Effectively shopping for healthcare is a novel concept for those who have never had to pay for medical expenses directly out-of-pocket. With the continued growth of high-deductible health insurance plans and their considerable up-front cost sharing responsibilities, increasing numbers of consumers are now motivated to determine, for starters, what even constitutes a shoppable healthcare service.
The US Department of Health and Human Services defines a shoppable healthcare service as any healthcare service that can be scheduled by the patient in advance. While this definition is informative, can we truly expect consumers to actively shop for healthcare services only if it can be scheduled by the patient in advance?
Let us start by examining how price might factor into the healthcare purchasing decision process. HealthPriceCompare used FY2020 Medicare reimbursement data as a proxy for prices negotiated between providers and health insurers (and are typically, at a minimum, one and a half to two times Medicare prices). By applying these prices to the seventy shoppable healthcare services that hospitals are now required to publicly post, we get a reasonable idea of the service categories where consumers can be expected to make more informed purchasing decision.
We identified the laboratory and pathology services category as being on the lowest end of the price spectrum. With prices ranging from $2.25 for an automated urinalysis test to $47.81 for an obstetric blood test panel, it is reasonable to expect consumers that consumers will not demonstrate a great deal of price sensitivity in their selection of a provider for services in this range.
In contrast, we expect consumers to be more invested when making healthcare purchasing decisions in the evaluation and management category. Prices ranged from a low of $26.92 for group psychotherapy to $275.12 for a sixty-minute new patient evaluation.
A noticeable increase in prices occurs in the radiology services category. For example, a CT scan of the head without contrast ranges from a low of $104.09 to a high of $149.89. More sophisticated procedures such as an MRI brain scan with contrast ranges from $327.60 to $479.72. Again, these are Medicare payment rates, not the considerably more expensive commercial, non-Medicare market.
The highest prices are in the Medicine & Surgery Services category. Of its thirty services, fourteen have a Medicare payment amount greater than $500. If a consumer has not already hit their deductible limit, one can surely expect focused attention to be paid to these kinds of services.
Will consumers actively shop for these kinds of services based on price considerations alone? Probably not and nor should they. Factors such as quality, distance to provider and availability of telehealth can and should be considered when making provider decisions.
While the healthcare industry continues to protest that healthcare is too complex to be shoppable, consumers exposed to upfront medical expenses have no other options for managing their healthcare expenses. Defining a shoppable healthcare service as any healthcare service that can be scheduled by the patient in advance is a start, but in actual practice, consumer knowledge of negotiated insurance prices in addition to quality and distance to provider information will ultimately determine the shoppability of a healthcare service.
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