Health Care Cost Comparison Tools: A Market Under Construction Prepared for California HealthCare Foundation by Katy Henrickson Forrester Research with Lynne “Sam” Bishop, Jennifer Gaudet, and Caroline Hogan June 2006 About the Author Katy Henrickson, M.B.A., is a senior analyst at Forrester Research. About Forrester Research Forrester Research is a technology and market research company that focuses on the implications of technological change. About the Foundation The California HealthCare Foundation, based in Oakland, is an independent philanthropy committed to improving California’s health care delivery and financing systems. Formed in 1996, our goal is to ensure that all Californians have access to affordable, quality health care. For more information about CHCF, visit us online at www.chcf.org. ISBN 1-933795-10-7 ©2006 California HealthCare Foundation Contents 4 I. Introduction 5 II. Background and Study Methods 7 III. Phase 1 Findings Tool Use Is Minimal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Demographics of Users . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 9 IV. Phase 2 Findings Data Sources Vary Significantly . . . . . . . . . . . . . . . . . . . . . . . 9 Advantages of In-House Tools . . . . . . . . . . . . . . . . . . . . . . . 12 Pressure for Price Transparency . . . . . . . . . . . . . . . . . . . . . . 13 Tool Shortcomings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Tools Are Neither Widespread nor Widely Used . . . . . . . . 14 Bullish about the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 17 V. Recommendations 18 Endnotes I. Introduction The role of the consumer in health care is changing. Consumers are being encouraged to take more responsibility for the way their health care dollars are being spent and to become more active participants in their treatment decisions. What comes along with this consumer engagement, however, may be frustrating to consumers. With the advent of consumer-directed health plans, individuals are being asked to shop for health care products and services, but they are often not provided with the tools to make such choices in the most informed way. Although some online tools are available to help consumers research the cost of medical services, little evidence exists about what these tools can and cannot do, and to what extent they meet the demand for information. As part of the California HealthCare Foundation’s work on consumers and health care decision-making, the foundation asked Forrester Research to analyze consumer survey data and interview or gather information from a limited number of health plans, vendors, insurers, and a state hospital association about the online tools they offer. This study found that while such tools provide some information about health care costs, the information is primarily educational and does not allow comparison shopping. Furthermore, the tools are not widely available to insured consumers — and especially not to the uninsured. Although health plans and vendors said use of the tools is low, they are optimistic that such use will increase in the future, spurred by employer demands for transparent health care pricing and the growth of consumer-directed health plans. 4 | California HealthCare Foundation II. Background and Study Methods A number of online tools can help consumers research the cost of the medical services they receive. To assess consumers’ use of these tools, what the tools offer or will offer in the future, and whether they adequately meet consumers’ information needs, the authors examined the market from two perspectives: the demand side (consumers) and the supply side (vendors, health plans, insurers, and a state hospital association). Phase 1: Demand An analysis of data that Forrester Research had gathered about health care consumerism provided answers to a number of tools- related questions on the demand side. For example, how do consumers make health care decisions? How much, if at all, do they consider price when choosing health care providers or prescription drugs? What are the attitudes, perceptions, and behaviors of those who do consider price? Are online tools useful for researching costs? The data for Phase 1 came from a 2005 mail survey of about 70,000 households; a mail survey of about 10,000 households fielded in the second quarter of 2005; and an online survey of about 5,000 households fielded in the third quarter of 2004. The results were weighted by a number of demographic variables so they would be representative of the U.S. population generally or of Americans who go online. The results of Phase 1 also were used to create three representative types of consumers who would use online cost tools — a pregnant woman, a newly diagnosed diabetic, and an individual who takes multiple prescription drugs — for Phase 2. Phase 2: Supply In Phase 2, the authors interviewed entities that have online tools for retrieving cost information, or simply asked them what types of tools they offer. These entities included four vendors that sell their cost tools to health plans and/or employers; three health plans that built their own tools; three major insurers whose tools were developed in-house or by third parties; and a state hospital association. The authors then assessed the tools and determined how well they would meet the needs of the three representative health care consumers identified in Phase 1. Health Care Cost Comparison Tools: A Market Under Construction | 5 Table 1. Interview Subjects VENDORS H E A LT H P L A N S INSURERS A S S O C I AT I O N • HealthGrades, Inc. • Aetna* • Blue Cross of California* • Wisconsin Hospital www.HealthGrades.com Association • Blue Cross Blue Shield • Blue Shield of California* • Ingenix, Inc. of North Carolina • Kaiser Permanente* www.ingenix.com • Blue Cross Blue Shield • Subimo, LLC of Tennessee www.subimo.com • WebMD (Select Quality Care and CostEstimator) www.webmd.com *These organizations were simply asked what types of tools they offer to their members. 