Nov 22, 2019

Getting patients to price shop is hard

Illustration: Aïda Amer/Axios

The Trump administration argues its new price transparency rules will help patients shop for cheaper care and encourage insurers to make such shopping attractive.

Yes, but: Research shows most patients don't shop for care, even when tools exist to make it easier.

Driving the news: The administration proposed two price transparency regulations last week.

  • One finalized the requirement that hospitals disclose their negotiated prices.
  • The other proposed requiring insurers to do the same. It also would require insurers to make out-of-pocket spending information available to patients, which HHS says "would empower consumers to shop and compare costs between specific providers before receiving care."

The problem: Most patients haven't used cost-comparison tools when they've been made available in the past.

  • "It’s pretty difficult to get consumers to engage with price information and make decisions based on price information," said Sunita Desai, a professor at New York University.
  • These tools also don't lead to lower health spending, studies show.

The exception: Price transparency is more effective when paired with extra incentives to shop around — which the Trump administration addresses.

  • The proposed rule would allow insurers to count the savings generated by price shopping toward their medical loss ratio.
  • This could nudge plans to create new incentives for enrollees, although this is only one of the reasons why insurers may have limited incentives to get patients to price shop.

None of this matters much in places where providers have monopolies, as patients don't have any choice about where they get their care and thus can't shop around.

The bottom line: "The norms around how we get health care — how we use the internet to make health care-related decisions — [have] been changing," Desai said.

  • "It’s possible that having this information out there could over time start to change the way people make decisions.”

Go deeper

Hospitals vow to take Trump to court

Illustration: Aïda Amer/Axios

Hospitals immediately promised to sue the Trump administration after it released two new price transparency regulations on Friday, threatening the future of one of the president's most ambitious health policies.

Why it matters: Politically, the Trump administration could use a win: Most of its other signature health reforms either didn't come to fruition or are tied up in court.

Go deeperArrowNov 18, 2019

Hospitals are going to war against Trump's price transparency push

Illustration: Lazaro Gamio/Axios

Hospitals sued the Trump administration yesterday over its requirement that they disclose their negotiated rates, the latest of the industry's moves to protect itself from policy changes that could hurt its revenues.

Why it matters: Hospitals account for the largest portion of U.S. health costs — which patients are finding increasingly unaffordable.

Go deeperArrowDec 5, 2019

How employers could benefit from transparent health care prices

Illustration: Aïda Amer/Axios

Federal proposals that would require hospitals and health plans to publish their secretly negotiated prices may not do much to change individual behaviors, but companies that offer health insurance to employees could use that information to bargain for better rates and lower their health care expenses.

Where it stands: Employer groups are divided over the proposals, despite the potential upside.

Go deeperArrowNov 26, 2019