One of the big debates in Washington these days is how much “competitive market forces” can be used to reduce health care costs (see Dr. Rand Paul Unveils Obamacare Replacement Act and House G.O.P. Leaders Outline Plan to Replace Obama Health Care Act).
We’ve written before about how “consumerism” is a growing factor in the health care market due to consumers paying a higher proportion of the total health care bill in the U.S. – and plans with higher copayment and deductibles. The average annual deductible paid by single adults with employer-sponsored health insurance increased by 67% – from $646 in 2010 to $1,077 in 2015 (see The Challenges Of Rising Consumer Spending On Health Care). And, for consumers under age 65 with any private insurance, average annual OOP payments increased by 10.8%, from $592 in 2000 to $656 in 2014 (see Out-Of-Pocket Health Care Costs – Down For Most, Up For Some).
So I wasn’t surprised to read about a new Maine law, effective January of 2019, that mandates that health plans compensate small group members who find a lower than average price on common medical services (see New Maine Law Requires Health Plans To Pay The Difference To Members Who Find Better Prices On Certain Health Services). Here is how the comparison mechanism works – health plans with a linked health savings account must offer members use of a shopping tool to search for services by price and if the members can find the service they need (in Maine, Massachusetts, or New Hampshire) at a lower than average price, then the health plan pays the member a share of the difference.
Healthpayer Intelligence reports that in 2011, 23% of $524.2 billion in health care spending was related to “shoppable” services and that the seven percent that was out-of-pocket represents almost $28 billion that could have been reduced if consumers had more understanding of lower cost choices (see Price Transparency May Lower $27 Billion In Healthcare. On the other hand, Modern Healthcare highlights that it’s only seven percent of consumer out of pocket costs were for things that the consumers could have shopped and compared for (see Data Points: Comparison-Shopping Still A Challenge In Healthcare). Some other stats from that report that highlight the slow move to the cost transparency that will support more health care comparison shopping:
- 21% of consumers compare health care prices
- 56% of consumer look for health care prices information when seeking services
- 59% of consumers choose the less expensive health care option
I think we are a long way from knowing what this will look like in practice, but expect to see more price transparency in the years ahead. For more on this topic, check out these resources from the OPEN MINDS Industry Library:
- Promoting Transparency & Clear Choices In Health Care
- Is It Time For Some ‘Comparison Shopping’?
- Online Shopping Tools For Best Fit Health Insurance
- Public Performance Transparency As A Driver Of Performance Improvement
- Health Care Data Transparency Basics 2016
For more on how consumer relationships with health plans and provider organizations are changing, Elite-level OPEN MINDS Circle members can join my colleague Sarah Threnhauser and me for a free web briefing on September 21 – Forecasting The Future: What’s The Impact Of Health Care Technology For Consumers & The Service Delivery System.