6 | California HealthCare Foundation III. Phase 1 Findings Consumers are acutely aware that health care costs are rising. More than half (52 percent) have seen their out-of- pocket health care expenses increase in the last year, and 68 percent think their share of expenses will increase in the next couple of years. Consumers also are attuned to rising health costs: 45 percent say this is a major financial concern for them. What is causing these costs to rise? Fifty-one percent of consumers point to increasing health insurance premiums as the reason their household’s out-of-pocket expenses have gone up, and 23 percent cite a household member who was diagnosed with a new medical condition as the cause. The major contributors to rising health costs generally, according to consumers, are doctors and hospitals (66 percent), prescription drugs (66 percent), and health insurance premiums (57 percent).1 Consumers also are struggling with the complexity of health- related decisions. Four out of five wrestle with at least one type of decision. The two decisions that the largest portion of consumers (65 percent each) say are complex are selecting a health plan and selecting a type of health coverage (for example, an HMO vs. a preferred-provider organization). Sixty-four percent say that choosing from among treatment options is complex: They cite unclear information on medical tradeoffs and risks (56 percent), unclear medical terminology (55 percent), and unclear information on financial tradeoffs and risks (51 percent) as major contributors to the complexity of health care decision-making. Tool Use Is Minimal In the three earlier Forrester surveys, it was not possible to isolate consumers’ attitudes about the transparency of health care providers’ prices. But the authors were able to analyze consumers’ use of online tools that enable comparisons of cost and/or quality. Such use is low: Only about 10 percent have researched the cost and/or quality of doctors or hospitals in the previous 12 months, either online or offline. However, of those who have done such research, more than half tapped online resources. Thirty-five percent have used only online resources, and 22 percent have used both online and offline resources. Health Care Cost Comparison Tools: A Market Under Construction | 7 Insured consumers have not significantly used prices: Only 9 percent have compared information the tools at their health plans’ Web sites, results about two similar prescription drugs online, and show. Only 29 percent had visited such sites in the only 6 percent have looked for the best prescription previous 12 months, and of those, the tool they drug prices online. most often used there (67 percent) was one for choosing a primary care physician. Fewer had used Table 3. Consumers who do or don’t research provider cost and/or quality online cost or quality comparison tools to track health CHARACTERISTICS DO DON’T care expenses (47 percent), to estimate the cost of common doctor visits or procedures (44 percent), Average annual household income $69,257 $56,030 to compare doctor or hospital quality (42 percent), Live in an urban area 57% 46% or to compare doctor or hospital costs (41 percent). Have a college degree 43% 29% Fewer than half thought the cost and quality tools Are technology optimists 70% 48% were useful. Go online at least monthly 91% 69% Have broadband connection at home 49% 29% Some people are more likely than the average *This group did not research offline either. consumer to research provider cost or quality. These individuals have been diagnosed with a serious Like consumers who research provider cost or illness, have given birth to or adopted a child or quality, those who search for prescription drug prices become pregnant, or are members of a racial or online tend to be more educated and technologically ethnic minority (Table 2). savvy than those who do not (Table 4). Table 2. Consumers who do or don’t research provider cost and/or quality and who… Table 4. Consumers who do or don’t research prescription drug costs online and who… DO DON’T DO DON’T Have been diagnosed with a serious 19% 10% illness in the last 12 months Have a college degree 47% 42% Have given birth, adopted a child, or 16% 10% Go online daily 76% 66% become pregnant in the last 12 months Have broadband connection at home 51% 45% Are of a racial or ethnic minority 12% 9%* *Mostly Asian Americans. Some types of consumers are more likely to compare drug prices online. For example, those who do not have prescription drug coverage, those older than 65, Demographics of Users and those who take prescription