Transforming Health Care Through Evidence and Collaboration
Transforming Health Care Through Evidence and Collaboration
The NIHCM Foundation is a nonprofit, nonpartisan organization dedicated to improving the effectiveness, efficiency and quality of America's health care system.
  • Data Insights

    The second part in this ACEs infographic series, this infographic explores the challenges facing children and families and provides actionable guidance to nurture resilience and support caregivers and parents.

    Part 1 Part 2
  • Data Insights

    The COVID-19 pandemic has placed a spotlight on the link between systemic racism and health in many communities. This new NIHCM infographic clarifies the relationship between long-standing social and economic inequities and health disparities affecting Black Americans, over the life course and in relation to COVID-19.

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  • Data Insights

    Globally, outdoor air pollution is attributed to 4.2 million deaths every year. This infographic explores air pollution in America and the unequal impact it has on Black and Latinx communities. It also looks at the current solutions that are already available to improve air quality.

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  • Awards

    We are honored to announce the winners for the 26th Annual Health Care Research and Journalism Awards. This year’s awards are virtual because of the COVID-19 pandemic, yet we invite you to meet the winners and learn about their award-winning work. NIHCM is also announcing the largest grant program in our history — $1 million to support work in journalism and research.

    Meet the Winners Press Release
  • Data Insights

    This infographic highlights the health challenges faced by the homeless community and outlines short and long term solutions to improve the health and well-being of these individuals, through social, economic and housing interventions.

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  • Data Insights

    This new Data Insights highlights the rapid rise in overdose deaths involving cocaine and methamphetamine, illustrates the geographic variations in utilization and death rates, and quantifies the increasing burden that these drugs are placing on the hospital system.

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Events

September 23, 2020
Latino Graphic

This webinar will highlight how systemic racism, the challenges of immigration, language barriers and other factors harm the health and well-being of Latinos.

September 10, 2020
Protecting Our Children

This webinar brought together experts to provide insight on early childhood development, ACEs and COVID-19’s impact on children.

In the News

September 2020
Population Health Spotlight
september-newsletter 8

How Can We Increase Patient Shopping for High-Value Providers?

Why This Study Is Important

Prices for common medical services often vary significantly across providers even when similar quality can be expected from all providers. Opportunities for cost savings exist if patients using these services can be encouraged to seek out lower-priced providers. Evidence is mounting, however, that price transparency tools do little to encourage such price shopping; only a very small portion of patients use these tools, limiting their overall impact. This finding is seen even among patients in high deductible health plans, who should have a strong financial incentive to shop for lower-priced providers. This study examines the additive impact of an alternative way to incent patients to price shop for specific services, reference pricing. With reference pricing, patients have access to a broad network of providers but must pay the full difference between the provider’s price and a pre-set threshold if they receive care from a high-priced provider.

What This Study Found

  • When given access to a price transparency tool alone, employees of a major national retailer were not more likely to shop for lower-priced providers, despite being enrolled in a high deductible health plan.
  • When the incentives of reference pricing were added to the price transparency tool, patients made large shifts to lower-priced providers. The average price paid for a laboratory test fell by 27 percent once reference pricing was introduced, and the average price paid per imaging test fell by 13 percent. These changes reflect price shopping by patients who used the targeted services, not a response by providers to lower their prices.
  • Considering the average prices for laboratory and imaging services and the actual volume of such care received by the employees, their price shopping translated into $1.7 million lower spending on laboratory tests and almost $200,000 in savings on imaging tests.
  • The post-reference pricing decrease in prices was sustained throughout the study period for laboratory tests, but dissipated for imaging tests by the end of the period.

What These Findings Mean

With traditional insurance benefits shielding patients from the full financial consequences of provider price differences, price transparency alone is ineffective at getting patients to shift to lower-priced providers because it does not change the underlying financial incentives to price shop. In order to encourage patients to seek out higher-value providers, they must be given incentives to care about prices. By sharpening patients’ financial incentives and signaling them about provider value, reference pricing can simultaneously address the financial and informational barriers to price shopping.

More About This Study

This study estimated difference-in-difference models to explore how price transparency alone and in combination with reference pricing affected trends in the prices paid for laboratory tests and diagnostic imaging procedures. Data for the treatment group reflected four years of claims experience for a large national employer who initially implemented a price transparency tool then added reference pricing, first for laboratory tests and later for diagnostic imaging. Data for the control group came from a matched set of claims from a nationwide insurer who had not implemented reference pricing. By comparing the impact of the sequential implementation of two different programs within the same firm, this study minimized estimation problems that could result if different types of firms opt to adopt price transparency vs. reference pricing. In addition to examining the program impacts on average prices, the work also considered how the distribution of prices changed.

Full Citation

Whaley C, Brown T, and Robinson J. “Consumer Responses to Price Transparency Alone Versus Price Transparency Combined with Reference Pricing.” American Journal of Health Economics (forthcoming)

For more information about this study, contact Dr. Christopher Whaley at This email address is being protected from spambots. You need JavaScript enabled to view it..
For more information about the NIHCM Foundation Investigator-Initiated Research Grant Program, contact Dr. Julie Schoenman at 202-296-4426.

Read More

This Research Insights summarizes a new study that found that reference pricing helped to reduce health spending by spurring consumers to shop around for the best value medical services.

Events

September 23, 2020
Latino Graphic

This webinar will highlight how systemic racism, the challenges of immigration, language barriers and other factors harm the health and well-being of Latinos.

September 10, 2020
Protecting Our Children

This webinar brought together experts to provide insight on early childhood development, ACEs and COVID-19’s impact on children.

In the News

September 2020
Population Health Spotlight
september-newsletter 8

Grants

Journalism GrantsJournalism Grant Program

The deadline for the 2020-2021 round of grant making has passed. NIHCM will notify the grant winners in the fall.

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NYTUpshotLogo

Investigator-Initiated Research Grant Program

The deadline for the 2020-2021 round of grant making has passed. Finalists have been notified.

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Awards

The 26th Annual Research and Journalism Awards

Winners Announcment 2018 1

We are honored to announce the winners for the 26th Annual Health Care Research and Journalism Awards.

Learn More