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Healthcare Prices & Quality of Care

Healthcare Prices & Quality of Care
Author Information (click to view)

Kathryn A. Phillips, PhD

Founding Director
Center for Translational and Policy Research on Personalized Medicine
Professor of Health Economics & Health Services Research
Department of Clinical Pharmacy
University of California, San Francisco

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Kathryn A. Phillips, PhD (click to view)

Kathryn A. Phillips, PhD

Founding Director
Center for Translational and Policy Research on Personalized Medicine
Professor of Health Economics & Health Services Research
Department of Clinical Pharmacy
University of California, San Francisco

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Recently, the government, insurers, and other companies have made efforts to make price and quality measures of healthcare more transparent, including the development of healthcare pricing information tools for consumers. “It is possible, however, that consumers may avoid lower-priced healthcare services if they perceive lower prices to be associated with lower quality of care,” says Kathryn A. Phillips, PhD. The opposite may also be true; patients may link higher prices with better care and automatically choose more expensive options.

Little is known about how consumers perceive the connection between price and quality. “Determining this link is important to learning about how patients use pricing information and to establish whether or not public educational initiatives are necessary to enhance patient care,” Dr. Phillips says.

 

A National Survey

For a study published in Health Affairs, Dr. Phillips and colleagues analyzed data from a nationally representative survey conducted by Public Agenda in an effort to determine if consumers perceive that price and quality are associated with each other. The analysis also examined whether or not the way questions about pricing were framed affected the responses of consumers.

“Our findings indicated that most Americans did not think that price and quality were associated,” says Dr. Phllips. “However, a significant number of patients were unsure of this possible connection. This finding suggests that it’s important to be careful when conveying pricing information to patients.”

Depending on how questions were asked, the study showed that 21% to 24% of respondents thought there were ties between healthcare costs and quality, and 8% to 16% were unsure. In addition, 40% reported thinking physicians might be providing lower-quality care if they charged less than other doctors for a particular service.

 

Important Implications

The study also showed that consumers who compared prices were more likely than others to perceive that price and quality were associated. “This finding is important because it highlights the need for careful framing of questions,” Dr. Phillips says. “The goal should be to motivate patients to use pricing information appropriately when making treatment decisions.” She adds that physicians should pay attention to how they describe pricing in the context of quality of care to ensure that patients understand what they are being asked.

According to Dr. Phillips, more efforts are needed to better understand how to display price and quality information in a way that helps consumers make informed decisions. “Physicians need to recognize that they play a key role in efforts to promote high-value care,” she says. “We need to develop effective tools and policies on pricing rather than assume that releasing this information will lead patients to use it appropriately.” Future studies should focus on how people act based on the information they receive regarding healthcare costs and quality.

Readings & Resources (click to view)

Phillips KA, Schleifer D, Hagelskamp C. Most Americans do not believe that there is an association between health care prices and quality of care. Health Aff. 2016;35:647-653. Abstract available at: http://content.healthaffairs.org/content/35/4/647.abstract.

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