drugs to treat both Consumers who use online resources to research a chronic and a short-term condition are more likely provider cost or quality tend to be more urban, to research medication prices online (Table 5). educated, and affluent than those who do not. They also are more technologically savvy. For example, Table 5. Consumers who do or don’t research they are more likely to be technology optimists,2 prescription drug costs online and who… Forrester’s quantitative measure of a consumer’s DO DON’T attitude towards technology, and to go online more Have prescription drug coverage 5% 15% frequently (Table 3). Are older than 65 10% 6% Take prescription drugs to treat both a 11% 6% Consumers who take prescription drugs are highly chronic and a short-term condition cost-sensitive regarding their medications. However, few drug takers actually compare information about prescription drugs or use online tools to investigate 8 | California HealthCare Foundation IV. Phase 2 Findings Data Sources Vary Significantly The authors examined several different types of tools that publish health care cost information. One is treatment cost estimators, which usually provide information about average costs for an episode of care or annual treatment costs, including those for office visits, drugs, inpatient care, and diagnostics. The estimators provide average costs in the geographic area where the consumer resides, across providers and health plans. For example, a consumer who is contemplating a hip replacement procedure can see not only how much the procedure and hospital stay cost, but also the costs of all diagnostic tests (such as x-rays), pre- and postoperative visits, physical therapy, and pain medications. Two health plans and three vendors the authors interviewed have developed treatment cost estimators (Table 6 on the following page). Health plans that have built these tools use their own data, and therefore display their own contracted rates. Third-party tools generally do not publish a health plan’s contracted rates, although, according to vendors, they can. Health plans purposely do not take advantage of this function because they generally are wary of publishing any proprietary cost data. Vendors that the authors spoke with use large claims extracts from third parties as their data source and update the data quarterly. Vendors vary in terms of the number of procedures and conditions about which they publish cost data (Table 7 on the following page). Health Care Cost Comparison Tools: A Market Under Construction | 9 Table 6. Cost Categories Displayed in Estimators Aetna BCBS of Tennessee Proprietary Proprietary Ingenix Subimo WebMD C O S T C AT E G O R Y episode-of-care cost tool episode-of-care cost tool Treatment Cost Estimator Treatment Cost Advisor CostEstimator Episode of care X X X X X Annual treatment X X X X The above two categories may include costs related to: Inpatient care X X X X Outpatient care X X X X X Office visit X X X X X Prescription drugs X X X X X C O S T C AT E G ORY DEFINITIONS The tool publishes information about the cost of… Episode of care: all medical claims and expenses associated with a typical procedure, including facility and professional costs and those of therapy, diagnostics, and drugs. Annual treatment: all medical claims and expenses associated with a year of treatment for a chronic medical condition (such as asthma), including facility and professional costs and those of therapy, diagnostics, and drugs. Inpatient care: hospital costs (excludes professional fees associated with procedures). Outpatient care: typical outpatient procedures (includes facility or site-of-service costs and professional fees). Office visit: to typical professionals and paraprofessionals, such as physicians, physical therapists, and occupational therapists. Prescription drugs: associated with medical conditions and/or procedures. Table 7. Cost Details Displayed in Estimators C O S T D E TA I L Aetna BCBS of Tennessee Ingenix Subimo WebMD Full charges X X (no health plan discount applied) Discounted rates X X X X Average cost* X X X X X Range of costs* X X X Comparative costs (e.g., $ vs. $$$) Cost to member X X (Future) (e.g., copay or co-insurance) Number of procedures for 116 conditions, 220 conditions, 50 procedures, which tool has data 90 procedures procedures, and 100 conditions, visits 200 visits or tests SOURCE(S) OF COST DATA Health plan Health plan Two third-party sources, Medicare and state inpatient Third-party health plan claims, third-party all-payer all-payer claims claims, health plan *Not provider-specific. C O S T D E TA I L DEFINITIONS Information represents… Full charges: “rack rates” that providers charge, not contracted rates that health plans negotiate with providers. Discounted rates: those that health plans negotiate with providers. Average cost: full charges or discounted rates across providers (not provider-specific). Range of costs: typical range of full charges or discounted rates across providers. Comparative costs: across providers and displayed symbolically (for example, $ vs. $$ vs. $$$ to denote different cost levels) rather than in specific dollar figures. Cost to member: what the consumer pays for the procedure or visit.; usually includes member-specific benefit information (for example, member’s copay and deductible). 