Promise and Reality of Price Transparency

Employer Strategies for Health Care Price Transparency

This paper describes hospital, insurance, and pharmaceutical price transparency policies and applications in the United States and in selected countries around the world. Many of these policies apply to self-insured employers. So far, the experience in the United States and elsewhere is clear that federal and state price transparency regulations have had little impact on whether employees or dependents search for low-cost or high-quality providers or on the cost and quality of their health care. This is because of weak regulatory oversight, conflicting federal and state reporting requirements, and few economic incentives for providers and insurance companies to supply easily readable or analyzable price information. However, price transparency requirements are here to stay. This paper therefore offers several recommendations to maximize the utility of price transparency tools provided for employees and other insureds, by their employers, providers, commercial insurance carriers, or technology firms. From a policy perspective, coupling reporting requirements with clearer technological guidance and much stronger regulatory oversight would increase the utility of price transparency efforts. For individual employers, the impact of price transparency efforts may increase by coupling price transparency tools with health plan network and design strategies, behavioral economic nudges, and programs designed to improve health, well-being, and quality of care. Many program vendor partners, consultants, and actuarial, technology, and research firms can help make these efforts useful.

Price Transparency in United States' Health Care: A Narrative Policy Review of the Current State and Way Forward

Health care price transparency is gaining momentum as a tangible policy intervention that can unleash market principles to increase competition, help begin to decrease U.S. health care expenditures, and provide Americans with access to affordable, high-quality health care. Indeed, pricing reform is required to facilitate patient shopping in health care. In this narrative policy review, we offer a brief history of health care price transparency efforts and an overview of the health care price transparency literature. Further, we highlight the current rules and legislative initiatives aimed at achieving the full potential of health care price transparency. Lastly, we offer key takeaways and highlight suggestions for future policy directions, including the need to ensure hospital and insurance compliance through more appropriate penalties and incentives, importance of reducing regulation to promote financial upside that can be obtained by both patients and providers who actively promote shopping for lower cost, higher quality health care goods and services, and the need for transparent and easily found quality metrics, including outcomes most important to patients, driven by physicians "on the ground" with patient input.

How much are patients willing to pay for spine surgery? An evaluation of attitudes toward out-of-pocket expenses and cost-reducing measures

BACKGROUND CONTEXT

With rising healthcare expenditures in the United States, patients and providers are searching to maintain quality while reducing costs.

PURPOSE

The aim of this study was to investigate patient willingness to pay for anterior cervical discectomy and fusion (ACDF), degenerative lumbar spinal fusions (LF), and adult spine deformity (ASD) surgery.

STUDY DESIGN/SETTING

A survey was developed and distributed to anonymous respondents through Amazon Mechanical Turk (MTurk).

METHODS

The survey introduced 3 procedures: ACDF, LF, and ASD surgery. Respondents were asked sequentially if they would pay at each increasing price option. Respondents were then presented with various cost-saving methods and asked to select the options that made them most uncomfortable, even if those would save them out-of-pocket costs.

RESULTS

In total, 979 of 1,172 total responses (84%) were retained for analysis. The average age was 36.2 years and 44% of participants reported a household income of $50,000 to 100,000. A total of 63% used Medicare and 13% used Medicaid. A total of 40% stated they had high levels of financial stress. A total of 30.1% of participants were willing to undergo an ACDF, 30.3% were willing to undergo a LF, and 29.6% were willing to undergo ASD surgery for the cost of $3,000 (p=.98). Regression demonstrated that for ACDF surgery, a $100 increase in price resulted in a 2.1% decrease in willingness to pay. This is comparable to degenerative LF surgery (1.8% decrease), and ASD surgery (2%). When asked which cost-saving measures participants were least comfortable with for ACDF surgery, 60% stated "Use of the older generation implants/devices" (LF: 51%, ASD: 60%,), 61% stated "Having the surgery performed at a community hospital instead of at a major academic center" (LF: 49%, ASD: 56%), and 55% stated "Administration of anesthesia by a nurse anesthetist" (LF: 48.01%, ASD: 55%). Conversely, 36% of ACDF patients were uncomfortable with a "Video/telephone postoperative visit" to cut costs (LF: 51%, ASD: 39%).

CONCLUSIONS

Patients are unwilling to contribute larger copays for adult spinal deformity correction than for ACDF and degenerative lumbar spine surgery, despite significantly higher procedural costs and case complexity/invasiveness. Patients were most uncomfortable forfeiting newer generation implants, receiving the operation at a community rather than an academic center, and receiving care by physician extenders. Conversely, patients were more willing to convert postoperative visits to telehealth and forgo neuromonitoring, indicating a potentially poor understanding of which cost-saving measures may be implemented without increasing the risk of complications.

