Transparency & Tradeoffs: Clinicians Can Help Patients Be Better Healthcare Consumers

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 - Anna D. Sinaiko, PhD
Anna D. Sinaiko, PhD, Harvard T.H. Chan School of Public Health, Boston | Photo copyright © Brown Dog Photo

Patients want healthcare cost information, but price lists alone aren’t turning them into savvy shoppers.

Consumer contradictions 

Anna D. Sinaiko, PhD, studies how patients shop for healthcare services, including how they use (and often don’t use) transparency tools to inform their decisions. An assistant professor of health policy and economics at the Harvard T.H. Chan School of Public Health in Boston, Sinaiko wants to understand how patients make choices as healthcare consumers—in other words, how they decide about tradeoffs they will or won’t make for convenience, quality and cost.

Patients and their families are more aware of healthcare costs than they were a decade ago, in part because their out-of-pocket expenses are greater now, Sinaiko says. “In the past, patients didn’t have a lot of incentive to think about healthcare costs,” she explains. “People with insurance didn’t pay that much out of pocket, or the cost to them was the same regardless of where they got medical care.” 

Now, patients are footing more of their healthcare bills, in the form of higher deductibles and copays and premiums. The majority of Americans say they want to know the price of medical services before they receive care and that they’re willing to shop for better-value services, according to a survey fielded by Public Agenda in 2014. Meanwhile, physicians indicate they want to help patients reduce their out-of-pocket spending (Gen Intern Med 2017;32[1]:81-7). 

Interestingly, the behaviors of both groups aren’t necessarily in harmony with what they’ve said. In a JAMA Internal Medicine commentary article, Sinaiko pointed out that studies conducted since 2000 have consistently shown that price information has little effect on physicians’ ordering behaviors (2017;177[7]:946-7). And, despite patients’ interest in shopping for value, use of price transparency tools has been low. For example, when Sinaiko and colleague Meredith Rosenthal, PhD, studied a web-based price estimator tool that Aetna offered to its beneficiaries, they found that only 3.5 percent of subscribers used the tool even once in the first two years it was available (Health Aff [Millwood] 2016;35[4]:662-70). 

Sinaiko talked with CVB about why transparency tools haven’t gotten much traction and how they might be improved. 

Why has the use of transparency tools like Aetna’s been low? 

It’s a combination of how, when and where information is delivered that is likely leading to low utilization of these tools, at least early on. First, with the first-generation price transparency tools that large insurance carriers and employers are offering, the consumer has to seek out the information, typically from the web. We’re not delivering the information when it’s really salient to patients. 

Second, cost is just one part of the puzzle. The results might have been different if patients had access to price estimates in the setting of a conversation with their clinicians—where they could explore the tradeoffs. They could ask, “If I go here, it costs less, but what does it mean on the quality side? Is it worth it to pay more if I don’t have to drive as far?” In other words, better quality information alongside cost information. And, finally, we need to recognize that people are using many different sources of price information, such as friends and family or calling their doctor’s office or insurance company. The tools haven’t been as popular. 

How do you envision clinicians helping patients with comparison shopping? 

Patients interact with multiple people during the care-seeking process. Some conversations need to be with their physician, and others don’t. Patients may be more comfortable talking with different office staff about spending. That’s important information we need to find out. Who on the care continuum will patients feel most comfortable talking with about spending and making these tradeoffs? 

Certainly, though, we would benefit if clinicians were engaged. We know patients make tradeoffs related to costs—whether it’s not filling a prescription or spreading a prescription out over two months vs. one or deciding not to get care. Clinicians could help patients navigate those decisions in ways that minimize harm. 

We also need to examine how to fit these conversations into the workflow of clinical care. When is the right time to talk about cost, and how do we make patients feel comfortable? We have to recognize that providers will have some information but they won’t know everything, so there will be limitations. The goal should be to provide a meaningful picture of price information that accounts for the uncertainty of medical care while also being informative for patients. And not just on where to go for care but also whether to go for care at all.

The people who used the Aetna price estimator tended to use it for “shoppable services,” such as preventive care, planned tests and procedures, routine office visits. Should transparency be a priority in urgent situations? 

There will be different transparency solutions for different contexts. With a non-emergent service, even advanced imaging and referrals, there typically is time for patients to make choices, so they could consider prices. And, while no one service is a huge portion of our healthcare spending, often the first service is an entry into a system of care. 

There is evidence that sites with lower prices for office visits also have lower episode spending. This suggests considering prices for non-emergent services could affect spending down the road. 

We’re also going to need to work on a set of transparency solutions to help clinicians think about where they’re referring their patients. And then there’s the high-cost, high-need population, where transparency might not be a solution. 

 - Health Saving

How much are transparency goals affected by patients’ health or financial literacy and by computer skills or access?

There are concerns about relying solely on technology to deliver price information or because not everyone has access. And there is evidence that people with low health or financial literacy are more likely to struggle with healthcare costs and that web-based technology might not be best for those groups. The question becomes what other modes can we use to deliver this information. We may need navigators for them. Multiple modes is probably the answer. Websites may be the answer for some people, but having a phone number to call will be important to bring transparency to as many people as we can.

Payers seem to be leading transparency efforts. Will hospitals and practices get on board?  

Payers have been the leaders because they’re trying to manage costs but also because they have the data that’s needed. They know what an individual’s benefit design is and where that person is in deductible spending for the year, which is needed to provide a personalized price estimate for a patient. But practices and health systems are responding, in part because of legislation moving in that direction. Massachusetts and Ohio both have laws mandating that price information be made available if patients request it. Ohio’s law hasn’t been implemented yet because it’s tied up in litigation.  

Where is your research going?

There are two themes we’re studying. One is how changes in benefit design, besides high deductibles, might impact patient behavior. For example, referenced-based pricing benefit design is benefit design that excludes a set of services from all regular cost sharing; these services aren’t part of the deductible, coinsurance or out-of-pocket maximum. Instead, the plan covers the cost of the service up to a reference price. If a patient goes to a facility that charges less than the reference price, it will be fully covered. If they go where the price is higher, they’re responsible for the differential. Instead of making patients responsible for the first dollar of the cost, it makes them responsible for the last dollar. We are studying if patients with this benefit design spend less on healthcare or are more likely to use transparency tools. 

The other area is the impact of having clinicians and patients engaged together in cost conversations, and in particular for certain conditions, such as cancer, where costs are high and variables are complex.

Final thoughts for clinicians?

Remember, the effort to improve price transparency in healthcare is a work in progress that will likely continue because of the financial pressure on healthcare spending. Clinicians and patients are going to feel more pressure to make informed decisions. Understanding the relative spending differences for their patients is going to be important for clinicians, even if knowing these differences down to the exact dollar is very challenging. 

Most important, we need to continue efforts to figure out what price information will improve decision-making and how to make it easy for clinicians and patients to access that information when they need it.