There's a fundamental problem with how we make decisions about our health care. We don't shop around.
I'm not talking about emergency care, which represents less than 2 percent of the nation's $2.1 trillion in health care expenditures. Instead, I'm speaking about the more common, routine care such as screenings, diagnostic tests, lab work, doctor visits, physical therapy, and scheduled surgeries.
Today, when most of us are told by a doctor that we need a routine procedure, we readily comply, without first getting a second-opinion, or researching the quality of the facility or physicians, or checking on the price and out-of-pocket costs.
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But quality and price vary dramatically in health care – and often have no relation to each other. Even in the same geographic region, the cost for the exact same medical procedure can vary by hundreds, even thousands of dollars. We don't weigh our options, so we can overspend on our care. But even worse, we could have a bad result. I had a personal experience with a very large "surprise" bill.
Employers, who still pay a significant portion of health care costs for their employees, have a vested interest in creating a shopping culture in health care – and could be the best place to start. By providing communications, incentives, and information to educate employees about the significant cost variations and encouraging them to becoming smarter consumers in selecting high-value health care, employers have an opportunity to drive real savings across the system.
The fact is that changing behavior is hard. Efforts to create health care consumers through high-deductible health plans have largely failed.
Instead of spurring people to shop, recent studies show the additional cost-burden of these plans has resulted in people deferring care, which can potentially be costlier in the long run.
But employers and the power of group dynamics within a workforce are wonderful agents to drive change. And new health care transparency programs are leveraging the change-promoting forces of corporate environments – peer pressure, community support, multiple communication outlets – along with rewards and incentives to create powerful motivators to drive change.
Furthermore, employers have several channels to communicate with employees. Emails, employee meetings and events, break room flyers, posters, contests, and even paystub reminders can all effectively communicate important information about the benefits of shopping for care. And never underestimate the power of the water cooler conversation!
Add to that incentives for people choosing lower-cost care, and employees start to notice. Incentives disrupt the normal referral process, causing employees to pause and consider their choices – even when there's no deductible. For instance, where a referral to a particular facility for an MRI may have previously gone unquestioned, a company offering $150 in cash for shopping for a lower-cost option will more likely prompt their employees to ask, "Is that my best option?"
Coincidentally, my surprise bill was for an MRI that cost $3,500. I wish I had stopped to shop, and consider my choices.
Shopping around is no doubt time-consuming, but most of us are experts at it. We know how to scour sales, clip coupons, and comparison-shop to save a few bucks here and there. And online shopping makes it easy to compare costs and quality ratings in just a few minutes with a few keyboard clicks. But we've been blindly acquiescing when directed to specific locations for health care procedures and tests that can cost us thousands more than we need to spend.
Shopping has the power to save consumers and their employers millions of dollars. According to Vitals' SmartShopper 2016 Book of Business report, people who shopped for MRIs saved $586 on average. Considering over 34.7 million MRIs are performed each year, there's the potential to save over $20 billion on high-quality, lower-priced MRIs alone.
The best shot at reaching that goal is through work organizations that can stimulate change by both targeting individuals and relying on interpersonal interactions. Jane Gile, Human Resource Director for the City of Manchester, says both are necessary to effect change.
On the one hand, the City of Manchester can send targeted mailings to employees receiving Remicade, an expensive infusion therapy used to treat Crohn's disease and rheumatoid arthritis. The drug can cost upwards of $20,000 when administered in a hospital setting and less than $4,000 at a medical office. Through the city's incentive and transparency program, employees were offered $500 to switch to a lower-cost facility. To date, 53 percent of employees receiving the drug have switched, saving the City of Manchester over $122,000 in 2015 on one drug alone.
For more common procedures, Gile says that employees who learn about the program through corporate communications, amplify usage through word-of-mouth. She says existing employees tell the new employee, "You could have earned $100 for that procedure."
Those open dialogues about health care need to happen more frequently. According to the Altarum Institute, fewer than 50 percent of consumers have ever asked about the price of a health care service before receiving the service.
But physicians look after our health – not our purse, or the corporate wallet either. We need to take the initiative to shop if we want to save money on our health care.
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