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A Trend: Private Companies Provide Health Care Price Data

January 8th, 2014

There has been a large increase in the number of private and public initiatives aimed at helping patients navigate the minefield of health care pricing, thereby making it more transparent. Price transparency is viewed as critical to achieving “high value” care, and the need has become increasingly urgent as more consumers are enrolled in high deductible and consumer health plans and as more companies are self-insured and thus incentivized to enable their employees to obtain high value care. Price transparency has garnered widespread legislative and media attention, including being a key focus of a recent U.S. Senate Finance Committee hearing and the longest Time magazine article ever published.

Pulling Back the Covers

There are multiple efforts underway to improve price transparency including state and federal government efforts, health plan websites, and consumer-oriented websites. However, private companies have also emerged to provide pricing tools. These companies play a key role, yet have been rarely mentioned or studied in the academic literature. Their importance is illustrated by the fact that one of these companies (Castlight Health) garnered one of the largest venture rounds for a health care IT company on record and has been identified as one of the most likely digital health companies to have an IPO in the near future.

We “pulled back the covers” on five leading private companies providing pricing tools to give an objective view of the services they provide and their role in transparency efforts. These “third-party vendors” work with self-insured employers to aggregate price information from past claims and make it available to employees.

These companies all state that they provide consumers personalized information regarding what they will pay for health care services and in some cases prescriptions. While the mission of these five companies is the same, their methods for estimating prices and presenting information are vastly different from one another. All of the companies provide websites where the consumer may log on and assess what the “price” might be for a health care procedure such as colonoscopy. While all the companies state that they provide personalized information for “what the consumer pays,” there are significant differences in what information is provided, how it is presented, and where the information is obtained. For example, one company may refer to “pricing” of a procedure as “cost” while another company may refer to the price of the same procedure as “doctor’s charge.” Moreover, companies provide different types of price information so that it can be difficult to make comparisons.

Among other differences, the companies differ in what they define as “a service,” leaving many questions open. Is an office visit included? Is a doctor’s charge?  Furthermore, several companies do not include measures of quality along with price, leaving a large gap in the information needed to make truly informed decisions.

Where to Next?

Price transparency companies do fill an important need by increasing access to prices for services. As they compete among themselves, they might develop more refined pricing tools leading to more engaged patients and informed use of services.  The emergence of these companies is a key trend with a potential to alter the health care landscape, but greater transparency and consistency is needed or else there is a risk that customers will become confused and discouraged. There is also a need for greater understanding of these companies and the role they play in the larger health policy picture.

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3 Responses to “A Trend: Private Companies Provide Health Care Price Data”

  1. Kathryn Phillips Says:

    We appreciate the comments and would be glad to provide the full report after it is published. Until then, we can clarify that the companies we examined were Castlight Health, TruvenHealth Analytics , ChangeHealthCare, ClearCostHealth, and Compass Healthcare.

  2. Rob Stamper Says:

    Thank you for providing this information. I would love to see the more extensive data on the private vendors you reviewed and the overall results.

  3. Grady Catterall Says:

    The authors seem to be referring to a longer, more detailed report on this subject. However, I couldn’t find a link, report title, publisher/sponsor, or any other information about that in the post. It doesn’t even include a list of the five companies that were studied; it only mentions one of them (Castlight Health).

    Am I missing something? Could someone tell me where to find more info on this?


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