Let the Sun Shine in on Health Care Costs
By David Sandman, President and CEO, New York State Health Foundation
Published in the HuffPost on September 19, 2017
I recently blew a tire while out on a bike ride; I must have hit a rock or something. I looked up bike repair shops on Yelp, found one nearby that was well-reviewed, called them up to ask how much it would cost, and they quoted me a reasonable price. I got my new tire and was on my way. End of story; it was a nuisance, but nothing more.
What if, instead of the tire, I’d blown out my knee in a bicycle accident? Would it have been so simple to figure out where to go to get an assessment? How would I choose an orthopedist? What if I ended up needing surgery and/or physical therapy? How could I make choices that worked for me? And last, but not least, how much would any of it cost?
I know that fixing a knee is more complicated than fixing a tire. It’s a more complex procedure and there are a lot more variables. But that is no excuse for a lack of transparency in health care. In fact, it’s that very complexity that makes the need for price and quality information so much greater. The consequences of my busted knee are way bigger than a busted tire, so I’d want to know as much as I could rather than fly blind. Basically, I’d want to be an educated health care consumer. (As I’ve written before, there’s a meaningful difference between “patients” and “consumers.” If I had a really bad bicycle accident that left me unconscious and in need of emergency care, I would strictly be a patient, one without the ability to shop around for health care. But knee surgery and physical therapy are shoppable services; I could do my research and choose providers that best meet my needs in terms of quality, value, and cost.)
I’m not alone. Skeptics of information transparency efforts say the public is just not interested, but evidence says the opposite. A survey by Public Agenda found that about half of Americans have tried to find information about health care prices before getting care. About 20% had comparison-shopped, looking at the prices for more than one health care provider for a given procedure or condition. Not surprisingly, rates were higher among those with deductibles or who are uninsured. If you are on the hook for more costs out of pocket—through high deductibles, co-pays, coinsurance, and premiums—you’ve got plenty of incentive to shop around. And consumers are paying a greater share than before.
Given these trends, more tools and resources are emerging to help consumers do their homework and comparison-shop for health care. For example, Catalyst for Payment Reform found that 97% of health plans nationally offer some sort of online cost calculator tool to their members. Other free cost-calculator and comparative tools are publicly available from state governments, employers, and other entities.
Despite the proliferation of tools, why do health care costs remain opaque? First, the quality of these tools is widely variable; information may be out of date or incomplete, and the design and interface may not be intuitive and user-friendly, according to Consumer Reports. More importantly, people simply don’t know they exist and aren’t using them. Exact estimates vary, but virtually all analyses have found that use of price transparency tools is low. A recent survey published in Health Affairs found that a whopping 75% of survey respondents said they didn’t know that price-shopping tools exist. In that same survey, only 13% of respondents had sought information about their expected costs and only 3% compared costs across providers before receiving care. More than 70% of these respondents know that there is wide price variation among health care providers, and a similar percentage support the idea of comparing costs when choosing a doctor. Even with that knowledge, there is a disconnect with their behaviors.
We need to actually get price-shopping tools on health care consumers’ radar. If these resources aren’t easy to find and easy to use, people will never use them. I’m excited that a new tool for New Yorkers, YouCanPlanForThis.org, the brainchild of the nonprofit FAIR Health, is now up and running. (Full disclosure: the New York State Health Foundation, the organization I lead, it its main funder.) The site is easy to use: You just enter your ZIP code and look up the type of medical or dental care you need. It allows you to compare average in-network and out-of-network costs if you have insurance and to see what you’ll pay out of pocket. And you can research both the total and itemized costs of 25 “bundles” of care—for example, all of the procedures related to a knee replacement, or all aspects of maternity care—so you can get a better sense of the total cost of care.
YouCanPlanForThis includes video tutorials and other educational resources, as well, and its design is user-friendly and attractive. It’s also built on FAIR Health’s existing website and mobile app, rather than adding one more stand-alone resource into the mix. And FAIR Health has mobilized an aggressive outreach campaign to ensure that New Yorkers know about the site—you’ll be seeing ads and seeing celebrities like Larry King or Mandy Patinkin talking about it. The next phase will be to incorporate specific quality metrics and pricing information into the tool, so that consumers have a better sense of the value of care, not only the price.
Is it going to work? A rigorous evaluation is underway by researchers at New York University to assess the extent to which consumers use YouCanPlanForThis and how the tool affects consumer shopping behavior across types of providers, procedures, and markets. In addition, it will evaluate how providers respond to the availability of price information. Stay tuned for those results. I’m optimistic but also realistic. Information alone won’t make health care more affordable, but it’s a necessary ingredient. A little sunshine won’t hurt you, but fumbling around in the dark very well might.
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