Study says better online transparency tools, apps could ease fear of lower-cost healthcare

You get what you pay for: That old saw applies to most corners of American consumerism, but not to healthcare. Convincing people of that is tough.

The research shows that most Americans believe more-expensive healthcare is usually better—an assumption that has become one major driver of unnecessary costs plaguing the U.S. healthcare system. And researchers say it will take more than just high out-of-pocket costs borne by consumers to change their views.

“People are afraid of the low-cost option because they are afraid of substandard care,” said Judith Hibbard, a senior researcher at the University of Oregon and renowned scholar on consumerism in healthcare, whose comments Tuesday came during a presentation in Chicago at the Operations and Technology Forum held by America's Health Insurance Plans.

The trick to alleviating the fear of lower-cost healthcare is to show Americans the cost of their care alongside the relevant quality rankings for potential providers they could visit. And many of the existing healthcare transparency tools could stand to improve in this regard, according to a study out Wednesday from Catalyst for Payment Reform, a not-for-profit organization that works on behalf of large employers and other healthcare purchasers.

By 2016, the “transparency” movement in healthcare, according to industry analysis cited in the study, is expected to grow into a $3 billion-a-year industry dedicated to trying to influence how Americans choose what healthcare to get, and where to get it. The Internet-based tools range from fully public websites to apps offered only to members of private health plans. While websites vary widely in their presentations, the Catalyst for Payment Reform study says all such efforts can benefit from a few common principles.

First, the sites must be easy to use. Hibbard, in her talk at the AHIP conference, said she uses a five-second rule of thumb—if the providers that have the lowest prices for the highest quality of care aren't discernable by consumers within five seconds, the data are not being presented clearly enough.

The Catalyst for Payment Reform study also noted that insurance companies and employers who offer health plans to employees must strongly encourage consumers to actually use the tools, and then to track differences in how people who research their healthcare options make decisions compared to those who don't. But none of those efforts is easy.

“In the broader context, many challenges to price transparency persist, including gag clauses (in insurance agreements) and weak state laws,” according to the study. “Before we can achieve fully functional transparency in healthcare, these and many other obstacles need careful attention.”

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