Asymmetric Information

Patients aren’t great price shoppers

That is the finding from a recent Health Affairs article by Desai et al. (2021).

We launched a large online advertising campaign to increase consumers’ awareness about insurer-specific negotiated price information available on New Hampshire’s public price transparency website. Our campaign led to a more than 600 percent increase in visits to the website. However, in our analysis of health plan claims, this increased use of the website did not translate to increased use of lower-price providers. Our findings imply that the limited success to date of price transparency tools in reducing health care spending is driven by structural factors that limit consumers’ ability to use health care price information as opposed to only a lack of awareness about price transparency tools.

Even if patients aren’t great price shoppers, it still may be useful to make prices more transparent. There may be more of a learning curve or there may be some services to which patients are better at price shopping. Still, for those who believe prices should be linked to value, the lack of consumer responsiveness to price information is a bit disheartening.

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