Variations in Payer-Negotiated Prices for Head and Neck Reconstructive Surgery

OBJECTIVE

Little is known about pricing for reconstructive procedures of the head and neck. As of January 2021, the Centers for Medicare and Medicaid Services requires hospitals to disclose payer-negotiated prices for services, offering new insight into prices for privately insured patients.

STUDY DESIGN

Cross-sectional analysis.

SETTING

Turquoise database.

METHODS

Payer-negotiated facility fees for 41 reconstructive surgeries were grouped by procedure type: primary closure, skin grafts, tissue rearrangement, locoregional flaps, or free flaps. Prices were normalized to account for local labor costs, then calculated as percent markup in excess of Medicare reimbursement. The mean percent markup between procedure groups was compared by the Kruskal-Wallis test. Subset analyses were performed to compare mean percent markup using a Student's t test. We also assessed price variation by calculating the ratio of 90th/10th percentile mean prices both across and within hospitals.

RESULTS

In total, 1324 hospitals (85% urban, 81% nonprofit, 49% teaching) were included. Median payer-negotiated fees showed an increasing trend with more complex procedures, ranging from $379.54 (interquartile range [IQR], $230.87-$656.96) for Current Procedural Terminology (CPT) code 12001 ("simple repair of superficial wounds ≤2.5 cm") to $5422.60 ($3983.55-$8169.41) for CPT code 20969 ("free osteocutaneous flap with microvascular anastomosis"). Median percent markup was highest for primary closure procedures (576.17% [IQR, 326.28%-1089.34%]) and lowest for free flaps (99.56% [37.86%-194.02%]). Higher mean percent markups were observed for rural, for-profit, non-Northeast, nonteaching, and smaller hospitals.

CONCLUSION

Wide variation in private payer-negotiated facility fees exists for head/neck reconstruction surgeries. Further research is necessary to better understand how pricing variation may correlate with out-of-pocket costs and quality of care.

Association Between Hospital Monopoly Status, Patient Socioeconomic Disadvantage, and Total Joint Arthroplasty Price Disclosure

INTRODUCTION

In recent years, healthcare institutions and regulatory bodies have enacted cost transparency mandates for routine interventions such as total hip arthroplasty and total knee arthroplasty. However, disclosure rates remain low. This study examined the effect of financial characteristics of hospitals and the socioeconomic status of patients on price disclosure.

METHODS

Hospitals conducting total hip arthroplasty/total knee arthroplasty, their quality ratings, and procedural volumes were identified using the Leapfrog Hospital Survey and linked to procedure-specific prices. Financial performance and the Area Deprivation Index (ADI) were used to correlate disclosure rates with hospital and patient characteristics. Hospital financial, operational, and patient summary statistics were compared by price-disclosure status using two-sample t -tests for continuous variables and Pearson chi-square test for categorical variables. The association between total joint arthroplasty price disclosure and hospital ADI was further evaluated using modified Poisson regression.

RESULTS

A total of 1,425 hospitals certified by the Centers for Medicare & Medicaid Services were identified in the United States. 50.5% (n = 721) of hospitals had no published payer-specific price information. Hospitals in an area of higher socioeconomic disadvantage were more likely to disclose prices of total joint arthroplasty (incidence rate ratio = 0.966, 95% CI: 0.937 to 0.995, P = 0.024). Hospitals that were considered monopolies or were for-profit were less likely to disclose prices (IRR = 1.15, 95% CI: 1.030 to 1.280, P = 0.01; IRR = 1.256, 95% CI: 0.986 to 1.526, P = 0.038, respectively). When accounting for both ADI and monopoly status, hospitals with patients who had a higher ADI were more likely to disclose costs for a total joint arthroplasty, whereas for-profit hospitals or hospitals considered monopolies in their HSA were less likely to disclose prices.

DISCUSSION

For nonmonopoly hospitals, a higher ADI correlated with a higher likelihood of price disclosure. However, for monopoly hospitals, there was no significant association between ADI and price disclosure.

LEVEL OF EVIDENCE

II.

The Future of State All-Payer Claims Databases

State policy makers are under increasing pressure to address the prohibitive cost of health care given the lack of action at the federal level. In 2020, the United States spent more on health care than any other country in the world-$4.1 trillion, representing 19.7% of the nation's gross domestic product. States are trying to better understand their role in health care spending and to think creatively about strategies for addressing health care cost growth. One way they are doing this is through the development and use of state-based all-payer claims databases (APCDs). APCDs are health data organizations that hold transactional information from public (Medicare and Medicaid) and private health insurers (commercial plans and some self-insured employers). APCDs transform this data into useful information on health care costs and trends. This article describes states' use of APCDs and recent efforts that have provided benefits and challenges for states interested in this unique opportunity to inform health policy. Although challenges exist, there is new funding for state APCD improvements in the No Surprises Act, and potential new federal interest will help states enhance their APCD capacity so they can better understand their markets, educate consumers, and create actionable market information.

