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When Patients Become Consumers, Price Matters

By Truven Staff
Mike Taylor image“How much is that x-ray?”

I read a recent commentary in which the author was struggling to understand the cost of a standard back x-ray. In the scenario described, the author had ‘pulled’ her back, so she went to the doctor who recommended a set of x-rays. The author went on to describe efforts to discover where the x-ray could be obtained and the price.

The result? Price information was nearly impossible to gather. Hospitals and imaging centers needed to know the insurance information and many other data points before determining the price.  Unfortunately this is an all too common scenario. Why does this happen, and how can this situation be resolved?  The “whys” are another topic, but I’d like to address the “hows”.

There is a definite trend toward developing tools to address this inability to learn about price of medical services. This trend is called “transparency,” and doctors, health plans and hospitals are facing more pressure to provide transparency tools to consumers.  With new insurance markets and exchanges using consumer driven health plans, patients are paying higher out of pocket costs for medical services, and are rightly asking questions about the costs of services.  In the past, patients paid very little of the healthcare bill and didn’t really care (or understand) the costs of the services they were receiving. In the post reform era, consumers are spending more of their own dollars and so are demanding price transparency. I think this is an important and timely trend. 

But consumers need to ask more than the cost of the service.  In our author’s situation, what are the questions she needs to ask about her diagnostic and treatment plan?  (All aspects of the plan, including radiology, lab tests, treatments and procedures, are subjected to similar questions.)  Here are the questions she needs to ask the doctor:

1.       What is the benefit of the test you are recommending?
2.       What is the cost, and what are the risks? For an x-ray, how much radiation exposure will I receive?  For a medication, what are possible side effects?
3.       Is this test or procedure even recommended for my situation? (In our back pain example, routine x-rays for this condition are not recommended, and shouldn’t be done in most cases.)
4.       How will the test results change my treatment?  If the results do not change the treatment, why do the test?
5.       If a procedure is recommended, what information is available to determine the quality of the procedure?
6.       Where is the best location for the test or procedure?

This seems like a lot of information, and will be less or more important depending on the cost or risk of a procedure. How can we expect the average consumer to be able to get these answers? To get back to the specific question of cost, however, at Truven Health Analytics, we understand consumers need this information and have developed a tool to provide answers. Our Treatment Cost Calculator uses our MarketScan® database, one of the largest of its kind, to provide the answers. Our research shows significant cost variation for the same test or procedure in different parts of the country, but surprisingly, also shows considerable price variation within a given market.  For example, the same test may vary in price by several-fold in the same city.  Our Treatment Cost Calculator allows the user to input the name of the test and the city where the test is offered; using MarketScan data, the tool shows the user all the locations for the test (including directions) and the range of prices for the test.  Our tool also includes quality information when available. 

Our intent is to arm the user with data about the necessity of the test, the range of prices being charged in the user’s location and data measuring the quality of the test.  We don’t expect patients to make clinical decisions, but we want the patient to be able to ask intelligent questions about their treatment plan.  We believe this level of transparency is necessary for a patient to be an active partner in their healthcare, not a passive recipient. This is the heart of patient centered care.

Michael L. Taylor, MD FACP
Chief Medical Officer

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