Successful initiatives using private sector data can provide insight into what is needed to power the paradigm shift to price transparency.
Recently, the call for healthcare price transparency has been coming from the highest levels of government. In April, federal officials announced that Medicare would require hospitals to post their standard prices online. In March, during speeches before audiences representing hospitals and health plans, US Secretary of HHS Alex Azar said, “I believe you ought to have the right to know what a healthcare service will cost—and what it will really cost—before you get that service.” That same month, CMS Administrator Seema Verma, speaking to a health IT audience, said Americans seeking healthcare “want to shop around for the best price.” In February, a bipartisan group of US senators led by Bill Cassidy issued a letter seeking answers to questions on how to achieve greater healthcare price transparency.
One of the questions from that bipartisan group was, “How can our health care system better utilize big data, including information from the Medicare, Medicaid, and other public health programs, to drive better quality outcomes at lower costs?” One answer to that question is to look at how big data from the private health sector are already being used to improve price and quality transparency, with the aims of empowering consumers and increasing affordability. Successful initiatives using private sector data can provide insight into what is needed to power the paradigm shift to price transparency.
Powering the Paradigm Shift
It is important to realize that price transparency is a paradigm shift. It requires a fundamental change in approach, not merely surface alterations. Some studies of past price transparency efforts have concluded too quickly that consumers will not use price transparency tools or save money with them, at a time when price transparency was still in its infancy and the tools still in development. A close look at those studies shows that consumers are beginning to use the tools, but that more of a push may be needed. For example, in a 2017 study in Health Affairs, health plan enrollees who used a price transparency tool to search for prices of imaging services before receiving care paid an average of 14% less than the price paid by similar patients who did not search for price information. Although the authors emphasized that the tool did not decrease overall spending in the study period, the fact that it lowered spending for imaging services for those who did use the tool is a signal that price transparency can work.
The public hunger for price transparency is clear. A 2015 survey by Public Agenda found that the majority of Americans (56%) have tried to find information on healthcare prices before getting care. Even among those who have not tried, 57% said they would like to know the prices of healthcare services in advance. Likewise, in a nationwide study conducted in 2016 by FAIR Health, nearly 60% of respondents indicated that they would travel over 50 miles to save at least 50% on their medical bills. What is needed is a major effort to supply Americans with tools they can use. A sufficiently large, national, multi-payer dataset of private claims data can power the necessary paradigm shift.
Through our own efforts in this arena, we have learned several important lessons about how to use private claims data to bring price transparency to consumers online.
Elements of a Successful Price Transparency Website
Among the elements needed for the success of a price transparency website are the following:
Getting the Word Out
Once all of these elements are included in a price transparency site, you cannot just launch it and expect consumers will find it. Price transparency is a new paradigm and needs to be introduced to consumers in a thoughtful way. You need to promote the site with a creative, catchy campaign that motivates consumers to seek it out. You do not want a consumer transparency tool to be equivalent to the tree falling in the forest that goes unheard.
For example, to let consumers know of the availability of our free New York State consumer website, You Can Plan for This, launched last September with support from the New York State Health Foundation, we mounted a multidimensional, statewide educational campaign—including PSAs, billboard, kiosk ads, and traditional and social media. Since launch, the site has attracted tens of thousands of unique consumers.
Our experience is that private claims data, on a sufficiently large scale, can power price transparency websites that, if thoughtfully designed and promoted, consumers will find accessible and useful. In a time when price transparency to empower consumers is of increased national interest, we believe “if you build it” in an innovative way with rich, independent data and a purposeful campaign, “they will come.”