Making health services prices available linked to lower total claims payments

October 21, 2014, The JAMA Network Journals

Searching a health service pricing website before using the service was associated with lower payments for clinical services such as advanced imaging and laboratory tests, according to a study in the October 22/29 issue of JAMA.

Recent changes in the insurance market have resulted in commercially insured patients bearing a greater proportion of their . As patients have an increasing responsibility to pay for their care, they will likely demand access to prices charged for that care. Several state-administered initiatives have increased price transparency by reporting hospital charges or average reimbursement rates. Pricing information made available to patients reflects actual out-of-pocket costs for each individual patient by accounting for billed charge discounts, health benefit design, and deductibles, according to background information in the article.

Neeraj Sood, Ph.D., of the University of Southern California, Los Angeles, Christopher Whaley, B.A., of the University of California, Berkeley, and colleagues examined the association between the availability of health service prices to patients and the total claims payments (the total amount paid by patient and insurer) for these services (, services and clinician office visits). Payments for clinical services provided were compared between patients who searched a pricing website before using the service with patients who had not researched prior to receiving this service. The study included medical claims from 2010-2013 of 502,949 patients who were insured in the United States by 18 employers who provided a price transparency platform to their employees.

The researchers found that patients who searched the platform 14 days before receiving care had lower claim payments than those who did not. Adjusted payments were approximately 14 percent lower for laboratory tests, 13 percent lower for advanced imaging, and 1 percent lower for clinician office visits, with the relative differences translating into lower absolute dollar payments of $3.45 for laboratory tests, $124.74 for advanced imaging, and $1.18 for clinician office visits.

In the period before either group had access to the price transparency platform, payments for searchers were about 4 percent higher for laboratory tests and 6 percent higher for advanced imaging but were 0.26 percent lower for clinician office visits than for nonsearchers.

The authors write that tools such as this price transparency platform may affect use of care. "For example, knowing that some prices are very high, some patients may forego care. Conversely, cost savings from price shopping might enable patients to increase use, which may lead to improved adherence to recommended treatments but also to overuse of services. For this reason, our study cannot determine whether the price transparency technology reduces overall health care spending. Future research should extend this analysis to services beyond the three used in this study. It should also examine how use is affected to better understand the broader effect of price transparency on and population health."

"The findings reported by Whaley et al indicate that price transparency works as economists would expect it would," writes Uwe E. Reinhardt, Ph.D., of Princeton University, Princeton, N.J., in an accompanying editorial.

"However, one important caveat on must be registered. As Brand et al of the Federal Trade Commission properly have noted, greater transparency about prices and quality in health care are not helpful if the relevant market for health care is monopolized. Transparency can promote savings and encourage better quality only if there are enough competing entities that provide health care in a market. It is a point that is sometimes overlooked but is an essential ingredient for to benefit from knowing the price and quality of the health care services they purchase."

Explore further: Transparency key to improving value care for patients

More information: DOI: 10.1001/jama.2014.13373
DOI: 10.1001/jama.2014.14276

Related Stories

Transparency key to improving value care for patients

May 29, 2013
(HealthDay)—In order to ensure the provision of higher quality care and cost control in a post-Affordable Care Act health care system, data on price, utilization, and quality should be made publicly available unless there ...

Task force recommends ways to improve price transparency

April 22, 2014
(HealthDay)—Price transparency frameworks, which provide price information presented in the context of other relevant information, should be developed to meet patients' needs, according to recommendations presented in a ...

Information technologies could remove the 'shroud of secrecy' draped across private health care cost

December 2, 2013
The "shroud of secrecy" once draped across private health care service costs could be lifted with innovative information technologies, Princeton University professor Uwe Reinhardt wrote in a review published by the Journal ...

Study finds need for improvement on state health care price websites

June 18, 2013
"With rising health care costs and 30 percent of privately insured adults enrolled in high-deductible health care plans, calls for greater health care price transparency are increasing. In response, health plans, consumer ...

Medical patients aren't bargain hunters

April 3, 2013
Consumer-directed health plans (CDHPs) offer low premiums but high deductibles on the premise that patients who are faced with deductibles of $1,000 or more for individual coverage (or twice that for family coverage) will ...

Federal Drug Discount Program faces challenges, report finds

August 12, 2014
A federal program that provides billions in drug discounts to safety net hospitals and other health care providers is expanding under health care reform, but divergent views on the purpose and future scope of the program ...

Recommended for you

Juul e-cigarettes pose addiction risk for young users, study finds

October 19, 2018
Teens and young adults who use Juul brand e-cigarettes are failing to recognize the product's addictive potential, despite using it more often than their peers who smoke conventional cigarettes, according to a new study by ...

Adding refined fiber to processed food could have negative health effects

October 19, 2018
Adding highly refined fiber to processed foods could have negative effects on human health, such as promoting liver cancer, according to a new study by researchers at Georgia State University and the University of Toledo.

Self-lubricating latex could boost condom use: study

October 17, 2018
A perpetually unctuous, self-lubricating latex developed by a team of scientists in Boston could boost the use of condoms, they reported Wednesday in the journal Royal Society Open Science.

How healthy will we be in 2040?

October 17, 2018
A new scientific study of forecasts and alternative scenarios for life expectancy and major causes of death in 2040 shows all countries are likely to experience at least a slight increase in lifespans. In contrast, one scenario ...

Adequate consumption of 'longevity' vitamins could prolong healthy aging, nutrition scientist says

October 16, 2018
A detailed new review of nutritional science argues that most American diets are deficient in a key class of vitamins and minerals that play previously unrecognized roles in promoting longevity and in staving off chronic ...

Study finds evidence of intergenerational transmission of trauma among ex-POWs from the Civil War

October 16, 2018
A trio of researchers affiliated with the National Bureau of Economic Research has found evidence that suggests men who were traumatized while POWs during the U.S. Civil War transmitted that trauma to their offspring—many ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.