One distinctive transparency tool managed to garner significant savings and very high utilization, the company reports.


May 19—As new research found one price transparency tool appeared to increase spending, another tool gained wide use and cut costs.

Healthcare spending among 148,655 employees of two large companies that were offered a price transparency tool actually increased compared with 295,983 employees at companies not offered the tool during a recent one-year period, a May study in JAMA found.

Mean outpatient spending increased by $212 among employees offered the tool and by $153 among a control group, Harvard researchers found. After adjusting for demographic and health characteristics, the authors concluded that the tool’s availability was associated with a mean $59 increase in outpatient spending. Mean out-of-pocket (OOP) outpatient spending increased by $55 among those offered the tool and by $30 among those without an available tool. The offer of a price transparency tool was associated with a mean $18 increase in OOP spending after adjustment for various factors.

Further, the study found that providing a price transparency tool was not associated with lower outpatient spending among employees with higher health plan deductibles and those with initial comorbidities. Also, no shift among those offered the price transparency tool was found from higher-priced hospital outpatient department settings to lower-priced ambulatory settings.

Another big blow to the price transparency tool was that only 10 percent of employees used it at least once.

The results left some price transparency advocates wondering why the results apparently ran counter to the promise of lower spending, which has been found in previous research on price transparency tools. It’s an important question because nearly 43 percent of the $524.2 billion spent on health care by individuals with employer-sponsored insurance is attributable to shoppable services, according to a recent report.

Another Experience

Some of the limitations of the tool studied by the Harvard researchers become clear when examining another available tool.

Change Healthcare has found sharply different results with its price transparency tool, which differs in important ways from the one in the JAMA study. For instance, the Change Healthcare tool includes quality data.

The Harvard researchers worried that some tool users may have used high provider costs as a surrogate for quality—although research has found no correlation. Such thinking by shoppers is certainly plausible, Tate McDaniel, a senior vice president at Change Healthcare, said in an interview.

“If all you’re going on is cost, then I’m not surprised some people may have associated higher cost with quality,” McDaniel said.

In a case study posted on its website, Change Healthcare studied the three-year results from one client using its tool. One important difference from the Harvard study was that 90 percent of the 15,000 employees used it. And 66 percent acted on information provided to make a related healthcare decision. That high utilization was credited to careful and ongoing education of health plan enrollees, as well as active support from the employer.

The Harvard researchers urged using tools to actively reach out to policyholders.

“Proactively contacting patients and providing information about less expensive care may be more effective than passively waiting for them to seek this information on their own via a website,” the researchers wrote.

An active approach was credited by McDaniel with much of the success of his tool, which the case study found provided the one employer with $1.1 million in claims-verified savings. Even better, it was credited with saving high-deductible health plan (HDHP) enrollees an average of $516 each year.

The active outreach came through “savings alerts,” which notify beneficiaries of specific potential savings based on likely health service or product use—gleaned from recent utilization—and how they can choose alternatives to obtain those savings.

Provider Efforts

Although Change Healthcare’s tool is primarily focused on self-insured employers and insurers, many providers are making efforts to improve their price transparency with patients, according to a recent survey.

Most providers (88 percent) have developed the capability to offer patients estimates at the time of service, according to a recent Navicure survey of 300 providers, most of which were physician offices.

The onus to provide such estimates has grown as employers and insurers have shifted a growing share of healthcare costs onto individuals. That shift was evident in the 43 percent of survey respondents who said at least 20 percent of their revenue comes from patients.

“There’s obviously been a real shift in the industry in terms of providers expecting more revenue from their patients,” Jeff Wood, a vice president at Navicure, said in an interview.

Wood credited much of that revenue shift to the surge in HDHP enrollment. The share of policyholders who have employer-sponsored insurance and are enrolled in HDHPs has steadily increased in recent years, reaching 28 percent of employees in 2015, according to an annual Mercer survey released this week. Additionally, non-group HDHPs covered 49 percent of all non-group enrollees in 2016, up from 36 percent in 2015, according to the latest national survey by the Kaiser Family Foundation.

Another factor driving provider focus on the issue is that more than half of all states have enacted laws establishing price transparency websites or requiring plans, hospitals, or physicians to provide price information to patients.

For instance, Navicure has seen a surge of interest among Florida hospitals in its payment-processing tools for use by patients after the state enacted a price transparency law in April, which among other provisions required hospitals to list estimated payment ranges for each service bundle.

“That’s definitely the wave of the future,” Wood said.

Among areas where the Navicure survey indicated providers should improve their transparency efforts was in offering estimates to patients at the time of service. Forty-four percent indicated they provide such estimates only “sometimes.”


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C. office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Thursday, May 19, 2016