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Does Healthcare Pricing Matter?

Elyas Bakhtiari, for HealthLeaders Media, August 23, 2010

Ideally, patients would consider both quality and cost to choose the provider with the most overall value, but healthcare doesn't work like most markets. I suspect there are quite a few patients that associate higher prices with higher quality, so unless they have clear information about both, they are going to be suspicious of lower-priced care.

The growth in hospital price sensitivity in the PRC survey is tied in part to the economy. The group that said it was likely to consider hospital pricing was also more likely to have lost insurance because of a job loss or to have a household member not receiving care due to the economy. In hard times, consumers tend to get more sensitive about prices across the board.

What if the job market improves and the economy recovers fairly quickly? Will the uptick in patient interest in hospital pricing vanish? Unless something is done to control spiraling healthcare costs, I don't think so. Patients will probably continue to pick up a higher share of initial expenses, and the added burden will make them more aware of those costs.

But there's a difference between being price sensitive in theory and in practice. Just because more patients say they would consider a lower-cost hospital doesn't mean they can or do actively compare hospital prices. Despite significant strides toward transparency, healthcare pricing is still incredibly muddled. And I can't imagine it will become easier to figure out when individual procedures become bundled together.

If the recession is any indicator, then the interest in hospital pricing may continue to grow. But patients may also respond by avoiding or postponing care, rather than looking for cheaper options.


Elyas Bakhtiari is a freelance editor for HealthLeaders Media.

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