U.S. Healthcare Price—Quality Link

U.S. healthcare consumers are undoubtedly confused about the relationship between quality and price when evaluating healthcare services.  A recent study shows the inherent challenges in healthcare reform as the industry attempts to shift towards price transparency and value.  The research, based on over 2,000 adults, demonstrated that while most consumers do not see an association between price and quality, the framing of questions around the subject had a significant impact.

The researchers note that their analysis was based on “two pairs of questions about the association between price and quality.  One pair of questions referred to medical care in general, and the other referred to doctors, whose prices and quality can vary.  One question in each pair asked about high price and high quality, and the other asked about low price and low quality.  Survey respondents were asked one question from each pair.”

In short, a majority of consumers (58-71%) do not think health care cost and quality are associated, 21-24% perceive an association, and 8-16% are unsure.  The study’s authors found that consumers are more likely to say there’s no association between high price and high quality, and are less sure whether an association exists between low price and low quality.  Kathryn Phillips, one of the researchers, notes:

 “We know from other studies that people perceive information differently depending on how it is framed.  For example, they are more likely to buy ground beef that is labeled 75 percent lean versus labeled 25 percent fat.  Similarly, we found people perceive price and quality differently when described as high price/high quality versus low price/low quality.  We need to consider how people actually perceive price and quality information so we can design the right tools and policies.”

Race and ethnicity also plays a role in perception.  Apparently, Hispanics, Blacks, and those under the age of 30 are somewhat more likely than others to believe cost and quality are associated.

As information and data is increasingly being provided to healthcare consumers in an attempt to help them choose healthcare options, and while employers are steadily forcing their employees into high deductible health plans, the implications of this study’s findings are indeed significant.


Contact ABISA, a consultancy specializing in solo and small group practice management.  Visit us at ABISALLC.com.

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