Does price disclosure in pharmaceutical advertising result in price transparency? Evidence from a randomized experiment

Background

Policies that mandate list price disclosure in direct-to-consumer pharmaceutical advertising (DTCPA) cite price transparency among the benefits. The expectation is that price transparency will lead to changes in consumer behavior that will ultimately lower healthcare costs.

Objective

The objective of this study was to assess the impact of price transparency on perceived level of information and consumer behaviors, specifically intentions to seek treatment and intentions to comparison shop.

Methods

A nine-arm randomized experiment was conducted to expose respondents to television advertisements for prescription drugs that varied by price disclosure type (no price/control, list price only, or price plus, which disclosed the list price and typical out-of-pocket cost) and indicated condition (deep vein thrombosis/pulmonary embolism [DVT/PE], diabetes, or rheumatoid arthritis [RA]). The sample was recruited from US adult members of the nationally representative Amerispeak online panel.

Results

The sample included 2138 respondents. For ads featuring prescription drugs for DVT/PE, findings provide no evidence of an impact from price disclosure on perception of sufficient information. For ads for prescription drugs for diabetes, there was no evidence of an impact from list price only, but the price plus group was more likely than the control group to report the ad provided sufficient information (OR = 2.475). For ads for RA prescription drugs, both the list price only group (OR = 3.380) and price plus group (OR = 2.720) were more likely to report sufficient information than the control. Findings provide no evidence of an impact from price disclosure on consumer behaviors (i.e., intention to seek treatment or intention to comparison shop).

Conclusions

Mandatory DTCPA list price disclosure may not be the most effective tool for improving price transparency and affecting consumer behavior.

Socioeconomic status does not change decision-making in the treatment of distal radius fractures at a level 1 trauma center

Objectives

To compare operative rates, total hospital charges, and length of stay between different socioeconomic cohorts in treating distal radius fractures (DRFs).

Design

A retrospective cohort study.

Setting

Large public level 1 trauma center.

Patients

A retrospective search of all trauma activations over a 7-year period (2013-2020) yielded 816 adult patients diagnosed with DRF. Patients were separated into cohorts of socioeconomic status based on 2010 US Census data and insurance status.

Intervention

DRFs were treated either nonoperatively using closed reduction and splinting or operatively using open reduction and internal fixation, closed reduction percutaneous pinning, or external fixator application.

Main Outcome Measurements

Operative rates of DRF, total hospital charges, and length of stay.

Results

Patients who were uninsured or in the low-income socioeconomic cohort had no significant difference in operative rates, total hospital costs, or length of stay when compared with their respective insured or standard income groups. Younger patients and those with OTA/AO type C, bilateral, or open DRFs were more likely to undergo operative intervention.

Conclusions

This study demonstrates that low socioeconomic status based on annual household income and insurance status was not associated with differences in operative rates on DRFs, length of stay, or total hospital charges. These results suggest that outcome disparities between groups may be caused by postoperative differences rather than treatment decision-making. Although this study investigates access to surgical care at a publicly funded level 1 trauma center, disparities may still exist in other models of care.

Level of Evidence

Prognostic Level III.

Effects of Real-time Prescription Benefit Recommendations on Patient Out-of-Pocket Costs: A Cluster Randomized Clinical Trial

Importance

Rising drug costs contribute to medication nonadherence and adverse health outcomes. Real-time prescription benefit (RTPB) systems present prescribers with patient-specific out-of-pocket cost estimates and recommend lower-cost, clinically appropriate alternatives at the point of prescribing.

Objective

To investigate whether RTPB recommendations lead to reduced patient out-of-pocket costs for medications.

Design, Setting, and Participants

In this cluster randomized trial, medical practices in a large, urban academic health system were randomly assigned to RTPB recommendations from January 13 to July 31, 2021. Participants were adult patients receiving outpatient prescriptions during the study period. The analysis was limited to prescriptions for which RTPB could recommend an available alternative. Electronic health record data were used to analyze the intervention's effects on prescribing. Data analyses were performed from August 20, 2021, to June 8, 2022.

Interventions

When a prescription was initiated in the electronic health record, the RTPB system recommended available lower-cost, clinically appropriate alternatives for a different medication, length of prescription, and/or choice of pharmacy. The prescriber could select either the initiated order or one of the recommended options.

Main Outcomes and Measures

Patient out-of-pocket cost for a prescription. Secondary outcomes were whether a mail-order prescription and a 90-day supply were ordered.

Results

Of 867 757 outpatient prescriptions at randomized practices, 36 419 (4.2%) met the inclusion criteria of having an available alternative. Out-of-pocket costs were $39.90 for a 30-day supply in the intervention group and $67.80 for a 30-day supply in the control group. The intervention led to an adjusted 11.2%; (95% CI, -15.7% to -6.4%) reduction in out-of-pocket costs. Mail-order pharmacy use was 9.6% and 7.6% in the intervention and control groups, respectively (adjusted 1.9 percentage point increase; 95% CI, 0.9 to 3.0). Rates of 90-day supply were not different. In high-cost drug classes, the intervention reduced out-of-pocket costs by 38.9%; 95% CI, -47.6% to -28.7%.

Conclusions and Relevance

This cluster randomized clinical trial showed that RTPB recommendations led to lower patient out-of-pocket costs, with the largest savings occurring for high-cost medications. However, RTPB recommendations were made for only a small percentage of prescriptions.

Trial Registration

ClinicalTrials.gov Identifier: NCT04940988; American Economic Association Registry: AEARCTR-0006909.

Impact of Cost Information on Parental Decision Making: A Randomized Clinical Trial Evaluating Cast Versus Splint Selection for Pediatric Distal Radius Buckle Fractures

BACKGROUND

Price transparency purports to help patients make high-value health care decisions, however, there is little data to support this. The pediatric distal radius buckle fracture (DRBF) has 2 equally efficacious but not equally priced treatment options (cast and splint), serving as an excellent potential model for studying price transparency. This study uses the DRBF model to assess the impact of up-front cost information on a family's treatment decisions when presented with clinically equivalent treatment options for a low-risk injury.

METHODS

Participants age 4 to 14 presenting with an acute DRBF to a hospital-based pediatric orthopaedic clinic were recruited for this randomized controlled trial. Participants were randomized into cost-informed or cost-blind cohorts. All families received standardized information about the injury and treatment options. Cost-informed families received additional cost information. Both groups were allowed to freely choose a treatment. Families were surveyed regarding their decision factors. Cost-blinded families were subsequently presented with the cost information and could change their decision. Independent samples t tests and χ2 tests were utilized to evaluate differences.

RESULTS

A total of 127 patients were enrolled (53% cost-informed, 47% cost-blind). The 2 groups did not significantly differ in demographics. Immobilization selection did not differ between groups, with 48% of the cost-informed families selecting the more expensive option (casting), compared with 47% of the cost-blind families. Cost was the least influential factor in the decision-making process according to participant survey, influencing only 9% of families. Only one family changed their decision after receiving cost information, from a splint to a cast.

CONCLUSION

Families appear to be cost-insensitive when making medical treatment decisions for low-risk injuries for their child. Price transparency alone may not help families arrive at a decision to pursue high-value treatment in low-risk orthopaedic injuries.

LEVEL OF EVIDENCE

Level I.

Concordance of Disclosed Hospital Prices With Total Reimbursements for Hospital-Based Care Among Commercially Insured Patients in the US

Importance

To improve health care price transparency and promote cost-conscious selection of health care organizations and practitioners, the Centers for Medicare & Medicaid Services (CMS) required that hospitals share payer-specific negotiated prices for selected shoppable health services by January 2021. While this regulation improves price transparency, it is unclear whether disclosed prices reflect total costs of care, since many hospital-based services are delivered and billed separately by independent practitioners or other health care entities.

Objective

To assess the extent to which prices disclosed under the new hospital price transparency regulation are correlated with total costs of care among commercially insured individuals.

Design, Setting, and Participants

This cross-sectional study used a large database of commercial claims from 2018 to analyze encounters at US hospitals for shoppable health care services for which price disclosure is required by CMS. Data were analyzed from November 2020 to February 2021.

Exposures

Whether the service was billed by the hospital or another entity.

Main Outcomes and Measures

Outcomes of interest were the percentage of encounters with at least 1 service billed by an entity other than the hospital providing care, number of billing entities, amounts billed by nonhospital entities, and the correlation between hospital and nonhospital reimbursements.

