A new study is bad news for the push for health care shopping. (Caden Crawford/Flickr)
I hate it when there’s more bad news about the health care costs that are devouring our family, municipal and national budgets. (Latest number: $3 trillion, or 17.5 percent of America’s GDP.)
But here it is: A Harvard study just out in JAMA finds that when health care consumers use price-comparison tools, they don’t end up spending less. In fact, they may even spend a bit more, perhaps because they think higher prices mean better quality.
So much for the idea that if you just let people shop for cheaper care, prices will surely go down.
The study’s senior author, Dr. Ateev Mehrotra of Harvard Medical School, says the findings do not mean that health care price transparency mandates — which have passed here in Massachusetts and more than half of states overall — are a bad idea. Rather, he says, the message is that “It isn’t that easy just to fix this problem.”
About the study: It looks at nearly 150,000 employees at two big companies that gave their workers access to an online health care shopping tool, and compares them to nearly 300,000 status-quo employees. It found that among the employees who got the tool, outpatient spending on average went up a couple of hundred dollars, from $2,021 to $2,233.
The control group’s spending also went up slightly, but among the workers with the shopping tool, spending went up a bit more: by an average of $59 for outpatient care, including $18 out of pocket.
“Some of it is benefits design. …[And] we should also recognize that not everything in health care is shoppable.”
– Dr. Ateev Mehrotra
“Not A Panacea For High Health Care Costs,” says the headline of an accompanying editorial in JAMA. No kidding. Surely no one expected price transparency to solve our $3 trillion problem, but still, these results are also surely disappointing to anyone who hoped health care shopping might at least make a dent.
Or perhaps it will, someday. I spoke with Dr. Mehrotra, an expert on consumerism in health care, about what the results mean. Our conversation, lightly edited:
How would you sum up what you found?
There’s a lot of enthusiasm in the health care system about increasing price transparency, to both help patients become better consumers and to decrease health care spending. And unfortunately, in our results, we do not find that providing price transparency decreases health care spending.
I think there’s been this general idea that, ‘Oh, all we need to do is give people high deductibles, give them prices, and magic will happen, and people will start switching their providers to lower-cost providers.’ And one main message from this is that this should temper that enthusiasm, and it’s more complicated than that.
I don’t think it’s that patients think shopping for care is a bad idea. People generally realize that prices in health care are high and they should switch. But there are other factors that are playing a role.
Dr. Ateev Mehrotra (Courtesy)
Some of it is benefits design. We have these really complicated health care benefits designs that people really struggle to master, and under our current benefit design you might go to such a website and say, ‘Oh, I’m thinking of having my knee operated on and I’ll pay the same amount at every hospital, so it doesn’t matter.’ And a lot of the surgeries were for things that were relatively higher cost and therefore it didn’t matter. So that’s an issue.
And also, a lot of health care is emergent: When you’re having a heart attack and you’re in an ambulance, you’re not going to say, ‘Oh, let me see where it’s cheaper for me to go for care.’ So we should also recognize that not everything in health care is shoppable. Continue reading