Price transparency ads have no impact on lowering prices.
Many plan sponsors are trying to provide more information on the cost of care through price transparency. The goal of providing price transparency, among others, is to help members become better shoppers so they make better cost-saving decisions.
In a recent study, a group of researchers in the Northeast placed high-profile Google ads for a price transparency website. The website was designed to inform members and assess whether they would make better healthcare purchasing choices. Advertisements were shown to people from New Hampshire who were either using Google’s search engine or on a website with display ads.
The analysis shows that even though traffic to their website increased 600%, there was not an increase in the utilization of more affordable healthcare providers. The primary outcome was measured by the total price paid for imaging service, ED visits, or physical therapy for adult members of an Anthem plan from January 1, 2017 to June 30, 2019.
The results of the study imply that high-cost of certain healthcare procedures and services may not necessarily be attributed to consumer unawareness.
The results of the study imply that high-cost spending of certain healthcare procedures and services may not necessarily be attributed to consumer unawareness, but can be attributed to many other factors as well. Some possible explanations include: members do not know enough about the details of their benefits packages to fill out the information on the website to look up different prices; there is not an incentive to find lower-price services; or there are other priorities than prices for choosing a more affordable healthcare service or provider.
The study provides an interesting insight into consumer behaviors when more price transparency tools became available. However, there are several limitations with the study. Notably, the audience drawn to the Google ads might not be representative of a a the patient population that would seek price transparency tools or act on the information. Still, it’s is unclear whether this population from this study was price sensitive. Another consideration is that some members may not necessarily need price transparency tools to find cheaper providers. The study adds another perspective of plan sponsors’ efforts to improve price transparency. The result suggests that different approaches to price transparency might be needed or preferred by different member segments.