Price Transparency Tools Are Still Struggling. We Offer Advice

The potential of price transparency tools to help consumers with high out-of-pocket medical expenses remains largely untapped, according to two recent studies published in Health Affairs and other recent research by Consumer Reports and Public Agenda.

One study found that while more than half of the nearly 3,000 patients surveyed said they would use a website to shop for healthcare if they knew of one, only 13 percent actually looked for information on future healthcare spending and only 3 percent compared prices and costs across providers.

In the second study, patients with access to a price transparency tool focused on “shoppable” services did not experience overall lower spending on those services, and only 12 percent used the tool to begin with. On a positive note, patients who compared prices for imaging tests decreased spending an average 14 percent.

Research by us at Consumer Reports and a survey by Public Agenda (publicagenda.org) signals additional cautious hope for consumer’s use of price transparency tools in the future.   Both projects were sponsored by the New York State Health Foundation (nyshealthfoundation.org) and received additional funding from the Robert Wood Johnson Foundation (rwjf.org).

What Public Agenda found

Public Agenda surveyed 2,062 adults nationwide and, in addition, 802 people in New York, 808 in Texas, 819 in Florida, and 826 in New Hampshire. In contrast to the Health Affairs findings, Public Agenda found that about half of those surveyed had tried to find medical price information online before getting care—with a focus on how much they might pay out-of-pocket.

About 20 percent of respondents said they sought the information to compare prices across providers while 28 percent tried to find out a single provider’s price. Of those who compared prices, 59 percent said they chose a less expensive doctor, hospital, medical test, or treatment.

Seventy percent agreed with the statement: “higher prices are not typically a sign of better medical care.”

Knowledge and use of state-sponsored price information websites was low, however. About 20 percent of people in states with such websites, like New Hampshire, said they had heard of the sites and only seven percent had tried to use them.

Consistent with the Health Affairs findings, almost 60 percent of Public Agenda’s respondents who had not tried to find price information online said they would like to do so in the future. And 70 percent agreed it would be a good idea for doctors and their staffs to discuss prices with patients before ordering or doing tests or procedures. Less than a third (28%) said their doctor had ever discussed cost with them.  

That plus low public awareness of medical price variation remain serious stumbling blocks to wider adoption of price transparency tools. A surprising 56 percent of people in the Public Agenda survey were not aware that doctors’ prices vary.

The Consumer Reports findings

CR used a combination of qualitative and quantitative methods to evaluate health plan websites and their cost estimator components. We also assessed stand-alone cost-estimator tools. For both, we used a structured evaluation by trained reviewers and usability testing by consumers.

We developed an overall score (0 to 100) based on 100 criteria grouped into four components: ease of use, functionality, content, and scope and reliability. (For details, see our technical report.)

We found that the quality of the tools varied substantially – from a low of 55 (Kaiser’s tool) to a high of 84 (Cigna’s tool).

Based on the 100-point scale, the insurance plan websites scored as follows:

Cigna – 84
United HealthCare – 82
Aetna – 77
Anthem – 73
Humana – 69
Kaiser Permanente – 55

The biggest failing was in the presentation of “value” to consumers—that is, combined cost and quality data integrated in a way that helps consumers make meaningful choices. Only the Cigna site got top marks for that.

Stand-alone national price transparency websites can provide useful information on prices and quality, especially for consumers who have no access to this information through their health plan. But our analysis found that many of the stand-alone tools lack key features that consumers want. Even the highest-rated tools have limited individual provider-level quality data, for example.

Two of the state websites (CompareMaine and New Hampshire’s HealthCost) and one of the stand-alone national sites (Amino) scored well, however—near the average of the private health plan tools.

The scores:

Amino – 66
CompareMaine – 65
NH HealthCost – 63
Colorado Medical Price Compare – 44
Guroo – 41
MDsave – 40
Healthcare Bluebook – 37
FAIR Health – 28

A synopsis of our findings for non-experts can be found here. The full report of our findings can be found here.

The New York State home page for the project is here.

