In this episode, we are joined by Barbara Anthony, Senior Fellow at The Pioneer Institute, to discuss their study on consumer’s awareness, usage, and knowledge of published healthcare prices.
Podcast (hfppodcast): Play in new window | Download
Learn how to listen to The Hospital Finance Podcast® on your mobile device.Highlights of this episode include:
- Background on The Pioneer Institute’s study of Massachusetts consumers with employer-sponsored healthcare.
- What the study revealed about how consumers access healthcare pricing information.
- What were the most trusted entities that consumers turned to for healthcare pricing information?
- Recommendations for stakeholders involved with price transparency initiatives.
- And more…
Mike Passanante: Hi, this is Mike Passanante and welcome back to the award-winning Hospital Finance Podcast®. Improving health care price transparency has been the focus of many initiatives at both the state and federal levels of government. A recent survey conducted by the Pioneer Institute in Massachusetts has shed some light on how or if consumers actually take advantage of published pricing information. To discuss the results of the survey, I’m joined by Barbara Anthony, Senior Fellow in healthcare policy at the Pioneer Institute. Barbara, welcome to the show.
Barbara Anthony: Thanks a lot. It’s great to be on, Mike.
Mike: Definitely looking forward to this discussion, Barbara. And for those in our audience who may not be familiar with the Pioneer Institute, why don’t you tell us a little bit about what you do there?
Barbara: Pioneer Institute is, first of all, we are a nonprofit think tank. We’re bipartisan, nonpartisan, really. And we’re located in Boston, Massachusetts. We do research. We analyze data. We produce papers, reports, surveys on a whole range of issues. And what our work is really geared toward is trying to improve state government in many ways and also our economy in any ways based on free market principles. So areas that we work in and do a lot of publishing in is education, better schools, transportation, transparency in government, government finances, and of course, health care. We do a lot of work at health care as well.
Mike: And as we talked about before the show, our topic today around price transparency is something that is of the utmost importance to our hospitals right now and is certainly on the minds of our government officials for sure. So with that, let me ask you, why did you initiate this particular study, and what were you looking at?
Barbara: Massachusetts now, since 2014, we’ve had laws on our books that require price transparency from both providers, meaning hospitals, doctors, clinics and insurance companies. So we have a state law here that requires that providers give out prices upon request of a customer, a patient, and insurance companies have to develop. And they have developed what are called price transparency tools, so that if you’re a member of an insurance company, you can go online and you can determine what the– you can compare the prices of various procedures among various providers and know what your out-of-pocket cost is, know what your remaining deductible is. So we have these laws in Massachusetts. They’ve been around now since 2014. I used to work with state government. I was under secretary of consumer affairs during the Patrick administration here. And so I was very involved in developing this law and then its very initial implementation. So the years go by and it’s now– what are we? We’re in 2021. So it’s been quite– it was quite a while since the laws became effective in 2014. And we wanted to know what impact those laws have had and whether consumers are taking advantage of them. I’ll tell you one thing we do know, because we’ve done a lot of studies at Pioneer on hospital and insurance company compliance with those laws. And unfortunately with respect to provider compliance, particularly hospitals, we’ve found that compliance hasn’t been so great, that the hospitals don’t maintain a very friendly system for providing consumers with the price of medical procedures before you receive them. Insurance companies do a better job of putting information out there through their cost estimator tools, as I mentioned. The problem, though, is that the uptake by consumers, by members of various insurance companies has been slow. So we wanted to find out from the consumer viewpoint. Now, we knew what was going on on the provider in the insurance company side, but we wanted to know what consumers thought about all this so that’s why we did this study.
Mike: And who did you survey when you began the study?
Barbara: Well, the survey’s done by a company called Dapa Research. That’s D-A-P-A. Dave Paleologos, who is a very well-known pollster here in Massachusetts, but he does national political polls all the time, he’s the director of the Suffolk University Research Center. So they conducted the poll for us and we worked together on the questionnaire and analyzing the results. Very pleased with David’s work. He’s an excellent pollster.
Mike: And that poll was to consumers across the state of Massachusetts.