Results

The study analyzed 4 545 809 encounters for shoppable care. Independent health care entities were involved in 7.6% (95% CI, 6.7% to 8.4%) to 42.4% (95% CI, 39.1% to 45.6%) of evaluation and management encounters, 15.9% (95% CI, 15.8% to 16%) to 22.2% (95% CI, 22% to 22.4%) of laboratory and pathology services, 64.9% (95% CI, 64.2% to 65.7%) to 87.2% (95% CI, 87.1% to 87.3%) of radiology services, and more than 80% of most medicine and surgery services. The median (IQR) reimbursement of independent practitioners ranged from $61 ($52-$102) to $412 ($331-$466) for evaluation and management, $5 ($4-$6) to $7 ($4-$12) for laboratory and pathology, $26 ($20-$32) to $210 ($170-$268) for radiology, and $47 ($21-$103) to $9545 ($7750-$18 277) for medicine and surgery. The reimbursement for services billed by the hospital was not strongly correlated with the reimbursement of independent clinicians, ranging from r = -0.11 (95% CI, -0.69 to 0.56) to r = 0.53 (95% CI, 0.13 to 0.78).

Conclusions and Relevance

This cross-sectional study found that independent practitioners were frequently involved in the delivery of shoppable hospital-based care, and their reimbursement may have represented a substantial portion of total costs of care. These findings suggest that disclosed hospital reimbursement was usually not correlated with total cost of care, limiting the potential benefits of the hospital price transparency rule for improving consumer decision-making.

Patient Perspectives on the Cost of Hand Surgery

BACKGROUND

Health-care expenditures in the U.S. are continually rising, prompting providers, patients, and payers to search for solutions to reduce costs while maintaining quality. The present study seeks to define the out-of-pocket price that patients undergoing hand surgery are willing to pay, and also queries the potential cost-cutting measures that patients are most and least comfortable with. We hypothesized that respondents would be less accepting of higher out-of-pocket costs.

METHODS

A survey was developed and distributed to paid, anonymous respondents through Amazon Mechanical Turk. The survey introduced 3 procedures: carpal tunnel release, cubital tunnel release, and open reduction and internal fixation of a distal radial fracture. Respondents were randomized to 1 of 5 out-of-pocket price options for each procedure and asked if they would pay that price. Respondents were then presented with various cost-saving methods and asked to select the options that made them most uncomfortable, even if those would save them out-of-pocket costs.

RESULTS

There were 1,408 respondents with a mean age of 37 years (range, 18 to 74 years). Nearly 80% of respondents were willing to pay for all 3 of the procedures regardless of which price they were presented. Carpal tunnel release was the most price-sensitive, with rejection rates of 17% at the highest price ($3,000) and 6% at the lowest ($250). Open reduction and internal fixation was the least price-sensitive, with rejection rates of 11% and 6% at the highest and lowest price, respectively. The use of older-generation implants was the least acceptable cost-cutting measure, at 50% of respondents.

CONCLUSIONS

The present study showed that most patients are willing to pay a considerable amount of money out of pocket for hand surgery after the condition, treatment, and outcomes are explained to them. Furthermore, respondents are hesitant to sacrifice advanced technology despite increased costs.

Regulating Hospital Prices Based On Market Concentration Is Likely To Leave High-Price Hospitals Unaffected

Concern about high hospital prices for commercially insured patients has motivated several proposals to regulate these prices. Such proposals often limit regulations to highly concentrated hospital markets. Using a large sample of 2017 US commercial insurance claims, we demonstrate that under the market definition commonly used in these proposals, most high-price hospitals are in markets that would be deemed competitive or "moderately concentrated," using antitrust guidelines. Limiting policy actions to concentrated hospital markets, particularly when those markets are defined broadly, would likely result in poor targeting of high-price hospitals. Policies that target the undesired outcome of high price directly, whether as a trigger or as a screen for action, are likely to be more effective than those that limit action based on market concentration.

Patterns of Use of a Price Transparency Tool for Childbirth Among Pregnant Individuals With Commercial Insurance

IMPORTANCE

When introduced a decade ago, patient-facing price transparency tools had low use rates and were largely not associated with changes in spending. Little is known about how such tools are used by pregnant individuals in anticipation of childbirth, a shoppable service with increasing out-of-pocket spending.

OBJECTIVE

To measure changes over time in the patterns and characteristics of use of a price transparency tool by pregnant individuals, and to identify the association between price transparency tool use, coinsurance, and childbirth spending.

DESIGN, SETTING, AND PARTICIPANTS

This descriptive cross-sectional study of 2 cohorts used data from a US commercial health insurance company that launched a web-based price transparency tool in 2010. Data on all price transparency tool queries for 2 periods (January 1, 2011, to December 31, 2012, and January 1, 2015, to December 31, 2016) were obtained. The sample included enrollees aged 19 to 45 years who had a delivery episode during 2 periods (November 1, 2011, to December 31, 2012, or November 1, 2015, to December 31, 2016) and were continuously enrolled for the 10 months prior to delivery (N = 253 606).

