Shopping for Healthcare Needs to Start Small

Who's going to shop for healthcare in an emergency? How would you even begin to shop for complex procedures like heart surgery? Who's going to look for a discount on cancer treatment? Anything like that is probably going to meet and easily exceed your deductible anyway. And besides, saving a few bucks on treatment is probably the last thing on the minds of people suffering from these maladies—their family members, too.

Those are all valid concerns and I don't have a good rebuttal. But just because people still can't—or are unwilling—to shop for high-end treatment doesn't mean the idea doesn't have merit.  I've heard this argument for years, especially back when the federally endorsed method of reducing healthcare costs revolved around consumers shopping for care using their health savings accounts.

But what if shopping for healthcare focused on the little things we all need to access, such as primary care, prescription drugs, or other, less life-threatening and immediate procedures? That's where a little consumer involvement could actually work to improve quality and bring down costs.

What's changed in the past several years since the Bush administration touted HSAs is that most of us are paying more out of our pockets for our healthcare—a lot more—than we were at that time. Companies, including my own, are instituting high deductibles and high coinsurance requirements for their employees who have insurance. I get it.

But we're largely at the mercy of those who provide the care, and the fact that we're all paying a lot more for healthcare out of our own pockets hasn't translated to lower costs. But that may be changing as a host of companies are seeking to provide the kind of information that makes it easier to save money on routine care.

In some cases, these companies do the shopping for you—you just have to define the parameters, sort of like establishing your preferences and letting eBay do the searching legwork for you. 

Recently, I spoke with Howard McLure, who is former president of CVS/Caremark, about his new gig, which, you guessed it, involves getting consumers to shop for healthcare—sort of.

McLure is transitioning to become chairman and CEO of change:healthcare, a company that uses employers' claims data to help find better deals for employees on the healthcare that they have to pay for out of their own pockets. His isn't the only company that does this, but the idea sounds promising.

It works by comparing de-identified claims data across the client company to help locate better prices for primary care, dentistry, prescription drugs and a variety of other small-dollar healthcare expenses that can add up to big bucks over the course of a year. The larger the company, the better the data, and change:healthcare can even combine two or more companies' claims data as long as they share the same insurance network.

Let's say you pay $85 each time you visit the dentist for a cleaning. Maybe one of your colleagues—probably someone you don't even know—pays $60. McClure's company's database can let you know about the cheaper price if it fits within your chosen set of parameters—distance from you, quality, services offered--and lets you know about the option to save. You don't have to do it, but at least you have the information.

McClure acknowledges the bigger the employee pool, the more likely it is that his company can find more ways to save for beneficiaries. Right now, they're finding ways to save for about half the population for a given company.

"We're seeing very good engagement levels," he says. "About 45% of employees are taking advantage of the information," meaning, they're switching providers to find a cheaper price. He says the company is finding about $350 a year in potential savings for the average beneficiary. That may not sound like much, but if my company hired them to find these kinds of savings for me, you can bet I would take advantage of it. So will a lot of other people.

So while shopping for healthcare has miles to go before it's really effective, baby steps like these are starting to gain traction. It's about time.