10 | California HealthCare Foundation Another type of online tool enables consumers to to publish plan-specific costs. However, unlike compare hospital costs and/or quality. WebMD treatment cost estimators, these tools show hospital- and HealthGrades told the authors they built their specific costs, not averages. Vendors use all-payer hospital-comparison tools primarily to display data sources, including publicly available data from quality measures, and that health plans can choose to Medicare and state agencies, to gather information add cost information. If they do, only facility costs on hospital cost and quality. All but one vendor in are displayed, not all costs included in an episode this survey can customize their hospital comparison of care, which treatment-cost estimators do display. tool with health plan-specific cost information based For example, if the person contemplating hip on plans’ claims data (Table 9 on the next page). replacement were to use a hospital-comparison tool, she would see quality information, but the only cost The authors reviewed two other online cost tools information displayed would be about hospital costs, developed by two different health plans. One not about costs related to professional fees, pre- and displays costs for physician visits only; the other postoperative visits, diagnostic tests, or therapy. displays costs for office visits, inpatient procedures, Many tools display cost information only in a way and outpatient procedures. In its online provider that allows general comparisons — by using symbols directory, Aetna publishes physician-specific costs for such as $ vs. $$ vs. $$$ to denote different cost 25 common types of office visits. Once a health plan levels. The authors also interviewed a health plan, member has found a provider in the online directory, Blue Cross Blue Shield of Tennessee, and a public she can click on a link that takes her to a listing of agency, the Wisconsin Hospital Association, about the provider’s negotiated rates for these 25 common their hospital-comparison tools (Table 8). visit types. This is different from treatment cost estimators in two very important ways: (1) displayed Like treatment cost estimators, hospital comparison costs are not averages, but rather physician-specific tools developed by third parties can be customized contracted rates, and (2) the 25 visit types are not Table 8. Cost Categories Displayed in Hospital Comparison Tools BCBS of Tennessee WebMD Wisconsin Hospital Association C O S T C AT E G O R Y Proprietary hospital comparison tool HealthGrades SelectQualityCare Publicly available hospital comparison tool Episode of care Annual treatment The above two categories may include costs related to: Inpatient care X X X X (not procedure specific) (facility only) (facility only) (facility only) Outpatient care Office visit Prescription drugs C O S T C AT E G O R Y D EFINITIONS The tool publishes information about the cost of… Episode of care: all medical claims and expenses associated with a typical procedure, including facility and professional costs and those of therapy, diagnostics, and drugs. Annual treatment: all medical claims and expenses associated with a year of treatment for a chronic medical condition (such as asthma), including facility and professional costs and those of therapy, diagnostics, and drugs. Inpatient care: hospital costs (excludes professional fees associated with procedures). Outpatient care: typical outpatient procedures (includes facility or site-of-service costs and professional fees). Office visit: to typical professionals and paraprofessionals, such as physicians, physical therapists, and occupational therapists. Prescription drugs: associated with medical conditions and/or procedures. Health Care Cost Comparison Tools: A Market Under Construction | 11 Table 9. Cost Details Displayed in Hospital Comparison Tools BCBS of Tennessee WebMD Wisconsin Hospital Association C O S T D E TA I L Proprietary tool HealthGrades SelectQualityCare Publicly available tool Full charges X X X (no health plan discount applied) Discounted rates X X Average cost* X X Range of costs* X Comparative costs X X X (e.g., $ vs. $$$) Cost to member X (e.g., copay or co-insurance) Number of procedures for 95 procedures 163 procedures 64 procedures which tool has data (future: 56 episodes, 200 visits) SOURCE(S) OF COST DATA State hospital association Medicare inpatient claims Medicare and state State hospital association inpatient claims, health plan *Not provider-specific. C O S T D E TA I L DEFINITIONS Information represents… Full charges: “rack rates” that providers charge, not contracted rates that health plans negotiate with providers. Discounted rates: those that health plans negotiate with providers. Average cost: full charges or discounted rates across providers (not provider-specific). Range of costs: typical range of full charges or discounted rates across providers. Comparative costs: across providers and displayed symbolically (for example, $ vs. $$ vs. $$$ to denote different cost levels) rather than in specific dollar figures. Cost to member: what the consumer pays for the procedure or visit.; usually includes member-specific benefit information (for example, member’s copay and deductible). related to any medical