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The American Journal of Managed Care June 2017
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Patients' Views on Price Shopping and Price Transparency
Hannah L. Semigran, BA; Rebecca Gourevitch, MS; Anna D. Sinaiko, PhD; David Cowling, PhD; and Ateev Mehrotra, MD, MPH
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Patients' Views on Price Shopping and Price Transparency

Hannah L. Semigran, BA; Rebecca Gourevitch, MS; Anna D. Sinaiko, PhD; David Cowling, PhD; and Ateev Mehrotra, MD, MPH
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.
Salience of searching for price information. The first set of barriers related to when and for what reason respondents reported they should search for price information. As previously noted, most supported the idea in theory; however, many respondents described price shopping as a foreign concept, as they had never considered using price to choose a doctor or going against a referral from their provider. Among those who had not used the tool, several respondents mentioned they simply forgot to use the price transparency tool when they were searching for a new provider. In particular, it was common for respondents to express disappointment during the interview if they had forgotten to use the tool after being reminded of it. Among those who had used the tool, it was common to have logged on to the tool once or twice out of curiosity but to not have returned to the website since then.

Another theme in the interviews was the belief that proactively searching for price would not impact what respondents would pay out-of-pocket for their care. For example, several respondents noted that it was unimportant to shop for care because they were already beyond their deductible or because their co-payment for an office visit was always the same. Many—in particular, those in rural areas—felt it was not useful to shop for care because there was a limited set of providers they could see within their health plan’s provider network. Others were skeptical of the usefulness of the price information on the website because it did not account for the tests or referrals the physician might order during a visit.

Perception that other factors are more important for provider choice than price. The second set of barriers consisted of factors that respondents judged as more important than their out-of-pocket costs when selecting a provider. Overwhelmingly, respondents did not want to shop for care because of loyalty to their current providers. This was true of those who used the tool and those who had not. Many respondents commented that differences in price were relatively unimportant when it came to their primary care physicians (PCPs) and specialists with whom they had an established relationship. Respondents also judged referrals and input from their own physicians as key reasons for making a given provider decision. 

Most respondents believed that seeking quality care was more important than the location of the facility and far more important than their out-of-pocket costs. However, there was disagreement among respondents on how to choose care based on quality. Some respondents took the provider’s location or the cost of their care to indicate quality: “[For] the more quality [care you receive], you should expect to pay a little bit higher cost as opposed to those [providers] that are discounted and may not have the attention to detail to find out exactly what you’re going in for, what’s wrong with [you]…I don’t have a problem with that.” Yet, many respondents reported that price had little to do with quality. 

Of the notion that higher-priced providers offer higher-quality care, one respondent said, “I don’t agree with that. I’ve had doctors that…provide incredible care and I’ve had other doctors that, you know, they charge huge amounts and you get 5 minutes of their time, and you’re out of there. No, I don’t see a correlation at all [between price and quality].” Respondents also reported overlooking price when it ultimately came to making a medical decision to improve their health and well-being.

Among those who used the price transparency tool, few made a decision based solely on the tool and instead used it as a supplement to other resources to make provider choices, such as online reviews and referrals from friends and family. One respondent described, “I spend quite a long time because what I do is I take the info from Castlight, and…[I try to] find the right match between what Yelp says about the office that Castlight is saying has quality.”

Situations amenable (or not) to shopping for care. Respondents reported that shopping for care, using either the price transparency tool or other resources, was reasonable for nonemergent services. Of the respondents who had shopped for care, particularly those who had used the price transparency tool, they most frequently reported doing so for imaging and labs. One respondent described, “I routinely have [an] MRI because…of the [BRCA] gene…and I was concerned about how much it was going to cost…That’s why I went to Castlight.” A few respondents also described using the price transparency tool to find cheaper labs than they were currently using: “I have a condition that requires I have lab work 3 or 4 times a year…The blood work through the particular laboratory [I found on Castlight] was like 15%-16% of what I was paying for the last 5 years at the hospital labs…It’s a huge difference for me.”

Respondents also described situations in which they would not use the price transparency tool. They rarely reported using the price transparency tool to search for a new PCP. A few searched for their own PCP out of curiosity rather than with the intention of making a switch.

