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AG says price transparency isn’t helping consumers save on health care costs

Years after Massachusetts health insurers launched websites to help consumers make sense of medical costs, the tools are seldom used and are failing to contain health spending as hoped, according to a new report from Attorney General Maura Healey’s office.Steven Senne/Associated Press

Years after Massachusetts health insurers launched websites to help consumers make sense of medical costs, the tools are seldom used and are failing to contain health spending as hoped, according to a report from Attorney General Maura Healey’s office.

The analysis injects fresh skepticism into the popular theory that giving consumers more information about the cost of medical services will compel them to choose lower-cost health care providers.

The prices of common medical tests and procedures can vary widely from one facility to the next. Healey said it’s essential that these prices be transparent — but transparency is not enough.


“Online pricing tools can empower consumers to make informed decisions, but our report shows that they simply aren’t playing a significant role in controlling health care costs,” Healey said in a statement to the Globe.

“We need to be honest about the limitations of these tools and take this opportunity to develop better mechanisms to reduce health care spending while maintaining high quality.”

Under a 2012 law, health insurers that operate in Massachusetts are required to give consumers price estimates for medical services.

But only about 2 percent to 7 percent of consumers use these Web tools, according to the attorney general’s report. The websites also fail to reflect insurance plans that compensate health care providers based, in part, on the quality of care they provide.

The idea of comparison-shopping for health care has gained traction as a strategy for slashing costs, with many insurers and employers even offering cash rewards to consumers who select less-expensive medical facilities. But studies suggest that these programs have only a modest effect on overall costs.

Even as insurers and employers urge consumers to shop around for their care, doctors and hospitals want to keep patients in their networks and stop them from going to competing providers.


And many patients are uninterested in shopping around; they prefer to stick with their doctor’s recommendations about where to get their tests and procedures.

Amy Rosenthal, executive director of the consumer advocacy group Health Care For All, said in a statement that cost-estimator tools have become more helpful over time.

“On the other hand,” she said, “there are limitations as to how much to expect from these tools in bringing down overall health care costs.

“At the end of the day, consumers do not purchase health care the way they purchase their groceries, and patients tend to follow suggestions from their primary care physician about where to get care.”

Lora M. Pellegrini, president of the Massachusetts Association of Health Plans, also acknowledged that consumers tend to follow their physicians’ recommendations, rather than shop for medical services.

Still, she said in a statement, health insurers “are providing important tools for consumers to access cost information in making informed decisions about their care.”

Health care spending in Massachusetts is concentrated at expensive urban teaching hospitals. The attorney general’s report said that spending at higher-cost hospitals has continued to increase, while it is dropping at the lower-priced hospitals.

Statewide, health care spending increased 3.1 percent in 2018 from the previous year, the state Center for Health Information and Analysis, or CHIA, reported last week. That was in line with a state benchmark; all health care providers and insurers are required to limit spending increases to 3.1 percent per year.


But consumers face a growing burden of copays and deductibles, according to CHIA. Last year, it set up a website to educate consumers about health care costs. But the state site — like the insurers’ price transparency websites — isn’t widely used.

Priyanka Dayal McCluskey can be reached at Follow her on Twitter @priyanka_dayal.