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Invited Commentary
September 2016

Consumer-Oriented Approaches to Cost Containment

Author Affiliations
  • 1Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, Los Angeles
  • 2Sol Price School of Public Policy, University of Southern California, Los Angeles
  • 3Center for Health Policy, The Brookings Institution, Washington, DC
JAMA Intern Med. 2016;176(9):1359-1360. doi:10.1001/jamainternmed.2016.3875

The study by Robinson and colleagues1 of Safeway’s experience with reference pricing for laboratory services adds to a valuable, and promising, body of work examining approaches to contain health care costs. By the third year of the program, they found that the average amount spent per laboratory test by Safeway and its employees was 31.9% less than the amount spent by controls, such that the 3-year initiative was associated with $2.57 million less spent on laboratory testing, including $1.05 million less in patient out-of-pocket spending.1

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    1 Comment for this article
    Complete Search Tools Matter
    Paul Burke | Globe1234.info
    Thank you for your interesting commentary.

    Another strength of Safeway's lab cost tool, was that lab tests are a clearly-defined category of very common costs. Many patients can remember this category and therefore search when appropriate. The fallacy of CPR's figure that \"only 2% of total enrollment use these tools\" (http://www.catalyzepaymentreform.org/images/documents/NationalScorecard.pdf), though 98% of plans offer tools, is that most tools cover a limited number of shoppable procedures, which most enrollees don't need, and other enrollees forget about the tools, since they apply so rarely. Logging into and navigating an online system or a rarely-used app for a rare search is
    a barrier that people do not cross easily.

    Even better than Safeway's tool, all Medicare prices are freely accessible, and these help seniors, who are after all the main cost drivers. Medicare has an online inquiry system to display the Medicare cost of each lab test, drug, and procedure at each doctor or other provider. The system also shows the number of times each doctor does each procedure, which is one of the best quality measures.

    Medicare's free system readily compares all providers in a geographic area, and can sort them by cost or level of experience (9 million records at https://data.cms.gov/Public-Use-Files/Medicare-Provider-Utilization-and-Payment-Data-Phy/ee7f-sh97). Patients need to use the inquiry system, and outsiders can help by providing clear public indexes to all the codes for labs, drugs and procedures, so patients can find the codes of interest to them, and thus the cost and doctors' levels of experience.