Cost measures article

Summary: A study of transparency sites was just released by the Agency for Healthcare Research and Quality
U.S. Department of Health and Human Services. figures in the study, “Public Reporting of Cost Measures in Health An Environmental Scan of Current Practice and Assessment of Consumer Centeredness,” prepared by the Johns Hopkins University Evidence-based Practice Center.



The investigators wrote: “One of the intended goals of publicly reporting the cost and quality of health care
providers is to empower consumers to make informed decisions, thus contributing to improved
efficiency of the health care system. While public quality reporting is well documented, less is
known about public reporting of costs and the impact it has on consumers. … We sought to document current practices for public reporting Web sites that include measures of costs of health care providers, and aimed to assess if these practices are consumer

They chose a number of sites and examined them for their value to consumers, and assessed the information provided.

“Data extracted from the final set of 59 Web sites provided insight into the range of
information available to consumers (Appendix C). State health departments or state hospital
associations owned approximately three-quarters of Web sites. Independent organizations such
as Aligning Forces Humboldt, Clear Health Costs, and The Commonwealth Fund owned the
remaining quarter of the Web sites. All 59 Web sites provided cost data on inpatient services. Of
these, 31 provided information on both inpatient and outpatient services, three only provided
daily rates for private or semi-private rooms in nursing homes, and five offered information on
emergency room visits or urgent care needs.”

The conclusion, in part:

“The public reporting of health care cost data is intended to help consumers better understand
the variations that exist in these costs. It may also produce market forces that narrow the range
of prices, stimulate price competition, and lower costs by encouraging cost-conscious shopping.
These possible effects depend on many factors and may work via mechanisms other than
consumer empowerment. …

“One risk, however, is that consumers use these data as a proxy for quality. As indicated by a
number of experimental studies, consumers tend to equate higher costs with higher quality
services or providers, or conversely, that lower costs means poorer quality. These studies
indicate that providing quality information along with cost information encourages consumers to
choose a combination of cost and quality that yields higher value. This field needs more research
that examines how publicly reported cost data (with and without quality data) helps consumers to
choose health care providers.”

The full study is here.

Jeanne Pinder

Jeanne Pinder  is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded...