Study Shows Health Care Shoppers Like Lower Prices

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Study Shows Health Care Shoppers Like Lower Prices
Calendar24 October 2014

Health care consumerism hinges on three things: Having pricing information, comparing prices before seeking services, and actually taking price differences into account when choosing a provider. Employers can provide employees with a transparency tool and even give them incentives to use it -- but will employees select lower-cost providers as a result? That’s where the rubber meets the road in terms of cost savings. Fortunately, a new study by Castlight Health, published in JAMA, suggests they will. Castlight, which provides an online transparency tool, analyzed the medical claims of more than 500,000 employees at 18 companies between 2010 and 2013. Those who compared prices before receiving care had lower claim payments than those who didn’t: 14% less for lab tests, 13% lower for imaging, and 1% lower for doctor visits (prices don’t vary as much for doctor visits as for lab tests and imaging). Interestingly, employees chose lower-cost providers even when their own out-of-pocket costs were not affected. This bodes well for the ultimate goal of transparency -- using competition to hold down cost. The bad news? Fewer than one in three plan members in the study actually searched on prices before seeking care. That tells us that communication will be a key factor in the success of a transparency initiative.

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