Healthcare consumers want information personalized to their situation from health plans

• When consumers have access to information personalized to their situation, they are likely to make decisions based on what’s important to them, such as cost, according to a McKinsey & Company study.
• Healthcare consumers chose lower-cost, average-quality providers rather than high-cost/high-quality providers, according to study responses.
• Consumers were willing to travel further distances for higher-quality or lower-cost care providers versus using a more conveniently located but higher-cost provider, according to the study.

A recent McKinsey & Company study on how healthcare services information influences patient decision-making finds, “When consumers have access to information that is personalized to their situation, they are likely to make different decisions, often prioritizing factors important to them, such as cost.”

By presenting consumers with a range of scenarios in a simulation, the study identified several trends:

• Price sensitive: Respondents gravitated to lower-cost, average-quality providers rather than high-cost/high-quality providers. As out-of-pocket costs increased, fewer consumers selected higher-cost/higher-quality providers.
• Will travel for lower cost care: Consumers were willing to travel further distances for higher-quality or lower-cost care providers as opposed to using higher-cost providers who are more convenient.
• Experience matters: If a consumer, or someone they know, has a poor experience with a provider (specifically administrative experience), they are willing to change their preferred site of care.

Finally, the results show that consumers look to their primary care physicians to educate them on treatment decisions and to their health plans to help them understand cost and benefits.

Takeaway

This pretty much aligns with HFMA’s Price Transparency Taskforce recommendations in terms of:

•  Providing consumers with information specific to them.
•  For insured individuals, the best source of this information is from their health plan.

You know what doesn’t align with this? CMS’s various hospital transparency initiatives. As we suggested to CMS in our response to the proposed requirement that hospitals post their “payer specific negotiated charges” in the 2020 OPPS proposed rule, providing patients with the negotiated rate won’t help consumers become savvier shoppers.

Even if a bunch of start-up companies scrape hospital websites and create “price apps” for consumers to use, it’s still not going to help the patient understand their specific out-of-pocket cost. This is true even if it provides for easy shopping and helps consumers understand the level of quality offered by the various providers using data scrapped from Hospital Compare, Health Grades and other sites.

And CMS’s proposal in the 2021 IPPS proposed rule to require hospitals to report their median- payer-specific negotiated charge for Medicare Advantage and other payers? That’s even further from being helpful to either CMS’s goal of helping consumers to shop or improving the accuracy of Medicare payments by reducing fee-for-services reliance on the chargemaster (HFMA comment letter available here).

A step in the right direction?

The data CMS would require health plans to provide if it finalized a health plan requirement would be a step toward creating a more consumer-centric market for shoppable services (HFMA comment letter here).