When it comes to health care services, consumers are missing out on big savings

Consumers who drive a hard bargain when shopping for a house or car seldom do the same when seeking health care. “People don’t shop for health care the way they shop for other services,” said Zack Cooper, an associate professor at the Yale School of Public Health.

Cooper analyzed 2013 claims from a national health insurance carrier, focusing on lower-limb MRIs. He found that consumers traveled an average of 26 minutes for the procedure, passing an average of six places offering cheaper prices. The policyholders had access to a price-shopping tool, but fewer than 1% of them actually used it, according to Cooper’s research.

Related: Consumers are willing to shop around for a more transparent health care experience

The patient and insurer paid a combined $851, with the patient footing $307 and the insurance company paying $544, the research showed. If patients had used the lowest-cost MRI provider within that same travel span, they could have paid $222 and their carrier could have paid $324. That’s a combined $546 cost and an almost 36% price cut.

One explanation for this behavior is that most consumers rely on referrals from their primary care physician. Many doctors may not be aware of the price variability and might be sticking with the provider they’ve always used, Cooper said.

“Rather than price shopping for lower-limb MRI scans, patients appear to receive care at the usual locations to which their physician traditionally refers patients,” he said. “This key finding underscores how important physician advice is to patient decision-making.”

Another explanation is the fact that hospitals increasingly own physician practices. Doctors in these practices might have an incentive to refer other parts of the hospital-owned business. The research showed patients in hospital-owed practices were more likely to go to hospital-owned imaging centers, where average MRI costs were $1,475 vs. $645 for standalone imaging centers. Part of the solution is encouraging doctors to become more aware of potential cost savings, Cooper said. “Let’s target them with the information and incentives, and not beat the patient over the head,” he said.

Patient advocates believe new price transparency requirements will help. Beginning this year, hospitals must publicly list the prices they will charge insurance companies and patients who pay cash for procedures. In 2023, another federal rule will require insurance companies to offer consumer-friendly rules on prices and rates for various types of care and procedures.

“Patients haven’t gone shopping, because this is not easy,” said Marni Carey, executive director of the Association of Independent Doctors. “Once the Band-Aids are ripped up on all of these prices and they see the light of day, we will shop online.”

Read more: 

• Indiana employer group’s research shines a light on price transparency
• Unraveling the complexity of our health care billing system
• Disciplined consumers focused on health care cost, value