Healthcare Price Transparency Decreases Costs Up to 14%

Calls for greater healthcare pricing transparency have been gaining steam and recent government and private initiatives have sought to use price transparency to reduce healthcare costs.

A new study in JAMA found that when price transparency information was available for patients to use, total claims payments for common medical services decreased. Researchers studied medical claims from more than half a million patients from 2010 to 2013 to determine whether using an employer-sponsored private price transparency platform was associated with lower claims payments for 3 common medical services.

“Patient access to pricing information before obtaining clinical services may result in lower overall payments made for clinical care,” the authors wrote.

The researchers compared payments between patients who searched a pricing service prior to using a clinical service with patients who had not. The services studied were laboratory tests, advanced imaging services, and clinician office visits.

Once the price transparency platform was available, 5.9% of laboratory test claims, 6.9% of advanced imaging claims, and 26.8% of clinician office visit claims were associated with a prior search.

“It is quite possible that widespread adoption of such solutions by employers will force higher priced providers to reduce their prices,” study author Neeraj Sood, PhD, said in a statement. “The potential savings from such changes in provider behavior could be substantial.”

Overall, patients who searched for services using the platform paid $3.45 less for laboratory tests, $124.74 less for advanced imaging services, and $1.18 less for clinician office visits. Given the relatively small savings for some of the services, the authors wondered what caused patients to change their behavior and conjectured that either some patients recognized that savings per laboratory test could accumulate over time or that less expensive physicians and facilities might actually have been higher quality or simply more convenient.

“The potential for more and lasting behavior change by employees seems truly groundbreaking,” Christopher Whaley, a data scientist at Castlight Health, a PhD candidate at the University of California, Berkeley, and lead author on the JAMA paper said.

Around the Web

Calls for Transparency in Healthcare Pricing Gain Steam

Study Strengthens Support for Price Transparency