Aug 23, 2019

How to make price transparency work for health care costs

There's a lot of skepticism about whether making prices more transparent will do anything to lower them, but there are ways to maximize the odds, Gilbert Benavidez and Austin Frakt write in JAMA Forum.

Driving the news: Both the Trump administration and Congress are pushing pricing transparency measures, banking on the idea that if consumers know how much health care services cost, they'll opt for the cheaper ones.

  • But this hasn't worked in the past. People who have access to price information rarely use it to shop around.
  • One study found that only 2% of people with access to price transparency tools actually used them.
  • This is even true for people with high deductibles.

The other side: Other incentives, when paired with transparency, actually do get people to shop for cheaper care.

  • The most effective seems to be reference pricing, in which payers set a maximum amount they'll reimburse for a shoppable service. Patients who use services that cost more than this maximum amount have to pay the difference out of pocket.
  • A slightly less effective tool is rewards programs, in which patients receive rebates when they use services below a set amount.
  • Between these 2 approaches, the stick works better than the carrot.

The bottom line: Getting the incentives right is important, but so far transparency is being pushed as a standalone approach.

Go deeper: Washington's favorite health policy isn't a silver bullet

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Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 12 p.m. ET: 5,449,135 — Total deaths: 345,721 — Total recoveries — 2,188,200Map.
  2. U.S.: Total confirmed cases as of 10 a.m. ET: 1,647,741 — Total deaths: 97,811 — Total recoveries: 366,736 — Total tested: 14,163,915Map.
  3. 2020: Trump threatens to move Republican convention from North Carolina.
  4. World: White House announces travel restrictions on Brazil Over 100 cases in Germany tied to single day of church services — Top Boris Johnson aide defends himself after allegations he broke U.K. lockdown
  5. Public health: Officials are urging Americans to wear masks over Memorial Day.
  6. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 2 hours ago - Politics & Policy