review their claims history. For some searches, Castlight displays quality data on each provider.

CalPERS launched a consumer engagement campaign to encourage Castlight usage. Members were sent an e-mail from Castlight that invited them to open an online account and to invite other covered family members to access the tool as well. Other promotional efforts included home mailers, a 30-day lottery of iPad giveaways for employee members who created an account, live demonstrations, and additional incentives leading up to open enrollment in 2014. Continued communication with tool users included e-mail alerts when new claims information became available and monthly product updates. Four months after the introduction of the tool, 23% of eligible households had registered for the tool.

Interview Protocol

Of the roughly 200,000 PPO members who had access to the price transparency tool, CalPERS sent introductory letters to a sample of 200. We chose 200 based on an anticipated response rate with the plan to recruit more respondents if we did not saturate themes. Individuals were invited to participate in a 20-minute phone interview to discuss how they choose where to get healthcare and how price affects these decisions. If they were interested, they were asked to call or e-mail to set up an interview. We provided a $50 gift card on completion of the interview.

We were interested in talking to 3 groups of respondents: 1) those who had never used the price transparency tool, 2) those who had used it infrequently, and 3) those who had used it frequently for a sustained amount of time (defined as more than 5 log-ins over a 6-month period, with each log-in separated by at least 1 month) since the tool was introduced. CalPERS had access to administrative data on who had used the tool and how frequently, but for privacy reasons, these data were not available to the Harvard research team. In order to compensate for low rates of tool usage, CalPERS preferentially sampled and sent letters to those individuals who had used it frequently for a sustained amount of time. Interviews were conducted by 4 study team members (HS, RG, AS, AM) between May and October 2015. All interviews were transcribed.

Interview Content

Phone interviews used a semistructured interview guide that focused on 4 areas: the respondent’s use of the price transparency tool (if any), previous use of healthcare and how he or she selects a provider, opinions about healthcare consumerism, and demographic information. Consistent with qualitative research methods, interviewers had the flexibility to engage respondents in relevant discussion outside of the structured questions.32

Analyses

Interviews were coded using Dedoose (SocioCultural Research Consultants, LLC, Los Angeles, CA), an online platform for analyzing qualitative research. Research team members developed a thematic coding guide around use of the price transparency tool, opinions on shopping for care, and general views of the cost of healthcare. Using Dedoose, a study team member (HS) analyzed the transcribed interviews in conjunction with respondents’ descriptive information using the coded themes. Other study team members (RG, AS, AM) also coded a random sample of interviews to confirm consistency of coding and themes.

This study and its materials were approved by the Harvard University Institutional Review Board.

RESULTS

We contacted 200 CalPERS members who were enrolled in a PPO product and given access to the Castlight price transparency tool through their employer. We interviewed 39 members (20% response rate); 67% were female, 65% were older than 50 years, and 73% had completed an associate’s degree or higher (Table 1). Among respondents, 17 reported using the price transparency tool frequently (defined as 4 or more reported log-ins), 13 reported using it infrequently (defined as 1-3 reported log-ins), and 9 reported never having used it. Our findings did not vary substantively across users versus nonusers or by frequency of use of the tool. Thus, we present our results by themes and highlight the few circumstances where there are notable differences.

Views on the Cost of Healthcare and Price Shopping

Most respondents expressed frustration with the high cost of their healthcare, price variations across providers, and receiving an unexpected, costly bill after receiving care. Many felt like they did not have control over their or their family’s healthcare spending beyond taking the initial step to seek medical care. One respondent said, “‘Control,’ I mean you can decide not to go and get the care, so in that respect, you have control. But at the same time, if you want to be healthy, you really do need to [get needed care], and sometimes that means you have to go do something that’s going to cost you money. And you don’t have any control over what they’re going to charge you.”

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