I thought people should shop more for health care. Then I actually tried it.

By Sarah Kliff
Vox, October 19, 2015

I spend most of my time writing about the health care system. But every now and again, I actually use the system, too. This past week, those two activities collided on a very specific subject: shopping for better medical prices, and why patients don’t do it.

I recently decided to select a medical service strictly on price. This is something many economists think ought to happen more, to lower health spending. I was ready to do my part. Most patients, though, don’t do this, even when they have to spend way more out of pocket to get the more expensive care.

In retrospect, I wish I hadn’t either. The lower-cost procedure — in this case, an MRI — did indeed save my insurance plan money. But it created a worse medical experience for me, and was helpful in highlighting the trade-offs that patients must make in the shopping experience.

This past June, I stress-fractured my left foot. Though I spent six weeks in a very stylish walking cast over the summer, the injury has stubbornly refused to heal. Earlier this fall I saw an orthopedic specialist, who recommended an MRI to get a better sense of what exactly was wrong. He referred me to a large academic medical center for the scan, and I made an appointment.

My insurance quickly intervened — and, as a health care wonk, I was very excited!

I got a phone call one evening from a woman who asked if I’d consider switching to a private imaging center nearby that charged about $400 for an MRI — about half as much as the academic center cost. She offered to help me make the appointment, right then and there.

For me, the cost would be exactly the same; I’d have a $50 copay for the procedure regardless of where I got my foot scanned. But I’d long understood MRIs as a commodity health care service, essentially an advanced photograph that would come out the same regardless of who snapped it. So, in the sake of doing my part to lower national health spending, I switched to the cheaper center.

To preface: I understand my list of complaints is relative minor and at the end of the day probably won’t affect the ultimate outcome of my care. At the same time, I didn’t think I was making any trade-off when I chose a cheaper MRI. Now I know that isn’t true.

The first issue arose when I went back to the orthopedic specialist.

He wasn’t familiar with the place my insurer sent me, and the imaging center had forgotten to fax him a copy of my test. This meant a half-hour wait for me in his office, and more work for the office administrators to track down the images and radiological report.

Getting an MRI at the expensive medical center would have meant a smoother experience. The administrators there would know the exact drill of how and when to ship off my scan. Instead, I inadvertently created a new inefficiency in my own attempt to reduce wasteful spending.

Then there was the image itself. It did show a stress fracture that hadn’t healed, but it was blurry and a little harder for the doctor to make out what exactly was going on. The academic center he refers patients to, he told me, typically sends back much clearer images.

Knowing what I know now, I’m way more torn on whether I would choose the lower-cost MRI facility.

On the one hand, I did save my insurance plan about $400. If everyone at Vox shopped like I did, then that might do a lot of work to reduce our premiums. That would probably make us all pretty happy! My slightly blurry scan was still enough for my doctor to diagnose the fracture, although I still don’t know if he’d have seen something else on a clearer image.

At the same time, my own experience convinces me I’ve downplayed the trade-offs inherent in shopping for even basic health services. If I went back and did it again, I probably would have gone to the academic medical center for the scan.

Recently, I wrote about a new study looking at 75,000 patients who switched from a no-deductible plan to one requiring $3,750 in spending before the benefits kicked in. It showed that even with that really high deductible, patients didn’t shop on price. Instead, they saved money by just going to the doctor less.

One economist who contributed to the study described the finding as “surprising,” and I agreed: When patients have to cover the full cost of their health care, why wouldn’t they look for a better deal? I even called out MRIs specifically as an area where you’d expect to see price shopping but didn’t.

My own health care experience is far from unique. But it was a helpful, first-person demonstration of how shopping for health care might not be a zero-sum game, and that even with basic services, there can be clear winners and losers.

http://www.vox.com/2015/10/19/9567991/health-care-shopping-mri

One anecdote does not a study make. But Sarah Kliff is a very astute observer of our health care system, and she has an important lesson for us that further challenges the rationale of consumer-directed health care (CDHC).

The concept behind CDHC is that the consumers (i.e., patients) are placed in charge of a portion of the spending on health care, through deductibles and other cost sharing, by using their own money. They then, theoretically, are motivated to shop for better prices. Although Sarah Kliff had met her deductible and thus would not benefit by price shopping, as a well informed journalist covering health care financing, she wanted to see how this concept might work anyway.

As she explains, she accepted the advice given in a cold call from a representative of her insurer – a representative who supposedly assists with obtaining higher quality care at lower prices. Indeed, the price was lower – for the insurer – but the quality was worse, and the patient experience was inferior. (It is ironic that HHS allows the insurers to log these interventions as “quality improvement” that applies to the medical loss ratio, allowing the insurers to retain even more revenue as profits).

She mentions a recent article of hers (covered in a Quote of the Day last week) about an important study that showed that patients with high deductibles do not shop health care prices. Rather the study showed that patients reduce their use of health care services – much of it that would be beneficial – and the sick do so at a greater rate. Thus CDHC does not achieve its goal of reducing prices but rather has the perverse result of reducing beneficial health care services instead.

We want a system that improves quality and the patient experiences while using patient-friendly methods of containing spending. We will not get that from the private insurers, but we would achieve that goal if we established our own public, single-payer national health program.