Shopping around for the best price is Consumerism 101. In the age of mobile devices having a permanent spot in the purse or pocket, anyone can see a product they want in a store, quickly hop online, and see where they can get the same item for less money.
Paying more than you have to for the same product happens often in healthcare; the Kaiser Family Foundation estimated in 2012 that 20 percent or more of what the U.S. spends on healthcare per year is spent on waste. To help reduce wasteful medical spending, for patients and other parties footing a portion of the bill (like their employer and/or insurance plan), patients need to shop around for healthcare procedures and services, just like they would if they were buying a new TV. The problem is, with the lack of pricing transparency in healthcare, many consumers don't know this is an option—or even possible. Despite the ubiquitous availability of price information in our retail experience, it is typical for consumers to go into a procedure knowing nothing about what it will cost until long afterward.
Take a common example: If a doctor orders an MRI, the patient may go ahead and schedule the procedure at the doctor's facility or affiliated hospital, not knowing that he or she can, in fact, get the same test done elsewhere for a fraction of the cost.
Researchers at the Health Care Pricing Project at Yale, have shown significant variation in the price of common health care procedures and services both between and within states. The most expensive lower limb MRI in Columbus cost more than six times the price of the least expensive one (1).
In response to such variation, there has been a number of private and publicly available tools created to introduce transparency in the pricing of healthcare services. Service providers like Healthcare Blue Book, Castlight Health, Clear Cost Health, Vitals, Wellmatch, HealthSparq, health plan based tools, and public sites created as a result of legislation such as Colorado’s Comedprice.org, Maine’s comparemaine.org, New Hampshire’s NHhealthcost.org amongst others.
However, the lament remains that individuals still are not shopping around and utilization remains low raising questions on effectiveness of these tools. What’s missing? The key to helping patients become savvier healthcare consumers is supplying them with timely information about how to find the best price. By intelligently using big data and predictive analytics, you can make sure the patient has information about how to shop for the best price for services and procedures, right when they need it. Time Series or Propensity Scoring models can be used to predict who is likely to be in the market for a procedure (like an MRI) within the next 60-90 days and these users can be educated proactively about the variation in prices and tools to enable them to get the best value.
Last year, Target started to pilot beacons in the store to alert users to deals and reviews as they walk through the store. Now imagine this in healthcare:
What if you check into an ER and while you wait, you get a message that tells you what a visit will cost today, what to expect during the visit, an alternative like Urgent care or Telehealth provider - that you can go to now if the visit is not lifethreatening, and an UBER code to go there for free (if Uber is in your city). Or you make that MRI appointment and in advance, it tells you what the visit will cost, what to do to prepare, and if the facility you made it it at is above the reference based price exposing you to greater out of pocket costs - and provides alternatives that provide that MRI at a lower price and similar quality ("best-buy").
Wouldn’t that transform the healthcare shopping experience? I believe it would. And that's what we are working on. Ushering in a real shopping experience in healthcare enabling Consumerism 101.