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How Are Consumer Perceptions Around Healthcare Cost and Quality Shifting? One Study Probes

April 6, 2016
by Mark Hagland
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A new study finds consumers rather confused about the connecting between prices and quality in healthcare

What challenges are inherent in the attempted shift towards transparency around value in U.S. healthcare? As it turns out, there are many. For one thing, healthcare consumers in the U.S. are by and large confused about the relationship between price and quality in healthcare services. In an article published in the April issue of Health Affairs and authored by Kathryn A. Phillips, Ph.D., David Schleifer, Ph.D., and Carolin Hagelskamp, the issues are laid out in stark relief.

In their abstract to the article, titled “Most Americans Do Not Believe That There Is An Association Between Health Care Prices And Quality of Care,” the authors note that “Many organizations are developing health care price information tools for consumers. However, consumers may avoid low-price care if they perceive price to be associated with quality. We conducted a nationally representative survey to examine whether consumers perceive that price and quality are associated and whether the way in which questions are framed affects consumers’ responses.”

The abstract goes on to note that “Most Americans (58-71 percent, depending on question framing) did not think that price and quality are associated, but a substantial minority did perceive an association (21-24 percent), or were unsure whether there was one (8-16 percent). Reponses to questions framed in terms of high price and high quality differed from responses to questions framed in terms of low price and low quality. People who had compared prices were more likely than those who had not compared prices to perceive that price and quality were associated. We explore implications of these findings,” the authors write, “including how behavioral economics can inform approaches to helping consumers use price and quality information.”

The authors explain in their article that the survey on which their analysis was based “included 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.”

Making use of sophisticated analytical processes, the authors came up with findings regarding the significant of survey responses. While it is true that most consumers surveyed did not see an association between price and quality, the framing of questions around this subject had a significant impact. Indeed, they write, “The framing of questions (in terms of either high price/high quality or low price/low quality) significantly shifted the distribution of responses across both pairs of questions, which supported our second hypothesis,” the authors write. “Respondents who were asked about high price and high quality were consistently more likely to say that price and quality were not related, compared to respondents who were asked about low price and low quality.” (More detailed information on the study can be found here.)

At a time when more and more data and information are being provided to U.S. healthcare consumers to help them make choices about their healthcare, and also when employers are increasingly pushing their employees into high-deductible health plans, the implications of all this are significant.

How will the leaders of patient care organizations, and in particular healthcare IT leaders, move forward in terms of the preparation of data for healthcare consumer use? HCI Editor-in-Chief Mark Hagland spoke with co-author David Schleifer, Ph.D., about the broader implications of all this. Schleifer is a senior associate at the New York-based Public Agenda, which prepared the study. Public Agenda, as described on its website, is “a nonprofit, nonpartisan organization that helps diverse leaders and citizens navigate divisive, complex issues and work together to find solutions. Through nonpartisan research and public engagement, we provide the insights, tools and support people need to build common ground and arrive at solutions that work for them. In doing so, we are proving that it is possible to make progress on critical issues regardless of our differences.” The organization conducts research in numerous fields, including healthcare, education, energy issues and climate change, and around the federal budget deficit and the national debt. Below are excerpts from the interview with Dr. Schleifer.

There are some potentially very broad implications of your study. Tell me a bit about those?

Our focus was only on healthcare pricing, and not on plan choice. So there’s more crossover, though, there, than we think. So this article we have coming out… The focus is on people’s perceptions of the relationship between price and quality. But it was part of a larger study. So this is an analysis of a few survey questions from a larger study on how people seek and use price information. So, some of what I’m going to say is specifically related to the findings in this study. But some is related to findings in the larger report based on this survey.

David Schleifer, Ph.D.

How would you characterize the understanding of the average American healthcare consumer in terms of thinking about price and quality?