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One year can drastically change consumer behavior. At least, this seems to be the case when price shopping for healthcare. If last year people weren’t keen on comparing healthcare services and products’ online, this year the situation seems different.
In 2017, a study published in June by AJMC®, said that even though patients wanted to shop around for better prices for their healthcare, they encountered various barriers which prevented them from doing so. The inner structure of health benefits is one of the reasons someone cannot easily change providers. In some situations, patients said, shopping around might ultimately prove futile, because out-of-pocket costs would be the same. In others, there were not enough providers in a network to offer a real choice.
Not too many people were seeking price information a little over a year ago. Reminders and education were needed, studies found, so patients were prompted to use price transparency tools when shopping for healthcare. According to a study in Health Affairs, only 13% of patients tried to find financial information before having an out-of-pocket cost and even fewer (3%) compared costs between providers before getting care.
The situation is definitely changing. A recent survey shows a very different trend. It seems that more and more patients, especially millennials, are price shopping for their healthcare, and they make decisions based on price information.
The way people look for information is also changing. The internet and mobile apps are gaining more ground. More than one third (36%) of respondents in the 2018 United Healthcare Consumer Sentiment Survey said they had compared the quality and cost of medical services over the last year using the internet or mobile apps. These numbers are up more than four percentage points compared to those from a year ago. The really impressive growth, 257%, is that compared to 2012, only 14% of people said they had been price shopping for their healthcare.
In order to choose the best healthcare plan for themselves, patients first need to know exactly what the prices are for the healthcare they need. Giving patients the price transparency they want promotes responsible consumer healthcare planning, builds trust and loyalty, and helps providers avoid financial headaches in the long run.
Surprisingly, patients don’t always want to know the prices so they can change the provider. According to surveyed consumers, offering price transparency up front does not change most patients’ buying behaviors. Almost half (46%) claim they need the information for budget planning purposes, not in order to change from where or when they receive services. Only 11% use it to shop around.
After budget planning, the second main interest of both insured and uninsured patients is how affordable healthcare can be.
Younger consumers are significantly more likely to price shop than members of older generations. It might seem that younger people need less healthcare than older generations, and this can be correct most of the time, some figures prove that the prevalence of long-term or chronic conditions limit activity and reduce the quality of life in young people aged 10-24 years is rising.
Since this particular group is more likely to use mobile phones or tablets to access the apps needed to better manage their conditions, they are also the group which could be interested in shopping around for healthcare prices.
91% of consumers want price transparency, but not all the providers deliver it. In theory, a free-market system should provide reduced prices and savings. Unfortunately, the ability to shop around for the best priced service or product is not easy within the healthcare system, and competition is not always encouraged. The generic drug manufacturers, for instance, are accused of fixing prices and dividing the market to cripple competition.
Uninsured patients, or those who are in a high-deductible health plan might find that price shopping can yield prescription drug savings, a paper in the July issue of The American Journal of Managed Care reported. According to the authors, if providers did not exercise complete price transparency, patients would overpay for their medications.
Another difference they noticed was between geographical areas. Same drugs could cost less in lower-income areas. Online purchasing prices using a coupon or from independent pharmacies is more profitable to patients than buying from grocery, big-box, or chain drugstores.
The fact that people have access to healthcare prices, doesn’t necessarily mean they will spend less or even that they will use the transparency tool if they have access to it. That’s what the California Public Employees’ Retirement System (CalPERS) found when it offered a price transparency tool for certain services, such as advanced imaging, lab tests or office visits.
Although they had the tool, only 12% of employees used it and, of these, only a few actually received cheaper imaging services.
In certain circumstances, it isn’t always only about less pricey options, but also about better ones. If, in the past, it was mostly the employer who decided which healthcare plan employees would have, now this might make the difference between choosing one job or another. People are more interested in their health coverage and what exactly they get for the money, especially when they have to partially cover the bill. Companies increased their efforts to not only choose better healthcare for their employees, but also to give them the necessary tools to compare prices.
Employers who have implemented these tools have been able to save money. As AJMC.com contributor Jon B. Christianson, PhD, explains, reference pricing is a strategy where employers set a reimbursement level for a service and consumers who choose a provider with a price that exceeds the limit will pay the difference. People tend to choose providers under the limit, research has shown.