EXPOSURES

Access to a web-based price transparency tool that provided individualized out-of-pocket price estimates for vaginal and cesarean deliveries.

MAIN OUTCOMES AND MEASURES

The primary outcomes were searches on the price transparency tool by delivery mode (vaginal or cesarean), timing (first, second, or third trimester), and individual characteristics (age at childbirth, rurality, pregnancy risk status, coinsurance exposure, area educational attainment, and area median household income). Another outcome was the association of out-of-pocket childbirth spending with price transparency tool use.

RESULTS

The sample included 253 606 pregnant individuals, of whom 131 224 (51.7%) were in the 2011 to 2012 cohort and 122 382 (48.3%) were in the 2015 to 2016 cohort. In the 2015 to 2016 cohort, the mean (SD) age was 31 years (5.2 years) and most individuals had coinsurance for delivery (94 251 [77.0%]). Price searching increased from 5.9% in the 2011 to 2012 cohort to 13.0% in the 2015 to 2016 cohort. In the 2015 to 2016 cohort, 43.9% of searchers' first price query was in their first trimester. The adjusted probability of searching was lower for individuals with a high-risk pregnancy due to a previous cesarean delivery (11.5%; 95% CI, 11.0%-12.1%) vs individuals with low-risk pregnancy (13.4%; 95% CI, 12.9%-14.0%). Use increased monotonically with coinsurance, from 9.2% (95% CI, 8.7%-9.8%) among individuals with no coinsurance to 15.0% (95% CI, 14.4%-15.5%) among individuals with 11% or higher coinsurance. After adjusting for covariates, searching was positively associated with out-of-pocket delivery episode spending. Among patients with 11% coinsurance or higher, early and late searchers spent more out of pocket ($59.57 [95% CI, $33.44-$85.96] and $73.33 [95% CI, $32.04-$115.29], respectively), compared with never searchers.

CONCLUSIONS AND RELEVANCE

The results of this cross-sectional study indicate that the proportion of pregnant individuals who sought price information before childbirth more than doubled within the first 6 years of availability of a price transparency tool. These findings suggest that price information may help individuals anticipate their out-of-pocket childbirth costs.

Price Transparency in Radiology-A Model for the Future

Medicine is the only business transaction in which consumers make important purchase decisions without knowing how much they have to pay. Lack of price transparency in health care imposes financial burden and anxiety among patients as the cost of health care has been shifting from employers to patients through high-deductible health plans (HDHPs). Health economists and policymakers anticipated that HDHPs with price transparency would be a catalyst for patients to "shop" for low-price providers, thus reducing overall health care spending. For patients to shop health care services, price transparency is a requisite. The Department of Health and Human Services mandate of publicly disclosing the hospital chargemaster and state legislatures demanding greater health care price transparency are just two examples of external forces challenging the long history of price opacity in health care. Imaging, pharmacy, laboratory tests, and ambulatory surgeries are considered potentially shoppable health care services. This article examines the intended motivation of price transparency, the limitations of current price transparency tools, and what impact price transparency may have on radiology. We share our experience in developing and implementing University of Utah's online interactive price transparency tool to estimate patients' out-of-pocket expenses.

The Influence of Cost Information on Treatment Choice: A Mixed-Methods Study

PURPOSE

To test the null hypothesis that exposure to societal cost information does not affect choice of treatment for carpal tunnel syndrome (CTS).

METHODS

We enrolled 304 participants using the Amazon Mechanical Turk platform to complete a survey in which participants were given the choice between carpal tunnel release (CTR) or a less-expensive option (orthosis wear) in a hypothetical mild CTS scenario. Patients were randomized to receive information about the societal cost of CTR (cost cohort) or no cost information (control). The primary outcome was the probability of choosing CTR measured on a 6-point ordinal scale. We employed qualitative content analysis to evaluate participants' rationale for their choice. We also explored agreement with various attitudes toward health care costs on an ordinal scale.

RESULTS

Participants in the cost cohort exhibited a greater probability of choosing surgery than those in the control cohort. The relative risk of choosing surgery after exposure to societal cost information was 1.43 (95% confidence interval, 1.11-1.85). Among participants who had not previously been diagnosed with CTS (n = 232), the relative risk of choosing surgery after exposure to societal cost information was 1.55 (95% confidence interval, 1.17-2.06). Lack of personal monetary responsibility frequently emerged as a theme in those in the cost cohort who chose surgery. The majority (94%) of participants expressed at least some agreement that health care cost is a major problem whereas only 58% indicated that they consider the country's health care costs when making treatment decisions.

