The price for health care could be right, if it’s known

By Molly Burchett
Kentucky Health News

People often shop around and compare prices when making a large purchase, and some consumer advocates, employers and health plans are pushing for price transparency in health care so it’s easier for consumers to compare prices. However, many questions remain about whether or not price transparency is possible, or if it would even affect health costs and outcomes.

Making it easier for consumers and patients to compare prices encourages them to look around for a better deal, says a study published in the Journal of the American Medical Association. The study focused on the use of Castlight Health’s online pricing platform and explored whether there was a reduction in costs to employers and employees for laboratory tests, advanced imaging services and clinician office visits.

Lab tests and imaging saw the biggest savings in the study, dropping 14 percent and 13 percent, and primary care offices visits also dropped by 1 percent, according to the study. Additionally, the study showed that claim payments were lower for all services for employes who used Castlight versus those employees who did not.

But less expensive care doesn’t always equal higher quality care. Price transparency’s impact is realized only to the extent that it empowers consumers and influences their behavior, and price is only one of the variables that consumers need to evaluate the value of health services.

“One thing the study can’t answer is whether patients are making better decisions or just cheaper ones. They’re finding lower-cost options, the study finds, but it doesn’t tell us how patients are taking into account things like patient satisfaction, years of clinician experience and other provider characteristics,” writes Jason Millman of The Washington Post.

Another important thing the study both can’t and wasn’t designed to predict is whether transparency will reduce overall health spending, writes Millman. Health-care economist Uwe Reinhardt writes, in a separate JAMA editorial, that early results of research suggest that price transparency in health care can result in less spending.

Other experts have expressed doubts about this “free market” approach. In a Huffington Post article, physician and systems theorist Deane Waldman says that price is not one of the pieces of information consumers need to re-install free market forces into health care because the present health-care market in the U.S. is not free.

“The consumer can have all the information in the world, but without control of his/her own money, and without sellers competing for those dollars, the market will not work. One cannot have the advantages of free market forces if the market is not free,” writes Waldman.

Similarly, Reinhardt says that comparing the costs of procedures only works if people have a choice between healthcare providers. That may be a major complication for Kentuckians in rural areas where providers may be scarce or insurance coverage may not be comprehensive.

Massachusetts is the first state to mandate some level of price transparency. However, resistance from both provider and payer communities suggests that large-scale adoption of transparency initiatives will likely be both heavily debated and slow.

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