Barbara: Yeah. Well, what we did, Mike, was this. One of the things that’s really important when we get too into the weeds on polling, but in order for– if you’re going to do a poll, if you’re going to do a survey, it has to be statistically reliable and valid, which means that you look at that survey and you want to say, gee, I’ve got a lot of confidence that the results in this survey are accurate and if I did it 100 more times it’s going to come out to be roughly the same. So that’s another reason, of course, why we went to this professional pollster. And what we did was– what David did was he developed a sample size of about 500 people, then you’re going to make a lot of– this was done by telephone, so landline and cell phone throughout the state of Massachusetts and all geographic areas across all income groups, all kinds of other age groups, but the main thing we wanted here was for 500 people who got their health insurance through their employer or else they bought it on the exchange, the Massachusetts– the connector is what it’s called. So we did not want anyone who was receiving Medicare. We didn’t want anyone receiving Medicaid. We wanted people who were insured by the private insurance companies here in the state. And so these surveyors, they came up with 500 people and that was the sample size, and then a list of questions asked, as is in all surveys, and that’s basically how it was conducted.
Mike: And Barbara, what did the survey results reveal about how consumers access pricing information?
Barbara: Well, unfortunately, our survey results revealed some of what we already knew that consumers do not access pricing information very much. We found out that only about one in five consumers in Massachusetts has ever tried to find the price of a service in advance of getting that health care service and I’m assuming now that– and we also found that of those one in five, most of that comes from the insurance companies cost estimator tool, but that’s a pretty low number of people who have thought about trying to find out the price of health care information. And the issue here is that most people Didn’t think that the information was available, they didn’t know it was available, hadn’t thought about trying to access pricing information, didn’t know where to go to find it. Yeah. We were totally surprised. But we were, of course, disappointed that so many consumers out there, even though the information’s available here, did not know that they could have access to it.
Mike: And I guess on the flip side, did anything about the findings surprise you? Were you taken back by anything?
Barbara: Well, I mean, there were a number of things that did surprise us. So we did as consumers. Well, who would you trust to give you advice? Who would you go to? Who would you trust? And trust was the keyword there to get price information about health care from. And surprisingly, I shouldn’t say too surprisingly, but insurance companies and doctors were in the top tier. In addition to that, the Commonwealth of Massachusetts, though, that surprised us a little bit because a lot of people don’t trust government. But we have an agency here in Massachusetts that does have a website where they do provide some kinds of price information about health care services for consumers. So doctors, insurance companies, and the state were the most trusted entities here in Massachusetts for consumers in terms of obtaining price information. That’s what they felt they could trust the most. Now, the thing that was a little bit surprising, I think, was the fact that hospitals were down at the bottom of the list, only like 3 or 4 percent of the survey, folks surveyed said they would trust a hospital to go to in terms of obtaining price information. I think that is just a reflection of the fact that hospitals here don’t make it easy for consumers to– I’m not suggesting that they make it easy elsewhere. But here, Massachusetts, our own pioneer studies have shown that it’s very difficult for consumers to get price information from hospitals. And it’s also not something that’s widely publicized. So I’m not really surprised that that showed up so low on the scale in terms of trust. And it just shows how much work there has to be done to bring that trust number up and provide consumers with that information.
Mike: Well, certainly, the hospitals will be I think motivated to move forward faster with price transparency efforts given the push of the federal government and the new rules in effect this January.
Barbara: Yes, that’s true. Absolutely. So this survey took place before the federal laws were there. I think they were in the process of being promulgated and they had not taken effect yet. So I think that the landscape has changed from the results of this survey. But it certainly needs changing. And we can see that we have a very low bar here that needs to be raised in terms of providing this information to consumers. What’s interesting is that this idea of, we as consumers, would you like price information about a health care service before you obtain it? And that was a very high number. I think it was almost like between 70 and 80 percent said, “Yeah, we do want to know the price of a health care service before we get it.” But again, people didn’t know where to go, didn’t know it was available. So there is a desire to know. And I think that providers especially and insurance companies, too. And we all need to do a better job in terms of getting this information out to consumers. I mean, some of the other things that consumers told us in the surveys, we gave them some things to choose from, and they want easy access to price information. Nobody wants to have to sit in front of a spreadsheet and troll through Excel to find out the price of a service. So they would like apps on their phones. They would like easy-to-read websites that display out-of-pocket costs. They’re also interested in incentives, cash incentives, to seek lower cost providers. A lot of people– I shouldn’t say a lot, but some people in our survey thought that it didn’t matter which provider you went to, what hospital, or what doctor, that everybody charged the same price. Now, that’s so not correct. We have very wide variations in healthcare prices all around the country. Massachusetts is no different. We have tremendous variation in healthcare prices. We have very expensive hospitals and doctors. And we have mid-price. We have low price. So there’s a wide range to choose from. Now, we’re