Why don’t more people shop for health care? Online tools exist, but most don’t use them
Three miles away, at
Most patients don't pay those charges, instead paying a sum based on rates negotiated between hospitals and health insurance companies. But even after those negotiations, stark differences often remain -- disparities that can hit the wallet hard.
Though consumers have long bemoaned rising health care costs, few people shop for health care the way they might shop for a car, comparing prices. Some don't realize a procedure can cost tens of thousands of dollars more at one hospital versus another. Others would rather rely on referrals or don't know where to go to find information. Hospital prices vary for a number of reasons, including differing overhead costs, market dynamics and, in some hospitals, a need to offset the costs of complex services by billing higher rates for simpler ones.
Now, the Trump administration wants to make it easier for patients to comparison shop for medical care, proposing a rule that would require hospitals to post their charges, before insurance, on their websites. The administration also is considering whether that posted information should reflect rates negotiated with insurers.
Some consumer advocates cheer the administration's proposal as a step toward greater price transparency. But hospitals and many experts say such a move likely wouldn't make much of a difference, pointing to existing online price comparison tools that often go unused by consumers. They also question the usefulness of posting charges before insurance.
"Everybody wants to try to find a path forward to increase price transparency, but it is very complex," said
Consumers who want to know how much a hospital procedure will cost already have a number of options.
They can call hospitals to get individual estimates, and sometimes, they can go to hospital websites. Late last year, west surburban hospital system
The
Insurers offer many of the most comprehensive price-comparison tools. In many cases, consumers can log onto their insurance companies' websites to compare their individual, out-of-pocket costs for procedures at different hospitals.
But most consumers don't.
It's not an uncommon result. Nationally, only about 20 percent of Americans have tried to compare prices before getting care, according to the results of a 2016 survey by Public Agenda, a
Experts chalk up the low numbers to several factors, including a lack of consumer knowledge, interest and time.
"A lot of it is member awareness," said Meier with
Also, for many consumers seeking health care, price isn't top of mind, said
Patients in the throes of a medical emergency don't have time to price shop. Those who do have time may trust only certain doctors. And in some cases, price shopping might not help a patient save money, Desai said. Finding a lower-cost service helps a patient only if that service costs less than his or her insurance deductible or out-of-pocket maximum.
"People aren't necessarily using them because, in some cases, they don't really have any incentive to do so," said
She didn't, however, shop around for a hospital before giving birth. She went to the hospital where her midwife practiced that also took her insurance. She assumed that regardless of where she went, childbirth would be so pricey that she'd hit her family's deductible. "With hospitals, they're expensive no matter what you're doing," Parsons said.
Other consumers don't see the upside of taking the time to shop around because they typically hit their deductibles or out-of-pocket maximums each year.
"It's kind of hard not to hit it, especially when dealing with a chronic illness," Vazquez said. "It's not something you can really think about."
Still, shopping for services can save cash across the health care system -- for patients, for their employers and for insurance companies, which foot large portions of patients' bills. Self-insured employers also pay much of their workers' health care bills. Employers that aren't self-insured may face higher rates from their insurers if their employees' medical claims climb.
So perhaps it's no surprise that many in health care are encouraging consumers to shop.
"People who use our tools save 36 percent over folks that don't use our tools," said
Research backs up the assertion that higher prices don't necessarily mean higher quality. Price differences often have to do with local market dynamics and negotiations between hospitals and insurers, Bisek said. Some hospitals are also more expensive than others because they have to offset the costs of treating complex patients, said Kraiss with the
But such pricing disparities aren't the main reason many hospitals don't post prices online, Kraiss said. Rather, hospitals have let insurers lead the way in offering price transparency tools because a patient's final bill depends largely on an insurance plan, she said.
Others, however, suspect hospitals don't make prices more accessible because they don't want to be put at a competitive disadvantage. Increasingly, providers other than hospitals offer straightforward services, such as MRIs, at relatively low costs. Those providers don't have to offset the costs of other services and can have lower overhead, said
He said greater price transparency in health care is long overdue and he hopes it encourages consumers to shop around.
"If I'm in the emergency room having bypass surgery, I'm not asking how much, but when it comes to things that are routine ... I'm going to shop because I can and I should," he said.
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