While the health care consumer is increasingly seeking price information prior to seeking care, the industry lags behind in the provision of that information.
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Americans remain burdened by rising out-of-pocket medical costs. And while there is no quick fix to the broken health care system, understanding public perspectives on the solutions that are on the table is a step in the right direction. Last month, we released new research that examined how people are finding and using health care price information and whether that information can help them save some money.
Our friend Parie Garg, Ph.D., Partner, Health & Life Sciences, Oliver Wyman, shares in this guest blog post findings from her research on health care price information included in her report “Right Place Right Time.” Parie offers insight into why the health care industry is not taking steps to provide people with better cost information at the right place and at the right time.
While the health care consumer is increasingly seeking price information prior to seeking care (as reported in the recent, insightful Public Agenda report), the industry lags behind in the provision of that information. For many health care consumers, obtaining cost information that is trustworthy, usable and easily compared across providers is a significant challenge.
In fact, the “Right Place Right Time” study conducted by Oliver Wyman and Altarum Institute, with support from the Robert Wood Johnson Foundation, found that many health care consumers are not getting the cost information they want or need. According to the survey, which encompassed over 4,000 respondents, approximately 50 percent of respondents are not satisfied with the level of cost information available.
These findings, taken together with the Public Agenda research, reveal a wide gap between what consumers want—when it comes to cost information—and what consumers actually get. But the results likely do not come as a surprise to the health care industry. As published in the “Right Place, Right Time” companion study that surveyed about 100 stakeholders across the health care ecosystem, payers and providers are aware of the challenges that consumers face as they seek cost information.
So why isn’t the industry taking steps to provide better cost information at the right place, at the right time? There are a few reasons that stand out:
- Exact cost of procedures is a closely-guarded secret: Most providers negotiate specific rates with their contracted health plans. These rates are not publicly available, however, as releasing this information would have ramifications in terms of market competition, as well as payer leverage during negotiations.
- Lack of an ROI: While it is clear that consumers are looking for cost information, providing that information at the right place and at the right time is not easy. And (perhaps most significantly), there is no clear ROI established as a result of providing this information. Consumers can be fickle, and health care decisions can often be based on emotion as much as cost. As an example, a cancer diagnosis often leads to a patient seeking out the best care, with or without a price comparison. Consequently, cost comparison tools may not provide the best return on investment.
- Competing priorities: Over the past several years, the health care market has been in a constant state of upheaval. With the American Health Care Act just having been passed through the House of Representatives, there is likely to be continued uncertainty over the next two years. In times like this, payer and providers have a lot to be worried about, and, unfortunately, consumer engagement tools are often on the bottom of their priority list.
Despite these significant roadblocks, it should be noted that payers and providers are realizing that patients are behaving more like consumers than ever before. The technology-savvy younger generations have little patience for industries that cannot quickly tell them how much things are going to cost. And with the possibility of the American Health Care Act nearly doubling contribution limits of Health Savings Accounts, providers and payers have more of a mandate to consider provisions of cost oriented tools and information. Individuals will hopefully have a leading role to wholesale change in the usability and reach of cost transparency tools in the future.