More on Business Intelligence

No glaring link between healthcare prices, quality of care, new research finds.

Whether consumers had done price comparison, framing of question influenced survey outcome, researchers say.

Jeff Lagasse, Associate Editor

A majority of Americans,  between 58 and 71 percent, don't see price and care as intricately linked, according to findings published in Health Affairs. However, a substantial minority, 21 to 24 percent, believe there is some correlation. Eight to 16 percent said they didn't know.

Authors Kathryn Phillips, David Schliefer and Carolin Hagelskamp cite previous studies finding that higher healthcare prices don't necessarily translate into better care or outcomes. Their research, however, is not meant to assert that those who perceive a link between price and quality are misguided; rather, their nationally representative survey examines the effects of price transparency tools and what impact they have, if any, on a consumer's choices.

They discovered that those who had compared prices were more likely to perceive that price and quality were associated.

They also found that how a question is framed can impact people's responses. Patients, for example, may think more favorably of a surgical procedure with a 90 percent survival rate than one with a 10 percent mortality rate. Although those rates are statistically identical, framing the outcome in terms of mortality stokes people's aversion to loss.

[Also: Price transparency an important factor in cutting healthcare costs, study finds]

Similarly, the authors argue that people are more unhappy about losing $100 than they are happy about winning $100, which, simplistically put, is the underlying basis behind modern behavioral economic theory.

That assertion translated into the study results. Respondents who were asked about high price and high quality were consistently more likely to say that price and quality were not related, compared to those who were asked instead about low price and low quality.

The results mean "that providing price information will not necessarily prompt consumers to choose higher-priced providers instead of lower-priced ones," the authors posit. The findings, they say, "underscore the need to report quality information alongside price information, so that consumers have some basis on which to differentiate between services and providers."

Another perception expressed among respondents was that providers and insurers set prices that don't necessarily reflect the quality or cost of goods and services. Study participants attributed high prices to spending in such areas as new technology and buildings -- which is perceived to be less important than short wait times and physicians who listen to patients' concerns.

[Also: Intermountain VP says insurers need to shoulder some of the responsibility for price transparency]

Since the framing of information matters, the authors suggest that price and quality transparency initiatives need to consider how price and quality information are communicated.

They also call for improving price transparency tools and policies.

"Theories and findings from behavioral economics could be applied more widely to the tools and policies intended to help healthcare consumers make purchasing decisions," they said.

Twitter: @JELagasse

Show All Comments