People will spend hours browsing Amazon AMZN AMZN, -1.64%, Walmart WMT WMT, -0.96% and Target TGT TGT, -6.77% looking for bargains, and they will aggressively negotiate with car dealers and real estate agents, but they literally outweigh the savings. potentials. when choosing health services. Patients who needed MRIs and had access to a price shopping tool ended up bypassing cheaper providers and paying more, according to a new report in the Journal of Health Economics.
“‘People don’t buy health care the way they buy other services.’ ”- Zack Cooper, Yale University Professor
Policyholders had access to a price shopping tool, but less than 1% of people used it, according to Cooper’s research. The patient and insurer paid $ 851 combined, while the patient paid $ 307 and the insurance company paid $ 544, the research showed. If the patient used the lowest cost MRI provider within the same travel period, they could have paid $ 222 and their provider could have paid $ 324. That’s a combined cost of $ 546 and a price reduction of almost 36 %. If patients searched and found the best deal in an hour’s drive, they and their provider could have paid nearly 55% less. What explains the missed opportunity to save money? It is very possible that it is due to the fact that the referral comes from the person’s usual doctor. (The American Medical Association, the Association of American Physicians and Surgeons, and the American Hospitalization Association did not respond to request for comment.) Patients are more easily intimidated “People don’t buy health care the way they buy other services,” wrote Cooper, an associate professor at the Yale School of Public Health. The idea of looking for the best price is “difficult, intimidating”. For that reason, he said, patients often bow to the advice of referring physicians. “Rather than buying prices for lower extremity MRIs, patients seem to receive care in the usual places that their doctor traditionally refers patients to,” he said. “This key finding underscores how important medical advice is to patient decision-making.” Many doctors may not be aware of price variability and stick with the provider they have always used, Cooper said. “There’s a kind of inertia taking over,” he told MarketWatch.
“Hospital office patients were more likely to go to hospital-owned imaging centers. ”
The “scariest version” of the lost savings has to do with hospitals that have more and more medical practices, Cooper continued. Doctors in these practices might have an incentive to recommend other parts of the hospital business. In fact, the research showed that patients in hospital practices were more likely to go to hospital-owned imaging centers, where average MRI costs were $ 1,475 versus $ 645 for freestanding imaging centers. The trick may be to get doctors more in tune with the potential cost savings, Cooper said. That could be something like an insurance company widget within a patient’s electronic file that shows potential costs at the different specialty service providers nearby. “Let’s target them with information and incentives, and don’t hit the patient over the head,” he said. Cooper deliberately examined the MRI data because the quality of the procedure does not vary much, prices do differ. That could make an MRI the kind of service people would want to compare. But if it doesn’t happen here, it most likely won’t happen in more complex procedures either, he said. Since 2013, new rules on transparency of healthcare prices have come into effect. For example, starting this year, hospitals must publicly publish the prices they will charge insurance companies and patients who pay cash for procedures. Patient advocates have said clear pricing is fine, but there is a limit to what can be achieved as health care costs rise. Cooper agrees with that point. “I don’t think it’s going to do any harm,” but he doesn’t think it will result in “any consumer revolution that transforms healthcare.” That is why it is important for referring physicians to be more aware of the potential savings.