Some policymakers and theorists say price transparency is the silver bullet that will help solve the nation's healthcare cost growth problem. Consumers will use information about the price and quality of services offered by different providers to get the best deal, saving themselves and the country lots of money, they argue.
But my personal experience over the past year trying to find a lower price for an MRI shows that shopping for a healthcare service based on price and quality is very hard, even for someone with above-average knowledge about how the system works.
This month, after nearly giving up, I found a provider that saved me a significant amount of money. But it took hours of work over a number of months -- including online searching, many phone calls and emails, and overcoming bad leads and inaccurate information -- to find that provider. I was unable to get reliable information from my health insurer, my employer's benefit assistance vendor, or a separate company that specializes in helping people shop for MRIs. Most consumers wouldn't have had the time, resources, or persistence to go through all that – particularly if they were sick and needed care quickly
I eventually discovered a lower-priced provider. But that breakthrough only came about as a result of my writing about my shopping experience last October and getting a lead – initially inaccurate -- from the executive of a price transparency company who had read my blog post. That's obviously not a research avenue available to people who are not healthcare journalists.
It was nearly a year between my initial search and getting the test. Waiting that long probably was not a good idea. Still, my long, twisty search saved me nearly $1,500 under my employer's high-deductible health plan. Hooray!
I'm hardly alone in finding so-called consumer-based healthcare a major challenge. “Even if you're a smart guy and you're well informed and educated, it's really tough,” said David Newman, executive director of the Health Care Cost Institute, who went through his own medical price shopping ordeal earlier this year. He disagrees with the argument he hears from commercial vendors of healthcare shopping services that “consumers will wake up on a Saturday and price out MRIs, and that they'll be so engaged and informed that they'll make great decisions. That's not the way to go.”
Other experts disagree with him, while acknowledging that the tools and information currently available to consumers are far from adequate. A new report card on state price transparency laws published by the Health Care Incentives Improvement Institute and Catalyst for Payment Reform found that only three states earned an “A,” while 43 received an “F.”
“Price information matters, but it needs to be presented the right way for consumers to act on it; when it is, they do,” wrote Suzanne Delbanco, executive director of Catalyst for Payment Reform, and two co-authors in a Health Affairs blog post last month.
Even so, Republican presidential candidate Donald Trump and other GOP politicians emphasize tax-sheltered health savings accounts as a major part of their plans to replace the Affordable Care Act. They argue that the expanded use of HSAs would drive a more cost-efficient system by prodding consumers to shop, compare and negotiate with healthcare providers.
Many employers like mine already have jumped on the consumerism bandwagon. Twenty percent of firms with health benefits offered employees high-deductible plans paired with tax-sheltered HSAs last year, and 15% of covered workers were enrolled in such plans, according to a Kaiser Family Foundation/Health Research & Educational Trust survey of employer health benefits.
My experience demonstrates that the U.S. is a long way from offering price information in the right way to make healthcare shopping viable under this consumer-directed paradigm.
Last fall, my doctor recommended, as a precautionary measure, that I get an MRI at the academic system he's affiliated with, Northwestern Memorial Hospital. He repeated that recommendation this spring. Northwestern charges nearly $5,900 for the scan. With my Aetna plan's $1,500 deductible and 20% coinsurance, I would be on the hook for at least $2,000. So I decided to shop for a cheaper but high-quality MRI.
My Northwestern Medicine doctor initially discouraged me from shopping around because he was skeptical about the image quality I would get at a different center and because he thought it might be difficult for his office to work with an outside provider. So I asked him to tell me exactly what image quality specifications I should ask for, which he did.
The first hurdle came when I called my insurer, Aetna, for a referral to a lower-cost MRI center. A phone representative told me I needed to get the CPT and ICD-10 code for the procedure. After getting that information from my doctor's office, I called Aetna back. A representative told me another academic center in town offered MRIs for $548. I called that center and found out the actual price was more than $6,300.
Then I tried Aetna's price-comparison website, which the company widely touts. But the site did not offer information about the fairly common type of MRI I needed.
Then I tried Health Advocate, the benefits assistance vendor available through my employer. The representative said the company could not help me find a lower-cost MRI center.
Finally I caught a break. After I wrote my initial blog post last October about my then-fruitless MRI shopping experience, I received an e-mail from Raj Ahuja, vice president at ContactMyDoc.com, who pitched me a story about his company's services helping patients compare prices. He said patients don't know that “great” price comparison tools exist and that his company helps patients find local, high-quality providers of MRI and other services. So I called him and he referred me to his colleague Harsh Singh, co-founder and CEO of ContactMyDoc.com.
Singh was kind enough to search his data base and refer me to a couple of MRI providers in downtown Chicago that offered a much lower price than Northwestern did. But when I called those centers, they told me they did not offer the kind of MRI I needed. Singh was surprised by that when I called him back, but he double-checked and told me to contact Mary Pat Houlihan, the regional director of Falls Church, Va.-based Progressive Radiology.
Thank goodness, Houlihan turned out to be the first person who really knew what she was talking about. She told me her company does offer the kind of MRI I needed but that I would have to drive an hour to the suburbs to the one center where they have a new, 3.0 Tesla machine capable of performing this type of imaging procedure. She said it would cost $625 if I filed a claim with my insurer, and $550 if I just paid cash. I thought, great, the savings would be well worth a long drive out to the suburbs.
To make a long story shorter, I drove out to a drab-looking office in the southwest suburbs and underwent the MRI performed by two friendly Progressive staffers on July 31. To their chagrin and mine, the machine malfunctioned. I had to return the following Saturday, and the machine worked fine. I paid $550 with my Aetna health savings account debit card. I don't know yet whether that amount will apply to my $1,500 deductible, since to get that lower price I couldn't file an insurance claim.
My Northwestern doctor read the Progressive radiologist's report and told me that, to my huge relief, it was negative. Now he plans to take a look at the actual images, and says if they are high-enough quality, he may refer other patients with high-deductible health plans to Progressive to save them money. I joked that the financial folks at Northwestern Medicine might not be happy about that.
As difficult as comparison shopping for an MRI was, shopping for other types of services often is impossible. The Health Care Cost Institute reported in March that less than 7% of total U.S. healthcare spending in 2011 was paid by consumers for “shoppable” services, meaning those that can be scheduled in a market with some competition.
Newman debunks the whole idea of consumers shopping for individual healthcare services, arguing that employers, insurers and providers are in a far stronger position to evaluate the price and quality of healthcare services and to control total spending than consumers are. Plus, most consumers simply aren't interested in price shopping for healthcare, unlike their eagerness to shop for other types of products and services.
“Your insurers should be able to tell you where to get a cheap MRI,” he said. “They're dealing with thousands of cases and they know where the prices are good and bad.”
As they say, caveat emptor.