Comparing Medical Costs No Easy Feat

Comparison shopping for health care is hard despite the host of websites trying to help

/ Author:  / Reviewed by: Dominique Brooks, M.D Beth Bolt, RPh

(RxWiki News) What if you could compare healthcare providers online by looking up out-of-pocket costs for different services? Choosing a healthcare facility this way would be much easier.

A new study suggests that, though there are many state-sponsored websites that let you compare healthcare services, most of them are not very helpful.

According to this study, most of these websites list hospital charges for inpatient procedures and services but not for routine outpatient care. Since urgent life-threatening situations that need hospitalization can’t be planned in advance, getting a bang for your buck remains elusive.

"Call healthcare facilities to estimate out-of-pocket costs."

The study was conducted by Jeffrey T. Kullgren, MD, MS, MPH, from the Veterans Administration Center for Clinical Management Research and the division of general medicine at the University of Michigan Medical School, and colleagues.

"As more Americans face high levels of cost-sharing in their insurance plans, it's even more important to improve access to data that help them anticipate their out-of-pocket expenses and evaluate their options," said Dr. Kullgren in a press statement.

The researchers analyzed 62 websites run by state-specific institutions such as government agencies or hospital associations. These websites have been set up in the past decade to assist patients who want to comparison shop for healthcare services.

Analysis of the websites showed that most of them displayed billed charges but not the amount patients could actually expect to pay.

Also, instead of including prices for outpatient services such as lab or radiology tests that patients often shop for, most websites published prices for inpatient care. Since in-hospital stays usually can’t be planned ahead, according to the authors, this approach adds little value for comparison shoppers. 

Most websites did not include any information on quality of services that could explain differences in pricing.

This study concluded that few publicly available online tools help patients plan and compare healthcare costs.

"There's growing enthusiasm for improving transparency of prices for health services to help people be well-informed consumers and make better decisions about their care. The problem is that most of the information that's out there isn't particularly useful to the patients themselves," said Dr. Kullgren.

"Obviously if you have a heart attack or another emergency that sends you to the hospital, you're not going to be researching prices of services ahead of time," Dr. Kullgren pointed out. "But if you know you're due for a routine lab test, a radiology test, or an outpatient procedure that you will have to pay for, you often have time to assess the options. Unfortunately prices for those types of services are seldom available."

According to the study, some websites, such as the New Hampshire HealthCost website, were more consumer-friendly. This website lets patients enter their insurance information and receive an estimate of how much a healthcare service would cost at different facilities in their community.

According to dailyRx contributing expert and President of Payer+Provider Syndicate, Adam Powell, PhD, "While we are moving towards an environment of greater consumerism, a lack of price transparency is a major roadblock that we face. People can't make good decisions without good information. The information needs to be operationally actionable, convenient, and easy to understand."

Dr. Powell continued, "Given that patients rarely pay the total billed charges, disclosing total billed charges rather than patients' likely expected contribution may needlessly discourage patients from seeking care. A similar problem of sticker shock exists in higher education, where the average student typically pays less than 100 percent of the advertised tuition due to financial aid."

This study was published as a research letter in the June 19 issue of the Journal of the American Medical Association.

The research was funded by the Department of Veterans Affairs Health Services Research and Development Service and the Robert Wood Johnson Foundation. No disclosures were available in the accompanying press release.

Review Date: 
June 20, 2013
Last Updated:
August 2, 2013