very interested in quality. So we call these high-value, lower-cost providers. But what we’re talking about here is trying to incent consumers to perhaps do some shopping around for those services, healthcare services, that are not emergency services, or very sophisticated tertiary care services, but X-rays, basic medical kinds of services that everyone gets. There’s a great difference in price depending on where you go. And so what we found here is that no matter what your income was, people did want to know this information. And they wanted easy ways of getting it. In addition to that, people– or consumers, I should say, in this survey were interested in getting cash back from their insurance companies if the consumer chose a high-value, lower-cost provider. So there are these programs all over the country. They’re not as widespread as we hope they would be. But you can earn money back if you choose a provider that’s less expensive than the top tier providers for a particular procedure. The other thing that we learned is that, again, people trust their insurance companies here. And again, that may go against the national grain, but we do have very good insurance companies in Massachusetts. They’re always at the top of the US World & News Report list of good health plans. And again, they were among the more trusted entities that our consumers said they would go to for healthcare price information. So what consumers here wanted again from our survey– well, 70% of them, they were interested in getting notifications from insurance companies on ways in which they could save money, that a consumer could save money. So they trust the insurance company to give them that information. And interestingly enough, they also want to know the price paid by the insurance company itself to the provider. So about 75% of them, three out of four, wanted to know that. But while I’m talking about insurance companies, I do want to say that one of the first questions we asked consumers is how satisfied are you with respect to your insurance company? And this result was– it was a little surprising to me because I’m not in the business of– I’m not in the health insurance company business. But 75% of Massachusetts consumers with commercial health insurance were very satisfied or satisfied with their current health insurance. And we found out that that’s consistent with what the carriers with their own survey say. Now, that may not be true nationally. And I just want to clear this up for your listeners too, that– why should that be– in Massachusetts isn’t that our insurance companies don’t make money. They do, of course, but their organizational status is that of non-profits. They do not have shareholders. And they are also very heavily regulated by the state. So they do behave – I believe this is fair to say – differently here in Massachusetts than many insurance companies in other parts of the country where they are– where they are for-profits, where state regulation is lax. And so it kind of showed in our survey that people here were satisfied and also that they trust them to get this price information from.
Mike: Great insights there, Barbara. Based on what you found, what recommendations do you have for stakeholders around price transparency initiatives?
Barbara: Well, this is something that I’ve been saying for years here – to get some great leadership at the state level. We need a bully pulpit here. Certainly, the state of Massachusetts has a great interest, as do most states, in lowering health care costs. I mean, we all do. And one way to lower cost is, of course, to make it easier for consumers to go to high-value, lower-cost providers. But we need an– we need to educate people. And that takes government leadership, it takes business leadership. I mean, again, employers have a great stake in this as well, because many are– almost all large employers are self-insured and they’re paying directly for health care costs. And small businesses are very concerned about their premiums. They want to see health care costs reduced. So we get the insurance industry, we get government, and we get the providers. We absolutely need to have more buy-in from Massachusetts hospitals and physicians and specialists across the board in terms of educating consumers and making it easier for consumers to get price transparency information. It can’t just be one. There really has to be a coordinated effort of those entities, state government, employers, insurance industry, and providers coming together to educate consumers. And we’d like to have– and of course, we have some very, very good health care consumer organizations here in Massachusetts. And we want to– they should be involved as well in terms of helping to spread the word that this information is available and that it can actually help not only save people money but direct people to situations where quality is high– the price is just lower. And in fact, actually, we have– there were studies done a few years ago here by our attorney general’s office that demonstrated what I just said, that price is not an indication of quality in terms of health care. And sometimes consumers have that misconception. We call it the Neiman Marcus effect, that you think if it’s a fancy place or a higher-priced institution, that you’re going to get better quality. That is not the case. The studies were done that showed the price of quality– there was not a correlation– what statisticians call, it was a scatological situation where they’re not correlated. And so that’s why it’s even more important to get information out. And that’s why it takes a village, but it takes the government, it takes all those other stakeholders I mentioned working together to provide the kind of education and access for consumers that they want.
Mike: Barbara, if someone wanted to find out more about the survey, where can they go?
Barbara: Well, I think the easiest thing to do is to go to the Pioneer Institute website, which is pioneerinstitute.org, and follow the health or healthcare tabs on that website. And you can see the entire– we’ve got about 20– over 20 charts up. And there is also a– very recently an entire written report on everything I’ve just talked about. So the information’s out there. It’s very transparent. People can see it, and read it, and use it as they deem.
Mike: Barbara Anthony, thank you so much for joining us today on the Hospital Finance Podcast.
Barbara: Well, thank you for inviting us. And we appreciate it very much.