CONCLUSIONS

Participants who received societal cost information were more likely to choose the more expensive treatment option (CTR) for mild CTS.

CLINICAL RELEVANCE

Exposure to societal cost information may influence patient decision making in elective hand surgery. A complete understanding of this influence is required prior to implementing processes toward greater cost transparency for diagnostic/treatment options. Sharing out-of-pocket costs with patients may be a beneficial approach because discussing societal cost information alone will likely not improve value of care.

Association of a national insurer's reference-based pricing program and choice of imaging facility, spending, and utilization

OBJECTIVE

To examine the association of a national insurer's reference-based pricing (RBP), program for outpatient advanced imaging-a benefit design to encourage patients to choose lower-price facilities.

DATA SOURCE/STUDY SETTING

Administrative and medical claims data for three self-insured employers that introduced RBP and a comparison group without RBP.

STUDY DESIGN

Difference-in-difference comparison of pre-RBP (2014) and post-RBP (2015-6) care between intervention and comparison groups.

DATA COLLECTION/EXTRACTION METHOD

We identified 137 680 imaging procedures (4602 intervention group; 133 078 comparison group) in 2014-2016.

PRINCIPAL FINDINGS

In the first post-RBP year (2015), there was no change in choice of facility; by the second year, RBP-exposed enrollees were 21.9 pp (95% CI: 18.5, 25.3) more likely to choose a lower-priced facility and net prices were $101.05 (95% CI: -$130.65, -$71.46), a difference of 8.1 percent lower. RBP was associated with higher patient out-of-pocket spending in the first post-RBP year ($31.82; 95% CI: $10.91, $52.73). There was no change in utilization, and higher-priced providers did not lower prices in the postperiod. Net savings represented 0.3 percent of outpatient spending.

CONCLUSIONS

Reference-based pricing for advanced imaging was associated with a shift to lower-priced facilities, but net impact on outpatient spending was modest. Patients paid increased out-of-pocket costs, though the amount declined after the first year of the program.

Marketwide Price Transparency Suggests Significant Opportunities For Value-Based Purchasing

The extent of price variation across a local market has important implications for value-based purchasing. Using a new data set containing health care prices for nearly every insurer-provider-service triad across a large local market, we comprehensively examined variation in fee-for-service paid commercial prices in Massachusetts for 291 predominantly outpatient medical services. Prices varied considerably across hospital service areas. Prices for medical services at acute hospitals were, on average, 76 percent higher than at all other providers. The service categories with the widest price variation were ambulance/transportation services, physical/occupational therapy, and laboratory/pathology testing. In this market, simulations suggested that steering patients toward lower-price providers or setting price ceilings could generate potential savings of 9.0-12.8 percent. Marketwide price information at the insurer-provider-service level could help target policy interventions to reduce health care spending.

Using Public Cost Information During Low Back Pain Visits: A Qualitative Study

BACKGROUND

Patients desire information about health care costs because they are increasingly responsible for these costs. Public Web sites that offer cost information could inform provider-patient discussions of costs at the point of care.

OBJECTIVE

To evaluate tools to facilitate the use of publicly available cost information during clinical visits for low back pain (LBP).

DESIGN

Qualitative study using individual and group interviews and surveys.

SETTING

6 rural primary care practices in 2 health systems in Maine.

PARTICIPANTS

Practice staff (n = 50) and adult patients with LBP (n = 72).

INTERVENTION

Participating health systems and practices were offered financial incentives, a series of trainings, and technical assistance to pilot tools for discussing costs of LBP care using CompareMaine.org, Maine's cost and quality transparency Web site.

MEASUREMENTS

Integration of tools into workflow, awareness and value to providers, and patient experience were identified through 11 group interviews with practice staff (n = 25) and health system leaders (n = 11), provider (n = 25), and patient (n = 47) surveys; patient interviews (n = 5); and administrative data.

RESULTS

The intervention increased provider and consumer awareness of CompareMaine.org, but minimally changed use in clinical discussions as a result of fewer-than-expected patients with LBP, limited system support, workflow barriers, and providers' reluctance to adopt the tools because of perceptions of limited value for their patients. In contrast, patients valued cost conversations and found the tools useful, and over one half reported intending to use CompareMaine.org during future care decisions.

LIMITATIONS

Generalizability was limited by the small number of practices and participants. Lower-than-anticipated participation precluded examination of the effect of the tool on the frequency of cost-of-care conversations.

