High Stakes

Why patients don’t price shop

Why patients don’t price shop

And what that means for healthcare communicators

It’s a common refrain in the healthcare industry: Patients, now paying a higher percentage of their health insurance deductibles than ever, will begin to price shop. But the theory doesn’t bear out. In fact, evidence indicates that even though patients now pay more for their care, they don’t compare costs.

This August, Modern Healthcare reported that a South Dakota health system’s effort to improve price transparency for patients has flat-lined.  In 2009, the system openly disclosed the out-of-pocket costs of several procedures performed at its hospitals, hoping to start a dialogue. Hits on their website spiked during the first week, then faded to nothing, surprising administrators.

Why Don’t Patients Price Shop?

Several factors work against patient price shopping. Consider:

  • Patients still trust their doctors. If they’re having a good or neutral experience, they’ll stay with their physician. No one wants to transfer medical records and fill out the countless forms it takes to enter a new system. Also, seeing a doctor is a vulnerable experience. Patients are often exposed, physically and emotionally, and the thought of building that relationship again is exhausting.
  • The economics don’t work yet. Patients who price shop spend a tremendous amount of time digging. Often, the cost sunk on time spent researching price might not make up the difference in cost between procedures. Moreover, it’s hard to even start the process – most health systems don’t have the cost of care readily available.
  • It’s impossible, as the buyer, to make an informed decision. Because we haven’t reached a critical mass of health systems practicing price transparency, there’s no apples-to-apples comparison available — none — to help guide this very difficult call. That means it’s much easier for patients to shift the burden of choice onto the physician.
  • Not only is healthcare complex, it’s terrifying. People are understandably frightened to put their lives in the hands of people they don’t really know — and that fear is amplified when they’re making healthcare decisions for their parents or their children. So when patients price shop, they transfer a sense of responsibility for the outcome of the procedure from the doctor or caregiver to themselves. That’s a huge burden to bear.
  • Finally, price shopping only works for a small subset of care. The service provided must be defined and finite, say, a hip replacement or MRI. It’s much more difficult to estimate the cost of managing a chronic condition such as diabetes. Also, patients need time to price shop, which rules out emergency medicine.

But while patients aren’t price shopping, they are feeling the pressure from paying more out-of-pocket.  And it turns out that when the care gets expensive, patients don’t go looking for deals. They just stay home.

In the second quarter of 2017, health systems across the board reported flat or lower admissions rates, Dave Barkholz reported for Modern Healthcare. He writes, “fewer elective surgeries and procedures are dampening volumes, partially driven by consumers deciding whether they can afford them.”

How to Talk About Healthcare Costs

Healthcare costs present a unique challenge for communicators in the industry. For one, though becoming consumer-driven, healthcare is not yet wholly consumer-facing. Secondly, advertising a low price isn’t exactly great messaging in healthcare. Imagine a billboard for a $2,999.99 knee replacement surgery (and if you buy now, you get the second one for half price). It feels tacky.

Yet healthcare communicators shouldn’t remove themselves completely from the cost conversation. It’s certainly a good idea to stay ahead of potential damaging or out-of-context headlines. Consumers are demanding more transparency, so communicators should be prepared if numbers get out that your hospital charges thousands more than a competitor for a certain procedure.

More importantly, patients need to know if the care they need is actually more affordable than they think. Health systems can work with care navigators within a hospital to discuss the true cost of care and figure out payment plans for necessary services whenever possible.

The good news is, patients generally want to stay with their providers. They won’t price shop if they’re confident in the quality of their care. It’s up to health systems not to lose them, and communicating intelligently about costs can only help.


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