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Pair Consumer Cost, Quality Information Carefully

By Alexandra Wilson Pecci  
   April 22, 2016

How providers' messages about cost and quality are worded can significantly affect how they are interpreted, research shows. "You need to know how to convey price and quality information in a way that [doesn't] cause unintended effects," says a researcher.

When it comes to consumer goods, the perceived link between cost and quality is usually pretty clear.

"You might pay $50,000 for a BMW, as opposed to $20,000 for a Kia," says Kathryn A. Phillips, PhD, Professor of Health Economics and Health Services Research and Founding Director UCSF Center for Translational and Policy Research on Personalized Medicine, Department of Clinical Pharmacy, at the University of California, San Francisco.

But when it comes to healthcare, the link is less clear.

Phillips is lead author of a study in Health Affairs that found that most consumers don't believe there's an association between healthcare cost and quality.

People who had already compared prices, however, were more likely to perceive that price and quality were associated than those who hadn't, the study found. Also, a significant minority do believe there's an association between cost and quality, while others aren't sure.

The study analyzed data from a nationally representative survey of more than 2,000 adults conducted by Public Agenda with funding from the Robert Wood Johnson Foundation. Among the questions asked:

Would you say higher prices are typically a sign of higher quality medical care or not?

  • 71% said NO
  • 21% said YES
  • 8% said DON'T KNOW

Would you say lower prices are typically a sign of lower quality medical care or not?

  • 63% said NO
  • 22% said YES
  • 14% said DON'T KNOW

The wording of the questions influenced the respondents' perceptions, suggesting that an understanding of behavioral economics could help providers shape and strengthen their messaging:

If one doctor charged more than another doctor for the same service, would you think that the more expensive doctor is providing higher quality care, or would you not think that?

  • 67% said NO
  • 23% said YES
  • 9% said DON'T KNOW

If one doctor charged less than another doctor for the same service, would you think that the less expensive doctor is providing lower quality care, or would you not think that?

  • 58% said NO;
  • 24% said YES
  • 16% said DON'T KNOW

"We were surprised that people perceived high price and high quality differently than low price and low quality, although that's what behavioral economics would predict," Phillips says.

She says that the results of this study have several implications, especially for those who are attempting to educate consumers about healthcare pricing.

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Alexandra Wilson Pecci is an editor for HealthLeaders.

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