What if employees were better health care consumers? What if they had the tools they needed — as well as the desire — to actually shop for the best health care prices along with what was best for their health?
Increasing awareness of the disparity between health care costs — hospital procedures, clinic visits, lab work, prescriptions and more — along with the availability of accurate pricing data and increased patient cost sharing (i.e., higher deductibles) could help create more active health care consumers.
That said, a study conducted by policygenius.com discovered that only 4% of Americans could correctly describe terms such as deductible, copay, coinsurance and out-of-pocket maximum.
Consumers simply haven’t been trained to focus on price shopping for health care. Weighing one price against another to make a more informed decision is not something we all do automatically, the way we do for virtually any other product or service. Millennials in particular seem less interested in shopping for health care, as they believe they don’t really need it; Gen Xers with children are far more apt to want to compare costs.
The good news, according to a Harris Poll, is that 88% of Americans believe the government should require hospitals and insurers to disclose prices.
The health care system is getting closer to embracing transparency with a sequence of “pillars” that are or will be contributing to opportunities for consumers to fully see and understand health care pricing:
- Advent of electronic medical records that gave consumers access
- Legislation passed in January 2021 requiring full price transparency from hospitals
- Advancements in technologies such as telehealth visits are making communication with consumers easier
Higher cost doesn’t necessarily mean higher quality
This may seem counterintuitive because we’re used to a higher priced product or service having advantages over less costly options. It may seem odd but more effective health care treatments providing better health care outcomes should actually cost less. In addition, costly choices plus less invasive options can be two key ways employees can save.
In fact, higher prices are often a sign of waste and inefficiency. The Institute of Medicine estimates that 30% to 40% of health care spending is wasteful. And it doesn’t produce better health outcomes.
Employees are becoming more involved in the cost of their health care
The pandemic has prompted many Americans to become more engaged health care consumers. This is good news for the system as a whole, including for employers who provide health insurance to anywhere from 40% to 50% of Americans. When people are better at buying health care, they have the opportunity to be healthier and to save themselves and their employers money.
Will new options change health care shopping habits?
Several new players in the health care arena could have an impact on pricing as well as how consumers access and shop for health care.
Amazon Care and Wal-Mart Care Clinics provide primary and preventive care services in a few selected markets. Although neither take insurance, Wal-Mart provides easily accessed prices.
Health insurers that have acquired proprietary clinic networks could ultimately be a force in terms of pricing transparency, but currently they simply provide the convenience of having care and insurance under one roof.
However, innovative health insurers such as Bind could be a large part of the answer to how we can better shop for health care. Bind offers members total price transparency as well as education as to what those prices mean, especially when there is often such an enormous gap between pricing at one facility versus another.
How Marsh & McLennan Agency can help
While we don’t yet have complete transparency of health care costs, there are tools and resources that can help. Marsh McLennan Agency can help you access the right tools and our depth of expertise and experience can help you analyze health care needs to ensure you have the right plan for your varied employee groups, the best overall wellness program and the best ways to communicate with employees about their health and health care. To learn more, get in touch with your MMA representative.