Other Uses for the Price Transparency Tool Beyond Price Shopping for Upcoming Care

A number of respondents described using the price transparency tool for purposes beyond shopping for upcoming care. Some searched for their provider after booking an appointment to plan for the costs or even after the appointment in order to make sense of a bill. Using the tool to check their deductible status or view previous claims was also popular: “I wanted to keep track of my past visits and past spending…so I logged on [to Castlight], and they are pretty good at keeping [track] of visits and where you are actively in…spending.”

The tool was also used for determining whether providers were in respondents’ health plan network. Others also searched for their existing providers on the price transparency tool to check that they were still in-network or find a new provider who was. Lastly, some respondents reported using the price transparency tool to browse for prices for services they vaguely anticipated needing in the future, either for themselves or their family members, but were not immediately seeking: “I looked up knee surgery, you know, just looking around on the website, what it does. Because I’m thinking of potential future health issues.”

DISCUSSION

Multiple initiatives have been introduced to make it easier for individuals to obtain healthcare cost information; however, despite the wider availability of this data, few are price shopping or using such tools to choose their providers. Our study begins to shed light on why, and we found a notable disconnect. Whether they price shopped for care or not, many respondents described frustration with lack of control over spending and enthusiasm for price transparency and price shopping. Yet, few respondents were able to effectively price shop for care due to a set of common barriers.

The first set of barriers related to salience. Respondents were unfamiliar with the idea of shopping for care and often forgot to use the tool. This might change over time as people become more familiar with the availability of price transparency tools and the concept. However, we also heard that the current structure of health plan benefits inhibits price shopping. In some cases, respondents stated that there was limited choice of providers in their network, particularly in rural geographic areas in which there are simply not enough healthcare providers in-network to offer a real choice.15,33 In other cases, respondents accurately reported that shopping was useless, as their out-of-pocket costs would be the same. Echoing the concerns of others,13,26,34 many services that might otherwise be “shop-able” only require a co-payment or immediately exceed an individual’s deductible. Greater reliance on tiered networks based on price, reference-based pricing, or coinsurance in health plan benefits may increase the salience of price shopping.

The second set of barriers included other factors that were more important than price, such as quality. Research on HDHPs and quality reporting has also highlighted that patients value provider quality over out-of-pocket costs.12,21,34 

Finally, and potentially most importantly, provider loyalty and trust in their providers’ referrals typically trumped willingness to switch providers and out-of-pocket price data.35,36 These findings highlight that solely giving people price data will have a limited impact in terms of where they choose care. Also, engaging providers—PCPs in particular—in price data will be critical.37 For example, a PCP may refer his or her patient to a different imaging center if this will result in lower out-of-pocket costs for the patient.

For price transparency tools to be used more effectively, the public needs education and reminders about how, when, and why they should price shop. There was some uncertainty on what is considered shop-able. Echoing prior work,10,19,24,26,38 our respondents focused on imaging and labs as areas where they would feel most comfortable using price data. In contrast, they reported being least likely to use price data to switch to a different physician. Given our findings about the salience of searching for price information, passively hoping for patients to use a price website is unlikely to be successful. They need reminders about the availability of price data and ideally to be provided with the data at the time of decision making, especially for services that could be defined as shop-able.

Although price transparency tools have been introduced largely to encourage price shopping, it was notable that respondents found the tool helpful for many other purposes, including checking their previous claims history and deductible status, and planning ahead for the costs of an upcoming visit or procedure. Encouraging the use of the tools for these purposes might increase engagement with price data and help patients feel they have more control over healthcare spending. It was also notable that many of the provider searches were for educational purposes and not with the intention of switching. This might explain why prior research has found that office visits are a commonly searched type of care.8,19,24

Limitations

We relied on information reported by the respondents about their price transparency tool usage, as our research team was not allowed access to usage data. As such, respondents could have under- or overrepresented their utilization. Also, a self-selected group responded to the introductory letter, and our sample was made up of beneficiaries of a public employee organization and overrepresented by older adults and females; the opinions on price shopping may be unique to this population. Lastly, because the focus of this study was price shopping and a price transparency tool, we did not focus on how individuals use quality information when making their healthcare decisions and what they thought of how both price and quality information was presented to them. Our study was exploratory in nature, and further research is required to inform recommendations to promote price shopping efforts.

CONCLUSIONS

 
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