You’d never buy a car without knowing the price, quality and a slew of other information important to you; yet every day, we seek health care services without knowing the impact to our bottom line.
That’s why it’s important to pick an insurance company that allows members to research and compare the cost and quality of their health care, just as they do when shopping for a flat screen TV or vacuum cleaner.
And don’t be fooled by the price tag. Despite the price disparity between facilities, there’s no correlation between price and quality. This is critical for consumers to understand since many people erroneously draw a connection between ‘more money means better quality’, and as a result, overpay for their care.
A study published in the Journal of the American Medical Association supported the need for transparency in the health insurance market. Researchers wanted to determine how pricing information influenced consumer behavior.
If its easy for consumers to compare prices, will they shop around?
The answer is yes. When presented with cost information, patients will shop around for their health care services and ultimately save money. In fact, the study found that patients could save an average of $125 when they did their price research before receiving an advanced image screening such as an MRI.
Health care spending is projected to reach 2.3 trillion dollars by 2023, according to the Center for Medicare and Medicaid Services. Price transparency efforts are expected to continue gaining momentum as a way to minimize the growth of health care spending. Plus, consumers will become more price savvy about their health care services.
How do consumers get health care pricing information?
First, consumers should get in the habit of asking financial questions about routine services.
But, there also are tools available to help consumers easily compare the pricing information for multiple facilities. In the recent study published in the Journal of the American Medical Association, patients were using a transparency tool offered by Castlight Health. Some health plans also are starting to offer these services to their members.
Priority Health was the first Michigan-based health plan to open the door to medical transparency by giving its members access to the cost and quality of the most common health care services before they receive care.
View this video for more information on Priority Health’s tool:
What’s more, the financial burden of increased costs causes some people to delay or defer care, which has the potential for significant health issues for the member; and a long-term financial impact to the health care system for everyone.
It should come as no surprise that chronically-ill people are more likely to be hospitalized and have higher medical costs.
When managed differently, these people do not cycle in and out of the hospital as often. In fact, better care management has resulted in Priority Health having hospital readmission rates that are lower than state and national averages year over year.
Patients who are empowered with price information are doing their research and shopping around for their health care services. Now, its up to the health care industry to make that information readily available and accessible.
