How Health Consumers Think About Cost and Quality

Posted by

Nick Vailas

Posted 4/24/12 on Healthcare Transparency Now

Recent focus groups conducted as part of a study funded by a federal agency reported the following:

  • People are loathe to make cost and resource use a consideration in choosing health care providers and treatments, even when they are in high deductible plans
  • People will assume higher cost = higher quality if only given cost data
  • People assume more tests and treatments are better, unless information is framed explicitly in terms of potential harms and risks
  • People are interested, for the most part, on what it costs them to get care
  • There are some measures that people think could be very useful that are“cost” measures that they can see are also “quality “ measures
  • Example: costs/level of “avoidable complications”

Much of the data currently available will not respond to what consumers care about: (1) It doesn’t address their costs, (2) It doesn’t take into considerations variations in insurance design that affect what different individuals pay and (3) It cannot be clearly linked to quality measures.

It has been my experience that lower cost providers tend to be high quality providers.  The explanation for this is that providers that end to do high volume services of a particular kind tend to have greater efficiencies.

The price variability among healthcare providers is extreme and what patients are paying for their services in many cases is not a reflection of what it costs to deliver the services.  Thus pricing is all over the place.  Often time’s people will go and seek services based on a doctor’s recommendation and patients are given the information and share it with their doctor.  This will often influence the doctor as to where patients should receive their services.

There is no doubt that price transparency in services will change purchasing behavior of physicians and patients in seeking alternatives.

Source:  Engaging consumers with a high value healthcare system, by Shoshana Sofaer (2011)

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