conditions or procedures; health plans use their own fee schedules and claims therefore, for the cost information to be useful, the data as sources. member must know what type of visit is appropriate for her condition. Advantages of In-House Tools Why do health plans build their own online tools On the Web site of Blue Cross Blue Shield of rather than take advantage of vendors’ ready-made North Carolina, members can find an average cost products? and range of costs for common office visits and for inpatient and outpatient procedures. The averages Plans say their data are better and easier to obtain and ranges are based on full charges, not on rates than third-party data. All of the plans the authors the health plan has negotiated with providers. spoke with believed that their data were better than This information is similar to that published by those from third parties because the former are treatment cost estimators: It represents averages plan-specific, market-specific, and more timely than across providers. But the information is not as public information. One health plan said it built in- comprehensive because it does not list all pre- and house because it did not want to disclose discounts postoperative visits, diagnostic tests, therapy, and to third parties. One plan believed it could build and drugs associated with a medical procedure related to implement a solution faster than third parties could. an episode of care. For both of these online tools, the Two comments were: 12 | California HealthCare Foundation  “Because it’s negotiated rate data, we have better the marketplace. We were pushed by CDHPs and data and more data than the vendors. There was consumerism in general.” no need to use someone else.”  “We had already been on the path of developing  “We have a large market share, so we feel we have the tools. CDHP/market demand helped us sufficient data. Also, we don’t share allowed cost gain focus in developing the tools. There wasn’t with any third party as a matter of policy.” enough focus on these things before.” Pressure for Price Transparency Tool Shortcomings When the authors asked health plans and vendors Given the features and functions in today’s online what the catalyst has been in developing online tools that offer health care cost information, only tools for health care cost information, they cited motivated — and insured — consumers have the a handful of other plans as price-transparency patience and ability to assemble a whole picture vanguards. Two vendors said leading health plans of costs from disparate pieces of information. had specifically requested an online cost estimator. Because the tools do not enable consumers to Other vendors said the primary drivers were the shop around for services, they do not facilitate increased cost burden on health plan members who health care consumerism. In all but a few cases, have a consumer-directed health plan (CDHP), consumers cannot do side-by-side comparisons and employer demand. Comments from vendors of provider costs. Only hospital-comparison tools included these: into which health plans have imported their cost data allow consumers to see one provider’s costs vs.  “Most of our products are driven by leading-edge another’s. Available information gives consumers a clients. One major client drove development of rough view of some health care costs, but it lacks our treatment cost estimator. There are always the detail, accuracy, and personalization necessary early adopters, then others catch up.” for comparison shopping. The tools offer more education than help with decision-making.  “Health plans are being pressured by employers for transparency, and starting to get pressure The third-party vendors and health plans the from consumers. There’s a push for transparency authors spoke with recognize the limitations of their in industry. First it comes from employers, and online tools. They said their episode-of-care cost health plans are asking on behalf of employers.” information is less specific than they would like. Such information is generic: It does not take into One health plan said it wanted to take a stand and account gender, age, and comorbidities. Moreover, play a leading role in price transparency, but most the tools are not integrated with health content plans indicated that a desire to educate consumers and other online tools, such as those that compare about the cost of care was their primary motivation. quality or drug costs. They said CDHPs were a secondary motivator, although one plan noted that CDHPs gave it better The authors concluded that the tools would not direction in developing the tools. Among health meet the needs of the three typical consumers plans’ comments were these: identified in Phase 1. An uninsured pregnant  “Our members had forgotten what services cost. woman, for example, would find it impossible to They thought the copayment was how much it estimate the episode cost of a pregnancy, as treatment cost. We did not want to change that model, but cost estimators are only available on Web sites of wanted them to see what the actual cost range is. health plans that purchase such estimators. Yet these It was an internal decision, but clearly spurred by are the only tools that show episode treatment costs, Health Care Cost Comparison Tools: A