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Employers use healthcare transparency tools for patient engagement

Accenture research shows that, although employers are investing in healthcare transparency tools, patient engagement remains a struggle.

Overview

Consumers have been steadily taking on a larger proportion of the cost of their healthcare for more than two decades. In fact, according to figures from the Centers for Medicare & Medicaid Services,1 out-of-pocket costs increased at a compound annual growth rate of 3.9 percent from 2000-2011.

This has prompted calls for a closer examination of costs and a rising interest in the use of transparency tools for understanding and comparing prices for a service before going to a provider.

Transparency tools have taken off in many industries—consumers price trips through Kayak, contrast car insurance prices on Progressive, and read restaurant ratings and reviews on Yelp. So why haven’t these tools captured the interest of employees who are shopping for healthcare plans?

Employers who elect to offer a healthcare transparency tool spend an average of $2 to $5 per employee per month. However, Accenture qualitative research indicates employee usage rates only range from less than 15 percent to as much as 20 percent—rates that lag published reports.

1 Centers for Medicare & Medicaid Services, National Health Expenditures Aggregate, Selected Calendar Years 1960-2010, online at www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/downloads/tables.pdf

Background

After interviewing a dozen benefits directors and transparency tool leaders,2 Accenture found that many companies are leaping into transparency investments, despite unproven ROI.

The move is not without cause. Seventy-two percent of retail healthcare consumers are most concerned about affordability, and 60 percent say it’s most important to have low out-of-pocket costs when seeing a doctor.3

Not long ago, the only reliable method patients had to estimate medical costs was to provide a copayment then wait for the subsequent bill or explanation of benefits to arrive via mail. Now, consumer-facing tools and capabilities help employees to proactively make care decisions by reviewing pricing, quality ratings and user feedback across a variety of channels.

Some employers offer incentives to use these tools, such as raffles or sign-up bonuses. But, despite these incentives, patient engagement remains a struggle.

2 Interviews were 40-60 minutes long, and were conducted in the US in July to August 2013.

3 2012 Accenture Healthcare Consumer Survey

Analysis

Accenture’s interviews revealed that many purchasers of transparency tools are not focused on pure ROI and are often unsure how to attribute savings to one tool or initiative. Instead, they cite the broader goal of using transparency tools to engage employees.

Employers see benefits in transparency tools, such as cost savings and even health benefits. In fact, 57 percent of employers say that lack of engagement is the biggest obstacle to changing their employees’ health habits.4

A 2012 focus group study conducted by the National Committee for Quality Assurance (NCQA) found that many consumers initially associate higher costs—and more tests and procedures— with higher quality.

The study notes that consumers need to see cost and quality information together to understand that more expensive is not better, and that overall value means the best combination of cost and quality.5

For instance, in a controlled, randomized experiment in which consumers were given easy-to-understand information on price and quality, 90 percent chose the best value provider (defined as lowest price with best quality).6

4 17th Annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care, 2012.

5 California HealthCare Foundation, Value Judgment: Helping Health Care Consumers Use Quality and Cost Information, Issue Brief, published online December, 2012, www.chcf.org/~/media/MEDIA%20LIBRARY%20Files/PDF/V/PDF%20ValueJudgmentQualityCostInformation.pdf

6 Hibbard JH, Greene J, Sofaer S, Firminger K, and J Hirsh, An Experiment Shows that a Well-Designed Report on Costs and Quality Can Help Consumers Choose High-Value Health Care, Health Affairs 2012 31(3) 560

Recommendations

Low patient engagement numbers may diminish over time as early adopters retrain patients to think and act more like consumers. To begin changing behavior and lowering healthcare cost, companies are making investments to build new functionality and provide a richer member experience.

Some notable consumer-facing tools and capabilities under development across transparency companies include:

  • Pricing: Allows sort/filter/comparison relative to price of procedures and bundled procedures. Sustained usage will come from accurately displayed out-of-pocket fees.

  • Health literacy: Offers content modified and targeted to consumers to guide and inform healthcare decisions.

  • Social: Creates a community in which users share health-related information, experiences and decisions.

  • Quality measurement: Provides quality indexes that allow the consumer to easily compare and contrast healthcare providers.

  • Provider reviews: Allows users to share or read reviews about healthcare providers, facilitating or confirming decisions.

  • Incentives / penalties: Entices users to modify behavior based on “carrots and sticks.”

  • Wellness tracking: Shares tools to guide and inform health and lifestyle choices.

  • Scheduling: Allows users to arrange or plan a procedure or visit for a specific time, and receive immediate confirmation.

Employers have taken a leap of faith to invest in some tools that haven’t yet proven their worth. The rewards may not be apparent yet but, with the continued trend of rising out-of-pocket costs, companies will have to engage employees and invest in tools that enable consumer-driven decisions regarding tradeoffs about cost and/or quality.

For some higher deductible and consumer-directed health plans, pricing transparency tools are becoming a requirement for consumers.

Industry & topics highlighted

Health