Most consumers don't connect quality and price

Most Americans don’t believe that the price of healthcare services ties to the quality of the care they receive, according to research published in Health Affairs.

Authors Kathryn Phillips, PhD, professor of health economics and health services research at the University of California, San Francisco, and David Schliefer, PhD, and Carolin Hagelskamp, PhD, both of Public Agenda, New York City, cite previous studies that also found that higher healthcare prices don't necessarily translate into better care or outcomes.

How questions are framed has a significant impact on how people answer, they found. Respondents asked about high price and high quality were consistently more likely to say that price and quality were not related, compared to respondents asked about low price and low quality.

Respondents who reported they had compared prices before getting care were more likely to think that higher prices are related to higher quality medical care, compared to people who had not tried to find price information before getting care (37 percent versus 12 percent). People who had compared prices were also more likely than those who had not sought price information to think that lower prices are related to lower-quality care (39 percent versus 17 percent). The results were similar for the association of price and quality of doctors.

Between 58 and 71 percent of respondents don't see price and care as intricately linked, according to the findings, while eight to 16 percent said they didn't know. A substantial minority of 21 to 24 percent, meanwhile, believes there is some correlation.

“Providing price information will not necessarily prompt consumers to choose higher-priced providers instead of lower-priced ones," the authors wrote. But, the findings, "underscore the need to report quality information alongside price information, so that consumers have some basis on which to differentiate between services and providers."

The authors said their theories and findings from behavioral economics could be applied to the tools and policies intended to help healthcare consumers make purchasing decisions. For example, research shows that people are more sensitive to losses than to gains. For example, people are unhappier about losing $100 than they are happy about winning $100.

They also called for future research in the variation in subgroups. “For example, studies should investigate whether people with different diagnoses hold different views on the association between price and quality and how those views may differ across different medical goods and services, such as primary care, acute care, imaging tests, and pharmaceuticals. Further studies could also test the effects of different framings using a within-subjects survey design, in which all respondents answer all questions about price and quality.”

Phillips et al said price and quality information should be presented in ways that consider the complexity of people’s responses to different framings of information. “Price and quality transparency initiatives should also consider how to address variations in perceptions across demographic and other subgroups of consumers,” they wrote.