The Impact of a Novel Price Transparency Platform on Prices of Laboratory Procedures
There is a proliferation of health care price transparency solutions to help inform patient decision making yet the impact of such information is unknown. We estimate the effect of Castlight Health’s web-based price transparency platform on prices paid for laboratory procedures. Castlight Health’s price transparency platform is used by several large employers to enable their employees to make smarter health care choices by providing easy access to personalized information on the prices and quality of health care services and providers.
Data and Study Population
Our population consisted of employees and their dependents in 19 self-insured employers who had access to Castlight Health’s price-transparency platform from 2010-2013. Usage of the platform was optional for each employee/dependent. Search history was saved and searches were linked to claims data. The data contained over 7 million claims for laboratory procedures such as basic metabolic panel (BMP), complete blood count (CBC), and thyroid stimulating hormone (TSH).
Empirical Methods
We used a difference in difference model to evaluate the effect of using Castlight Health’s price transparency platform on prices of common laboratory procedures. We defined two types of individuals based on search history: (1) those who used Castlight Health’s price transparency platform to search for laboratory procedures (users) and (2) those who did not use Castlight Health’s price transparency platform (non-users). First, we compared difference in prices of laboratory services between users and non-user before Castlight Health’s price transparency platform was available. Any price difference would imply pre-existing difference in price shopping behavior of users versus non-users. Next, we compared differences in the price of laboratory services between users and non-users after Castlight Health’s price transparency platform was available. We expected users to pay lower prices especially for services consumed soon after a user searched for its price on Castlight Health’s price transparency platform. We categorized the length of time between the search and the claim as either within 12 months, six months, one month, or one week. We used multivariate linear regression with log-transformed prices and controlled for patient age, gender, median income in patients zip code, specific lab procedure type (CPT code), employer, year, and Metropolitan Statistical Area.
Results
We found that prices of laboratory services were 3.2% higher for users compared to non-users before Castlight Health’s price transparency platform was available (p<0.01). However, prices of laboratory services were 3.5% lower for users compared to non-users after Castlight Health’s price transparency platform was available (p<0.01). We found that the price difference between user and non-user prices increased as the time window between search and use of service narrowed. User prices were 7.2% lower for services consumed within six months of a search (p<0.01); 13.9% lower for services consumed within one month of search (p<0.01); and 18.7% lower for services consumed within one week of search (p<0.01).
Conclusion
These results suggest that Castlight Health’s price transparency platform enables employees to price shop for common laboratory services resulting in savings for both employees and employers.