The absurd price disparities in the American healthcare system stand out as one of its most frustrating features. For example, a brain MRI ranges from $209 to $5,560, and while one place might charge $300 for a blood test, another charges just $75. A mammogram could range in price from $23 to $1,929.
Vitals software helps consumers compare prices of anything from a simple blood test to major surgery. Patients can research cost, availability and quality ratings for various providers, thereby enabling informed decisions.
Vitals isn’t the only company out there attempting to establish a more informed healthcare consumer. But where they set themselves apart is in that people who use Vitals’ SmartShopper system get a cash incentive to comparison shop for healthcare.
A patient whose insurer is a Vitals partner is eligible for a rebate based on the amount saved by selecting a procedure that is cheaper than similar offerings. In the example above, if the patient chose the cheaper outlet for his or her blood test, Vitals will send him or her a check for $25. And in the other examples above for MRIs and mammograms, patients would receive checks for well over $500 just for choosing the less costly provider.
Obviously a system such as this has perils, especially if lower costs accompany less-rigorous medical procedures. But Vitals insists their system does not compromise on quality.
The company claims that in 2014, every $1 SmartShopper paid to patients generated savings of more than $8 for partner health plans. The largest savings were related to colonoscopies, MRIs, and physical therapy. Overall in 2014, Vitals says it saved $10.7 million in procedure costs for its partners, and it paid $1.3 million in cash incentives to 16,076 patients - an average of about $83 each.
One drawback? Price shopping for healthcare isn’t nearly as rewarding as searching for cheap flights or hotels, but the thrill of the hunt to most bargain seekers should be enough to help fuel their growth – and that’s what consumer driven healthcare is all about.
Vitals doesn’t advertise, depending instead on user evangelism for growth. And while healthcare providers aren’t crazy about this level of price transparency, patients seem to love it, and insurance companies love it. And in the long run this is the kind of thing that could help keep down the cost of healthcare.