When looking for a new apartment recently, I narrowed my choices to those that were in my current neighborhood and had a lot of windows. But when it came down to deciding where I should make a move, what really mattered most was cost—and specifically, finding the best apartment at the greatest value.
In making these sorts of significant decisions, it’s hard to think of a situation in which I would settle for anything outside of a good deal. (Why would I pay more for a worse apartment?) Yet the reality is I do it all the time when it comes to my healthcare. Like many people, I go to the doctor not having any idea how much it might cost, and then am surprised by how much I am charged. It turns out I am not alone: 77 percent of Americans have been surprised by how much a doctor, hospital or medical facility charged them.
What do consumers think about cost?
In a time when Americans are taking on more of their healthcare costs, there has been an increased effort from insurers, state governments, employers, and others to make price information more transparent and publicly available. The thought is that when healthcare has a clearer “price tag”, people will be encouraged to compare two or more providers’ prices and consider price in their healthcare decision-making, with the ultimate outcome that people choose less expensive care. However, before we can make this assumption, there are some questions that must be answered: Are people willing to look for price information? Will people actively choose less expensive care? Will looking for information help people save money?
My team and I at Public Agenda recently released research findings that addressed these specific questions and offer insight into how people think about their healthcare costs. There is good news. We found that 70 percent of Americans do not think higher prices are a sign of better quality medical care. And among Americans who, prior to receiving care, tried to compare multiple providers’ prices to find out how much they would have to pay out of pocket, 53 percent said that they ultimately saved money. Additionally, 40 percent of Americans who have never tried to find price information say they would be inclined to choose less expensive doctors if they knew the prices in advance.
Encouraging people to be more active in shopping around for healthcare prices may be a piece in helping to reduce the burden of healthcare costs. However, it is not as simple as just telling people to go find price information. This key caveat is clear in our finding that 63 percent of Americans say there is not enough information about how much medical services cost.
Where do consumers turn for cost information?
Our research found that of the Americans who tried to find price information, 55 percent turned to a friend, relative or colleague; just 46 percent turned to their doctor. What I find interesting is that friends and family are the preferred source for price information, but a majority of people – 77 percent – say they trust or would trust their doctors as a source of information about the price of medical care. Just 58 percent say they trust their friends, relatives, and co-workers.