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

    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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  • Data Insights

    This infographic delves into an emerging public health emergency involving rapidly rising rates of stimulant use and related overdose deaths, which has been occurring in the shadow of the opioid crisis.

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  • News

    NIHCM would like to provide you and your organizations with a list of resources concerning COVID-19 and vulnerable populations. We will continually update this list.

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Events

August 21, 2020
Environmental

This webinar will bring together experts to provide insights on air pollution and environmental injustice during a time of increased inequality.

August 11, 2020
Racism and Health Graphic

This webinar discussed how systemic racism harms health, and how solutions-based approaches at the state and community level are making a difference.

In the News

August 2020
Population Health Spotlight
August Newsletter

Is Health Care Shoppable?

Why This Study Is Important

Efforts to encourage patients to use better-value providers, such as higher cost sharing and price transparency, will succeed only if patients can and will shop for value. This study examines whether patients price shop when deciding which imaging providers to use for lower-limb MRIs and estimates how much money could be saved if patients shopped more. Lower-limb MRIs should be highly shoppable because the service is scheduled in advance, clinical quality does not vary meaningfully across providers, and prices are widely variable.

What This Study Found

  • Patients often received their MRIs from higher-priced providers even when lower-priced options were available closer to home. On average, patients bypassed six lower-priced providers on their way to the higher-priced option.
  • If patients spent no additional time traveling but selected the lowest-priced provider available, total MRI spending would be 36 percent lower. If they extended their travel time to one hour to reach the lowest-priced provider they could cut overall MRI spending by 55 percent.
  • Despite significant price variation and high cost sharing for MRIs, out-of-pocket costs played only a very minor role in patient decisions about where to receive care. Less than one percent of patients used a price transparency tool to investigate MRI prices and compute their out-of-pocket costs for different providers.
  • Referring physicians are the key determinant of where patients receive care, and they tend to refer their patients to a very small set of imaging providers regardless of prices charged.
  • Patients of physicians in hospital-owned practices were significantly more likely to be referred to a hospital-based imaging center, where MRI prices are 2.3 times higher than in free-standing centers: $1,474 vs. $643.

What These Findings Mean

  • Even for a service that should be highly shoppable, patients spent considerably more than necessary by using higher-priced providers.
  • Price transparency tools and cost sharing were ineffective in motivating patients to shop, while referring physicians’ advice heavily influenced care location decisions.
  • Rather than relying on patients to shop, a more promising approach may be to equip referring physicians with price information and give them incentives to make more cost-efficient referrals beyond the providers they are in the habit of recommending.
  • The fact that hospital-owned practices refer to more costly hospital-based imaging providers also raises antitrust concerns as more and more practices convert to hospital ownership.

More About This Study

This study used 2013 claims from a national private health insurer to examine prices and use of lower-limb MRIs. An online routing application was used to identify all MRI providers within a 60-minute drive from each patient’s home. Each provider’s MRI price was computed as the average of its transaction prices, then this price was divided into the portions that would have been paid by the patient and the insurer. The price differences between the MRI provider actually used and the lowest-price MRI provider were what each party could have saved if the lower-priced option had been used. Alternative savings estimates were generated for provider sets located within shorter drive times. ANOVA and multivariate regressions identified factors influencing where patients receive care.

Full Citation

Chernew M, Cooper Z, Larsen-Hallock E, and Scott Morton F. “Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRIs.” NBER Working Paper No. 24869, July 2018.

For more information about this study, contact Dr. Zack Cooper 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.

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This Research Insights breaks down new evidence that patients aren’t shopping for the best price for health care services—even for procedures like MRIs that should be simple to comparison shop.

Events

August 21, 2020
Environmental

This webinar will bring together experts to provide insights on air pollution and environmental injustice during a time of increased inequality.

August 11, 2020
Racism and Health Graphic

This webinar discussed how systemic racism harms health, and how solutions-based approaches at the state and community level are making a difference.

In the News

August 2020
Population Health Spotlight
August Newsletter

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 will be selected in the coming month.

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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.

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