CONCLUSION

This multicomponent intervention to introduce publicly reported cost information into LBP clinical discussions had low provider uptake. Whereas cost conversations and CompareMaine.org were perceived as useful by participating patients with LBP, providers were uncomfortable discussing cost variation at the point of care. Successful use of public cost information during clinical visits will require normalizing use to a broader group of patients and greater provider outreach and health system engagement.

PRIMARY FUNDING SOURCE

Robert Wood Johnson Foundation.

Surgeons and Surgical Trainees Underestimate the Total Charges and Reimbursements Associated With Commonly Performed General Surgery Procedures✰

INTRODUCTION

Surgical care contributes significantly to the fiscal challenges facing the US health care system. Multiple studies have demonstrated surgeons' lack of awareness of the costs associated with individual portions of surgical care, namely operating room supplies. We sought to assess surgeon and trainee awareness of the comprehensive charges and reimbursements associated with procedures they perform.

METHODS

We administered a voluntary anonymous survey to attending surgeons, general surgery residents, and fourth-year medical students who applied to general surgery residencies. We compared charge and reimbursement estimates for laparoscopic cholecystectomy and open inguinal hernia repair to the actual values. Additionally, we assessed the importance placed on the financial aspects of surgical care.

RESULTS

We had an overall response rate of 94% (n = 45). A majority of attendings, residents, and medical students underestimated charges and reimbursements for open inguinal hernia repair and laparoscopic cholecystectomy. There was no significant difference in the accuracy of charge or reimbursement estimates between attendings, residents, and students for herniorrhaphy or cholecystectomy (Charge: hernia p = 0.08, cholecystectomy p = 0.30; Reimbursement: hernia p = 0.47, cholecystectomy p = 0.89). Years of training as an attending or resident did not predict accuracy of charge or reimbursement estimates for hernia repair or cholecystectomy (p > 0.3 for all regressions). The median (interquartile range) charge estimate for inguinal hernia repair was -$5914 (-$7914 to -$2914) from the actual charge, 45.8% of the true value, and the median reimbursement estimate was -$4519 (-$5369 to -$1218) from actual reimbursement, 27.3% of the true value. The median charge estimate for cholecystectomy was -$5734 (-$8733 to +$1266) from the actual charge, 58.3% of the true value, and the median reimbursement estimate was -$4847 (-$6847 to +$153) from actual reimbursement, 38.2% of the true value.

CONCLUSIONS

Surgeons and their trainees underestimate the charges and reimbursements associated with commonly performed procedures.

Patients' preferences over care settings for minor illnesses and injuries

OBJECTIVES

To identify consumers' preferences over care settings, such as physicians' offices, emergency rooms (ERs), urgent care centers, retail clinics, and virtual physicians on smartphones, for minor illnesses.

DATA SOURCES

A survey conducted between 9/27/16 and 12/7/16 emailed to all University of California, Irvine employees.

STUDY DESIGN

Participants were presented with 10 clinical scenarios and asked to choose the setting in which they wanted to receive care. We estimated multinomial conditional logit regression models, conditioning the choice on out-of-pocket costs, wait time, travel time, and chooser characteristics.

DATA COLLECTION

5451 out of 21 037 employees responded.

PRINCIPAL FINDINGS

Out-of-pocket costs and wait time had minimal impact on patient's preference for site of care. Choices were driven primarily by the clinical scenario and patient characteristics. For chronic conditions and children's well-visits, the doctor's office was the preferred choice by a strong majority, but for most acute conditions, either the ER (for high severity) or urgent care clinics (for lower severity) were preferred to the office setting, particularly among younger patients and those with less education.

CONCLUSIONS

Patients have several alternatives to traditional physicians' offices and ERs. The low impact of out-of-pocket costs suggests that insurers interested in encouraging increased utilization of alternatives would need to consider substantial changes to benefit structure.

High-Deductible Health Plans and the Challenges They Pose to Radiologists

Patients with high-deductible health plans will increasingly be motivated to contact their hospitals or various websites to try to obtain information about the costs of expensive services like advanced imaging. Unfortunately, they will not find price transparency but rather confusion and opaqueness. Hospital personnel and commercial websites often unwittingly provide erroneous pricing information. The reasons for this are explained. Detailed examples of the erroneous information are provided. State-mandated websites may be somewhat of an improvement, but their methodology seems to vary from state to state, and they too can be confusing. All this obviously creates problems for patients, who are left not knowing what their true costs will be. The situation also creates problems for radiologists and their hospitals. Because of misunderstandings that can occur during the information-gathering phase, the pricing information shown for many hospital facilities may be greatly inflated, placing them at a competitive disadvantage. Certain strategic solutions to the problems are available, and these are discussed.