The ABCs of shopping for healthcare

Did you know:

• 94% of online shoppers invest time to find the lowest price for commodity products?
• 36% spend 30+ minutes comparison shopping before making a decision on purchasing a commodity product; 65% spend 16+ minutes doing so?
• 51% visit 4+ sites before finalizing a purchase?

Yet according to one survey released last year, as many as two-thirds (64%) of Americans have never tried to find the price of a healthcare service—something that could have far-reaching implications for their wallet, their health and their quality of life. So why the disconnect?

They don’t know they can

For many Americans, the idea that you can “shop” for healthcare comes as a surprise. For decades, individuals simply went where their doctors told them to go for tests and procedures, and filled their prescriptions at the most convenient in-network pharmacy. Yet, despite recent government regulations requiring hospitals and plan sponsors to provide pricing information and TV ads for GoodRx and SingleCare (to name a few), only about one-third of consumers say they were aware they could compare costs for healthcare procedures or prescription drugs.

They don’t know how

Even if employees do know they can shop for care, knowing HOW to do it can be a big barrier to taking action. Let them know how they can research prices, and refer them to the specific tools available to them.

For instance, for prescription drugs, you can direct employees to GoodRx.com, BuzzRx.com, Singlecare.com or RxSaver.com. You may even want to let them know that in some cases, paying cash out of pocket will cost them less than running the prescription through their insurance (for example, Walmart, Kroger, H-E-B and a handful of other stores offer generics and certain other medications as low as $3 or $4. And other options, such as Amazon Pharmacy or CostPlus Drugs, can offer real savings.

For other services, such as medical tests, outpatient procedures, or surgeries, your carrier’s website; independent sites such as www.fairhealthconsumer.org, www.healtcarebluebook.com, or www.healthcarepricetool.com; or the websites of local hospitals can provide useful information. You may want to consider contracting with an advocacy and transparency service, which can do the research for your employee and even provide recommendations for in-network providers or facilities. These services can be particularly helpful as they can factor in the patient’s cost-sharing status so the employee can understand their true cost.

They don’t get the “why”

You can lead a horse to water but you can’t make them drink, according to the old adage. But that may be because the horse doesn’t understand what drinking can do for them!

Help your employees understand—using concrete examples—just WHY price shopping for healthcare products and services can make such a difference. (A study published in JAMA Internal Medicine earlier this year found significant price differences for identical medical services and procedures. For example, when “secret shoppers” called hospitals to request price estimates for vaginal childbirth at top-ranked facilities, the prices ranged from $0 to $55,221.) The retail cost of a 30 tablet prescription of 40 mg of atorvastatin ranges from $18 to $128 at most chain pharmacies…but can cost as little as $2.50 to $18.97 with a GoodRx coupon.

Sharing a scenario like this can highlight just how much an employee can save with a little bit of effort:

• You need a diagnostic test done. You call the hospital your doctor is affiliated with to find out how much it costs and they quote you $5,000—their “chargemaster” rate (their “normal” retail cost). But you have insurance, and your carrier has negotiated a 50% discount with that hospital for that procedure. The rate they’ll charge the insurance company is $2,500.
• If you have 80/20 coinsurance and have met your deductible already, you will pay 20% of that $2,500, or $500 out of your pocket. Your insurer will pay the remaining $2,000. But what if you offered to pay cash? You might find that the cash price for that very same procedure is only $450. So, you could save $50 ($500 – $450) by paying cash instead of using your insurance.
• Curious, you call another in-network hospital in the area and ask them the same question. Their chargemaster rate is only $3,000, but your insurance company negotiated a 40% discount, to $1,200. If you’ve met your deductible, you’ll pay just $240 (20% of $1,200) and your insurance will pay $960. And that hospital’s cash price is $300.

So you could pay $240—or $500—all for the same exact procedure!

Investing in a communications plan to explain to employees the what, how and why of shopping for healthcare can save both employees and the company hundreds if not thousands of dollars per year. And the more you can do to support employees in that effort—be it promoting your carrier’s website or partnering with an advocacy service provider who can do the heavy lifting for your employees, the greater the return on your investment!