The recent IPO of Castlight Health shows a huge need for solutions to healthcare's shopping conundrum, especially among employers. But why is consumer buy-in still limited?
Much of the problem may be due to the fact that American healthcare is in the early stages of a transparency movement. Part of it, though, for employers and health plans with relatively advanced cost comparison tools, may be weak marketing.
Only around two percent of Americans with health insurance are using the cost estimator tools offered by over 95 percent of U.S. health plans, according to a recent Catalyst for Payment Reform survey.
"We're seeing similar results," said Brodie Dychinco, strategy VP at HealthSparq, a cost and quality comparison technology company owned by Cambia Health Solutions, the parent company of Regence Blue Cross that's nurturing more than a few healthcare startups.
Of the 60 insurers HealthSparq counts among its clients, many of them Blues, roughly 20 percent of members are using their health plans' online portals, and of those only about 10 percent end up using the cost calculator tools, Dychinco said.
"Let's admit it, it's not a fun process to shop for healthcare," he said.
Dychinco is part of the team that's helped build HealthSparq over the past two years. The platform uses a health plan's claims data and benefits contracts to give members cost estimates at different providers for a range of services, tests, surgeries and treatments, with real-time estimates of what members will have to pay based on their deductibles, co-pays and claims to date.
Much like other cost estimator tools such as the Healthcare Bluebook and providers and health plans themselves, HealthSparq isn't able to give customers an exact cost of a test or treatment, although it does offer a fairly close range. Estimating a member's costs for back surgery, for instance, Healthsparq lists several providers where the surgery would cost the patient between $2,340 to $3,400 and $7,410 to $9,110, covering the whole episode, including imaging, testing and drugs, and physical therapy visits.
"We believe in the power of large datasets and that the resulting transparency is larger than working with small data sets," Dychinco said. "Now the challenge is to market it," and to help insurers and employers create "engagement strategies," he said.
Patient outreach necessary
Part of the slow uptake stems from the fact that many insurers, beyond HealthSparq's clients, simply include their cost calculators in their online portal and wait for members to find it, rather than actively pitching or promoting it on the homepage or in mailings.
"Nobody knows where they are," Dychinco said. "When people think about shopping for healthcare -- and I use shopping in quotes -- they're generally not thinking about going to their health plan, they're thinking about going to Google."
Another problem is that some Americans may find healthcare shopping too complex and overwhelming and could benefit from peer advice, which is one reason why HealthSparq and other comparison platforms are incorporating decision support and social community features.
"Not everyone is ready to look at facts and figures and may need a bump from someone else who's one or two steps ahead of them," Dynchino said.
The healthcare transparency market is also, in general, quite nascent.
Ten years ago not only was the data technology behind companies like HealthSparq, Healthcare Bluebook and Castlight still evolving, but most consumers covered by employer-sponsored plans didn't really need to shop for healthcare because their deductibles and co-pays were minimal.
The rise of high-deductible health plans creates an impetus for healthcare shopping, and it also leaves health plans and providers struggling to motivate consumers to shop for something that's always been considered separate from the rest of the economy (in addition to giving them the information they need to shop).
Before joining Regence and Cambia Health, Dynchino worked in biotechnology on a project probing the origins of antibiotic resistance -- a problem about as huge and complicated, if more directly lethal, as healthcare transparency.
"The discovery of trying to encourage people to shop for healthcare is equally exciting." While there is still a ways to go, he said, there have been "broad steps in trying to take motivation and psychological principles and bringing that to the healthcare shopping experience."