Implications and recommendations

We think price and quality transparency is a basic right for consumers. People need this information to manage their out-of-pocket expenses, avoid expensive surprise bills, and optimize their chances of getting high quality care.   According to 2016 study by the U.S. Federal Reserve, 47 percent of consumers don’t have the financial resources to manage an emergency expense of $400 or greater, without borrowing or selling assets.

The cost/quality tools available now are improving, but there are critical gaps. Some lack essential features, such as accurate, reliable up-to-date data, and out-of pocket spending estimates. And most don’t yet marry price and quality information in a way that is easy for consumers to understand and use.

Given the financial burdens increasingly placed on consumers, creating actionable price and quality transparency content is no longer an option; it simply has to happen.

At a minimum, insurers should be required to provide the information to enrollees. At the time of our study, only 12 New York state health plans offered price and out-of-pocket cost estimator tools to their members. Those 12 plans reached about 50 percent of the fully-insured market. And nine other New York plans—with 3.3 million enrollees—did not offer a plan-specific cost-estimator tool.

There’s no question about the need. About 30 percent of people with insurance through their employer have a high-deductible health plan, and projections from the Kaiser Family Foundation and others indicate that will increase to 40 percent in the next few years.  The unintended consequences of high-deductible plans are causing consumers harm; much of the savings they generate are due to people cutting back on healthcare services. People postpone going to a doctor, don’t fill prescriptions, or cut back on preventive care—and most troubling of all is that the sickest workers also cut back on care. (See “How to Survive a High-Deductible Health Plan” (from the January 2017 issue of Consumer Reports.  

At the same time, it’s becoming much clearer that price and quality transparency alone will not be a magic bullet for bending the health care cost curve. One analysis found that only seven percent of total healthcare spending was amenable to shopping (although that seven percent represents 47 percent of consumers’ out-of-pocket costs.)

Our recommendations:

  • For outpatient and elective in-patient services, consumers deserve a pre-visit, personalized estimate of the costs they will face.
  • All cost/quality tools should meet high standards for ease-of-use, functionality, content, and reliability, similar to those described in the Consumer Reports ratings rubric. (See links above.)
  • Quality information should always be made available alongside price information and vice versa.
  • Insurers should address the shortcomings of their price/cost estimator tools now, to prepare for increased use in the future.
  • State and federal regulators should consider mandating the availability of cost/quality tools for all health plans, to ensure consumers have timely access to price information specific to their plan.
  • Insurers, employers, health providers, government agencies, and health navigators should promote the availability and user benefits of online cost/quality tools, to increase their “findability” and use by consumers.

As we were preparing to submit this post to THCB, we saw this excellent blog at Health Affairs. It discusses and links to Maryland’s new price and quality transparency initiative.

Doris Peter is Director of the Health Ratings Center, Chuck Bell is Programs Director, and Steven Findlay is a Contributing Editor, all at Consumer Reports.  

7 replies »

  1. Hm. Over here at ClearHealthCosts, We see many, many people shopping for prices, and saving money as they’re doing it. A few possible reasons that our findings are so different leap to mind.

    –We partner with big media organizations, in local markets, like our New Orleans “Cracking the Code” investigation. We’ve tested our software and our methods over multiple projects, and we know this is easy to use, reliable, and actionable. Also, everybody in town was talking about us. Link here: https://clearhealthcosts.com/new-orleans-partnership/

    –We show how people save money — and people who see that their friends and neighbors are saving thousands (this person saved $3,786!) are sensitized to the idea of shopping. And they see how to do it and where to do it. https://clearhealthcosts.com/blog/2017/05/saved-3800-mri-people-use-data/

    –Our price-search tool is created by journalists for real people. People know we don’t have a dog in the fight. We’re not steering traffic to our favorite providers, as many tools mentioned here do. We’re not giving average or median prices, or chargemaster prices, because that’s not truly actionable. We’re not attached to the industry; we’re journalists, and we know how people operate when they’re looking for prices. Our work builds trust with our communities. Read the community comments in this blog post! https://clearhealthcosts.com/blog/2017/07/journalism-trust-new-orleans-partnership/

    People also actively use our home site, in addition to our media partnerships.

    So, yes, people do shop for health care. They do save money. And they do express deep gratitude to us for our work!

