Price Transparency Tools Are Driving Better Benefits

Have you ever purchased a big ticket item without checking the price? We’re sure you’ve picked up a pack of gum, a coffee, or even a piece of clothing without looking at the tag. But only the richest among us will have bought a refrigerator, car, or new sofa without knowing how much it would cost. When it comes to healthcare, though, most of us do this all the time.

Employers and benefits advisors are trying to change this. They’re helping their populations find better, value-based care complete with cost information through vendors known as “price transparency solutions.”

Price transparency tools generally take the form of online, searchable databases that patients can use to find providers, compare costs, and “shop” for services. They’re becoming a popular benefit offered by employers for obvious reasons—lower costs are great for payers. A recent article on Employee Benefit Adviser gives an example:

“One adviser working with Pratter [price transparency tool] is Steve Dalaba, co-founder and managing partner of WBS Benefit Advisors. He was surprised by the eye-popping variation of a simple lipid panel test in Pittsburgh, which a live demo of [Pratter] pegged at anywhere from $25 to $1,900.”

This shocking spread is what has employers and advisors excited. If patients can find out in advance which providers, networks, or hospital systems will save them money, they’ll choose lower cost care. Right? Or will they? 

Other industry research has shown that it’s difficult to engage patients with price transparency tools. While most people surveyed agreed that they would love to use a website to shop around for care, fewer actually do—just 3% in one survey. In a study published by Health Affairs, the research found the following:

“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 on average 14 percent.”

Once again, our old nemesis “employee engagement” comes into play. The tools are there, online and accessible for convenience. The programs are there, free for patients to use as part of their employee benefits. But they aren’t using them. Why not?  

1. They like their doctors. Medicine might be the one field left where a word-of-mouth recommendation is still more impactful than advertising, costs, or availability.
2. They don’t know these programs exist. While we live and breathe benefits everyday, most employees just don’t think about it very much. They probably never even read that benefits booklet you worked so hard to create.
3. They’re making care decisions when they need care the most. Oftentimes, people are selecting a hospital or doctor when they’re sick or injured, and they want to be seen quickly. Shopping around isn’t on the agenda when you’re on crutches waiting for knee surgery or searching for a pediatrician for your sick child.

So how can employers help change this? We’ve written before about boosting employee engagement, educating members on their benefits, and even communication strategies that can help. Reach out to employees often about their benefits, and encourage them to get familiar with their coverage before it’s an emergency. Make sure they know who to contact when they need help understanding their network, their coverage, or their benefits beyond healthcare. If you aren’t currently using a price transparency tool, consider adding one to your point solutions, and utilize your consultant or communications vendor to make sure roll-out is done right.

Finally, data is the key to predicting costs and measuring results. A great data partner can help you calculate potential savings, track progress, and measure the ROI of a price transparency tool. Artemis is helping self-insured employers and benefits advisors find the value in a number of different benefits programs.