Vitals' SmartShopper paid patients $25 to $500 to choose cheaper medical providers

In an October 2015 NPR Planet Money report, David Kestenbaum visited the Manchester, New Hampshire call center of Vitals, whose SmartShopper service has deals with insurers and employers. A patient calls before an MRI or gallbladder surgery; the staff searches providers within 20 miles of her ZIP code. Even for a blood test one place might charge $300 and another $75. The agent does not tell the caller to pick the cheaper place, but if she does, Vitals sends her a $25 check.

The sums scale with the procedure. A patient on Remicade infusions for rheumatoid arthritis can get $500 a month for switching to a cheaper location, and for the insurer or employer the savings can be over $200,000 a year. A union member described a group of rural women who hired a limo to a distant mammogram site and made a day of it, probably spending as much as the incentives paid.

The loser is the higher-priced provider. William Goodman, chief medical officer at Catholic Medical Center, one of the more expensive places for MRIs in New Hampshire, told NPR he thought the services were a good idea, and said his hospital charges more partly to cover costs such as the emergency room and helipad.

Patients choose the provider but insurers and employers pay, so the chooser has no reason to compare prices.

A small check is far smaller than the saving on a pricey procedure, so everyone but the high-priced provider gains.

The call center does the price search, removing the effort that stops people shopping around.

The agents say it is the patient's choice, which keeps the offer from feeling like pressure.

If one party decides and another pays, give the decider a slice of the savings.

The NPR piece reports the service as running with insurer and employer clients; it gives no total savings or patient numbers. Goodman said that eventually all health-care prices would need fixing for the system to work.