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The incredible cost savings that are possible when patients can actually shop around

Maybe they're all smiles because they shopped for a better price on a CT scan. (AP Photo/Richard Drew)

Let's say you're looking to get your car fixed or put down new tile in your kitchen — the first thing you're probably going to do is shop around for a good price. That's not so easy when it comes to health care, where it can be incredibly hard to figure out what you have to pay for a basic procedure.

That's starting to change, though. Price transparency is an increasing focus in the industry, as more and more consumers with private coverage bear more of the costs of care. An important question remains, though. If you make it easy for consumers to compare prices, will they search for a better deal?

The answer seems to be yes, according to new research published in the Journal of the American Medical Association on Tuesday. The analysis comes from Castlight Health, a San Francisco-based company that provides health price transparency information to employers.

Researchers looked specifically at how pricing information influenced consumer behavior for advanced imaging services (like MRIs), CT scans and clinician office visits. Consumers had access to prices through Castlight's transparency platform, so they could see out-of-pocket costs for services based on the design of their health plan and their deductible status — eliminating the guess work of what they might have to pay. The Castlight researchers then compared spending habits of those who did and didn't use the platform.

The information made a big difference, especially for elective services that are also among the most common. The study found from the data, which included 500,000 people across the country covered by employer plans, that those who searched on the transparency platform had lower payments on average for all three services. The biggest dollar savings came from advanced imaging tests, which were on average $124.74 lower (or about 13 percent). Shopping for laboratory tests resulted in an average 14 percent reduction, or about $3.45. Searching for a clinician office visit yielded 1 percent savings, or about $1.18.

One thing the study can't answer is whether patients are making better decisions or just cheaper ones. They're finding lower-cost options, the study finds, but it doesn't tell us how patients are taking into account things like patient satisfaction, years of clinician experience and other provider characteristics. More expensive care doesn't necessarily indicate better care, a common misconception among consumers.

Another important thing the study can't predict is whether price transparency will reduce overall health spending. If people are saving more money on services, they could also end up using more care. That question, which the study wasn't designed to answer, is especially important as transparency efforts gain momentum amid heightened efforts to keep down the growth in health care spending, which is projected to hit $5 trillion in a decade.

Health care economist Uwe Reinhardt, writing in a separate JAMA editorial, says the early results seem to support expectations that transparency in health care can lower spending. But it only works, he cautions, if there's enough provider competition. "It is a point that is sometimes overlooked but is an essential ingredient for patients to benefit from knowing the price and quality of the health care services they purchase," he writes.