If you have followed this blog for even a few weeks, you probably heard me say several times what this article says; the idea that patients can be turned into price conscious shoppers for health care is bogus. In addition, even if they could, it would affect only the least costly areas of health care spending, essentially some outpatient services.
Even the concept of high deductibles as a tool to motivate people is questionable. Let’s say a family has a $5,000 deductible. You may assume they would be shoppers because it is in their best interest, but not necessarily so. If a family has ongoing health care expenses because of several children, one or more members with a chronic condition or similar situation, and is likely to reach that deductible or near it, then it doesn’t matter what they spend because it only means they reach their reimbursement point sooner in the year, that reimbursement could be 100% at which point they have no interest in prices at all.
To complicate matters, exactly what price are they shopping for? Three different patients with different coverage may each be billed a different fee. If I called a imaging center and asked the price of a mammogram, what they may tell me has little relationship to the price I will be charged OR the conversation gets very complicated based on my insurance coverage.
Whether the typical patient in need of health care is disposed to an online search for their insurers negotiated prices for a given procedure code is questionable at best.
What’s the answer? Tight networks with deeply discounted pricing made public. Oops; tried that small network thing not something people like. How about every provider is allowed the same price for a given service and they can compete on service and quality ? Oops, sounds like big government, those free market dreamers and many providers aren’t going for that one.
As long as we keep focusing on the insurance payers of health care instead of the providers and their patients, we have no chance of changing the cost of health care. And, by the way, neither does Obamacare.
Dennis Scanlon, a Penn State health economist, is not surprised. “Health care choices are different than most product and services,” he said. “Most decisions are driven by physician referrals, and insured patients usually face little variation in costs across options.” Another reason people may not price-shop for health care is that they could find the process too complex.
Providing more information to consumers doesn’t always improve their decision making. In many settings, it can overwhelm a person and lead to poorer choices. It’s far easier to go on a recommendation, even if it costs more. And not every kind of health care is amenable to shopping.
According to one analysis, only about 40 percent of spending on health care is. Patients can reasonably shop only for care that is for nonemergencies and would be motivated to do so only if they stood to gain. If patients’ out-of-pocket costs are the same at both a high-cost and low-cost doctor, what’s to prompt them to select the cheaper one? Insurance is paying for the difference anyway.