In health care, price transparency alone isn’t enough

It’s hard to argue that more price transparency in healthcare isn’t needed – especially as employers increasingly shift to high-deductible plans and Health Savings Accounts that demand more responsibility from their employees.

But a new study in the Journal of Consumer Research suggests that price transparency alone could lead consumers to risky conclusions about their need for certain medications and procedures. As part of the study, the researchers, Janet Schwartz of Tulane University’s A.B. Freeman School of Business and Adriana Samper of Arizona State University, gave two groups of people two different flu shot prices, $ 25 and $ 125.

They found that consumers associated lower medication prices with a greater communal need and, therefore, a greater sense of personal risk and they associated higher prices with less need and less risk. The potential implication: consumers may forgo more expensive medication and procedures on the false belief that they’re less important.

“Price and risk should be very independent from one another, when you think about consumers making informed health care choices,” Schwartz told Kaiser Health News. “But now we see that they are very dependent on one another, in the same way that price and quality are very dependent on one another, and that can lead to some inconsistencies in health care purchases.”

As consumer advocates, policy experts and a growing group of startups try to open up the black box of health care costs, it’s an interesting study to keep in mind.  And the authors argue that more education about risk and need should accompany price transparency efforts.

Comparison shopping in health care is still in its earliest days, but sites like Castlight Health, ClearCost Health, Clear Health Costs, HealthInReach and PokitDok are trying to give consumers more clarity into health care pricing. Getting the data straight from the providers is tricky (although PokitDok and HealthInReach attempt to do this) but using claims data, many of these sites try to provide consumers with the spectrum of price options for a given procedure or visit.

And some already try to give consumers more context – such as physician ratings, outcome data when available and patient reviews. That information may not necessarily give patients more insight into their risk around a particular kind of medication or procedure, but it’s a start.


GigaOM