Market Under Construction | 13 a key factor in pregnancy costs, which encompass access the tools to find out how much individual many different types of costs and claims. Estimators drugs cost, but they only get average retail prices. can help insured women understand the average cost of pregnancy, but information is not hospital- Tools Are Neither Widespread nor or physician-specific. Hospital comparison tools Widely Used display only facility costs, not episode costs. Even When the authors asked two major health insurers when cost information is available, it is fragmented in California what types of online health care cost and not tailored to consumers’ decisions about cost information tools they provide to members, their or quality trade-offs. Again, a consumer who would answers varied widely. Blue Cross of California offers like to evaluate quality information alongside cost the Subimo suite of tools, including a treatment cost information faces a formidable challenge. estimator, one that displays the cost of physician visits (averages across the country), and a tool for Similarly, a recently diagnosed diabetic who tries prescription drug costs. Blue Shield of California to estimate the annual cost of diabetes treatment offers much less; its members only have access to would have difficulty, as the only public information WebMD’s hospital comparison tool, which displays available online about medication costs is from quality and comparative cost information, such as $ Consumer Reports and retail drug sites, such as vs. $$$. A visit to Kaiser Permanente’s Web site for drugstore.com. For insured consumers, treatment Northern California members revealed that Kaiser cost estimators can help estimate annual costs, which does not offer its members any tools for determining include office visits and lab tests, but the information the price of health care services. is not personalized. For example, while a newly diagnosed diabetic can see what the average diabetic Use of online tools to assess cost information has pays yearly, he cannot customize the price based on been low so far, according to health plans and his particular medication use and expected number vendors. They said health plans can increase such of office visits. Only one tool in this study allows use if they do more marketing, communicate better consumers to customize the information based with plan members, make sure their Web site is on their history of doctor visits and prescription user friendly, and display the cost tool prominently. regimen, and even then, the results are not provider- A vendor noted that a plan generally can expect specific. Consumers who want a more accurate look one visit to its cost tool for every nine searches in at their out-of-pocket responsibility would have to its provider directory. HealthGrades reports higher match the estimated annual treatment costs with usage than other vendors because of its direct- drug costs they find elsewhere. to-consumer model, in which anyone — not just health plan members or employees — can get the Finally, regarding the consumer who takes multiple information for a fee. prescription drugs, the authors concluded that such a person, if insured, could easily look up her Two comments from health plans were: copayment for each prescribed drug, but that few  “Until what consumers pay out-of-pocket aligns consumers would be able to add up the total cost of with hospital charges, there won’t be a lot of all their medications. Nor could anyone create an demand for it.” annual prescription drug budget using these tools. For someone in a high-deductible plan who will have  “It’s a challenge to get people to be more to pay out of pocket up to the deductible, publicly consumer-oriented and to come to our site for available tools for comparing drug costs rarely show information on their health. The tool usage has what the health plan must pay for a prescription been lower than where we want it.” under the discount it gets. The uninsured also can 14 | California HealthCare Foundation Comments from vendors included these:  “We did get some negative feedback. There was the fear of opening the black box.”  “Usage varies significantly by client. The question should be: How often is it used compared to Vendors’ comments included these: other consumer tools?”  “Employers have appreciated the information, but  “We have found that communication, education, they want more specific information (actual cost) and placement — an integrated approach — helps and broader information (visits, tests). And they get members online. When you have solid want the info to be more personalized based on communication and placement, you get better members’ benefits.” usage.”  “Health plans love it and want it. The provider All of the vendors the authors spoke with said they community is seemingly very comfortable with collect revenues from health plans based on a per- it. The treatment cost estimator is not facility- or member-per month fee, not on how many people provider-specific — this one is not controversial.” actually use the tools. Thus, it is in health plans’ financial interest to boost such use as much as possible. Health plans and vendors anticipate more price transparency in the future. They said health plan Bullish about the Future members’ growing financial burden will drive greater Interviews revealed that employers, health plans, and use of cost tools, and that employers increasingly are providers have received positive feedback about their demanding the information. tools. Given that treatment cost estimators do not display provider-specific costs, they have not been As for changes on the horizon, they predict there controversial. Two organizations the authors spoke will be more information about physician cost and with indicated that even hospitals use the tools and quality, which is difficult to get today. They also are moving toward price transparency. Two health believe there will be better decision support to help plans said they were apprehensive about hospital- consumers finance the cost of their health care and specific or physician-specific cost tools and about to budget for likely expenses. Vendors, especially, providers’ reactions to making this information said they expect to see more-specific provider costs, widely available. One health plan said its providers more sophistication of episode costs, and more were concerned that consumers would judge health personalization of costs for health plan members. care value based on cost alone. Another also worried that providers might collude on contracts. Recognizing the difficulty that consumers have piecing together information from different cost or Among comments from health plans were these: quality tools, both health plans and vendors would like better integration of these tools. Among their  “We’ve had good feedback from employers and goals are creating a seamless user experience, and brokers. We get questions in large [requests for more integration of cost and quality information, proposals]: Do we have this tool and that tool?” health content, and health budgeting tools.  “Hospitals’ response conceptually has been that it makes sense to get the quality info out there, Health plans offered these comments: but they’re not sure about cost info. They worry  “We’ll put more detail in our hospital cost about people judging quality based on price and estimator. Our focus next year will be to deploy that patients will go to a less expensive hospital, some sort of physician cost comparison tool based thinking some hospitals are just high cost, as on individual physicians.” opposed to being better.” Health Care Cost Comparison Tools: A Market Under Construction | 15  “We would like to blend all the pieces together so that you don’t have to be within the health care cost estimator tool and then jump out to start a drug comparison search. Or so that you can see the quality information with the cost information.” Among vendors’ comments were these:  “Members will be in a position where they want to go to one site and one portal to make health and benefit management decisions. Point solutions will not do. We want to integrate across our tools.”  “I don’t know if we’ll do more procedures — more isn’t necessarily better. We’re trying to be smarter about our episodes and grouping codes.”  “We fully envision tools that evolve to provide recommendations or strategies for saving money.” 16 | California HealthCare Foundation V. Recommendations To maximize the value and use of online cost tools, the authors recommend that developers:  Move past educating consumers and enable them to comparison shop. The cost information available today is limited. Consumers who want to compare providers’ prices are not able to do so easily, even though comparison shopping will be especially important to plan members who have high-deductible benefits. Health plans, employers, and vendors should support comparison shopping as they upgrade and add tool features and functions.  Make cost information available to the uninsured, who do not typically have access to this information even though they must pay for all health care expenses out of pocket. Such information, especially about treatment episodes and annual treatments, is unavailable publicly. Health plans should display summary (as opposed to detailed) cost information in front of their firewalls. This would also boost use of tools by members who have yet to register on the plans’ Web sites.  Integrate cost and quality information in online tools. Vendors and health plans should educate consumers about the importance of shopping for health care value — that is, high quality at low cost. Value is not determined by price or quality alone.  Promote collaboration among hospitals, providers, and health plan members as a way to gain support for tools. Health plans told the authors that when they reached out to hospitals and providers in their networks, it helped assuage fears and guard against negative reactions to the posting of providers’ prices online. In addition, health plans and vendors that formally solicited consumer feedback said this helped ensure that the tools they built were relevant to consumers’ needs and preferences. Health Care Cost Comparison Tools: A Market Under Construction | 17 Endnotes 1. Respondents could select more than one “major contributor.” 2. Forrester defines “technology optimists” as those who embrace technology and believe it will make their lives simpler and more enjoyable, even if they are concerned about its impact on society as a whole. 18 | California HealthCare Foundation