  2. The devil is in the details. It is likely the states where it is allowed require the plans to meet state by state regulatory requirements (including mandated coverages)…the way around that is self funded ERISA plans….it is very complicated and fought tooth and nail by the health insurance industry. Trump’s executive order is a step to simplifying this….but the regulatory restrictions require some weed wacking for association plans to work.

  3. Last I counted 6 or 7 states already allowed insurance to be sold across state lines. No insurance company has decided to sell across the line yet.


  4. So, the proposed changes that were discussed in the recent Executive Order have to first be considered by federal agencies, and they have to publish regulations, so these are some ways off, and are not in play for the 2018 plan year. CR discussed these changes in a recent post >> https://www.consumerreports.org/health-insurance/how-trump-is-trying-to-overhaul-healthcare/ which has a good Q & A about them.

    As Kevin Lucia of Georgetown told CR, these alternative health insurance plans such as association health plans could have serious tradeoffs. “If you’re younger and healthier, you may pay less for insurance. But if you get sick, these plans may not cover the cost of the care you need,” he said.

    The open enrollment period for this year starts November 1 and ends December 15. The enrollment period is shorter than before, so it’s important to make an early start. No matter if this is your first time getting covered or you are returning to shop and save, you must take action by December 15. Those who choose to go without health insurance may have to pay a penalty. There is a minimum penalty of $695 for not having health insurance.

    Coverage could be more affordable than you think – and there is a possibility to receive financial help. Last year, 8 in 10 people qualified for financial help – for most people, that meant they could find premiums between $50 and $100 per month.

    If you have questions about signing up or want to talk through your options with a trained professional, free help is just a call or click away. Call 1-800-318-2596 or visit http://localhelp.healthcare.gov You can compare your choices at the online marketplace, and/or discuss your options with a navigator or nonprofit consumer assistance program.

    In addition, your state insurance department may be helpful, because health insurance is regulated at the state level. To find your insurance department, look here. >> http://naic.org/state_web_map.htm

  5. I know that it is very early, but given the Trump administration’s decision to allow health insurance to be sold across state lines, do you have any advice for people who are considering shopping for better deals?

    How would you go about researching this kind of thing?

    Are there any things you might caution consumers to look out for?

  6. I very much like your recommendations for increasing transparency…and for the insurers to play a key role. They need to be pressured to do so. In my limited experience they resisted disclosing prices they had negotiated with different providers/health systems…hopefully that has changed/is changing.

    Re this statement: ” The unintended consequences of high-deductible plans are causing consumers harm; much of the savings they generate are due to people cutting back on healthcare services. People postpone going to a doctor, don’t fill prescriptions, or cut back on preventive care—and most troubling of all is that the sickest workers also cut back on care.”

    From what I know the best research on this has been done by Rand…and it shows no clear harm. A few examples:

    April 18, 2011
    People who are medically vulnerable — those with low incomes or chronic health problems — who enroll in high-deductible health plans are at no more risk for cutting back on needed health care than other people who enroll in the plans, according to a new RAND Corporation study.

    and “• Families who switched to a consumer-directed health plan (CDHP) spent an average of 21 percent less on health care during their first year under the CDHP than similar families who remained in traditional plans.
    o Two-thirds of the savings came from initiating fewer episodes of care; one-third came from spending less per episode.
    o In addition, the plan design mattered: Spending reductions were greater for consumers in plans with health savings accounts rather than employer-reimbursed accounts.
    • Enrollees cut back on some beneficial services, including preventive care (e.g., cancer screenings), even though they were fully covered under CDHPs.
    (NOTE: very few preventative services…such as annual physicals etc….have shown that the benefits outweigh the harms….see Nortin Hadler “most screening tests…fail …for effectiveness p. 135 Citizen Patient).

    and: “The reductions are driven by spending decreases in outpatient care and pharmaceuticals, with no evidence of increases in emergency department or inpatient care over the three-year window.” March 2016 Journal of Health Care Economics.

    Important note: these studies were re employer sponsored high deductible plans…..not the ACA high deductible plans….the ACA plans I dub Frankenstein plans because of their crazy high deductibles and crazy high premiums.