May 31, 2012
Public reporting of health care costs is intended to motivate consumers to choose lower cost providers, and motivate providers to lower costs to retain market share. Measures should be chosen based on which pathway policymakers intend to influence.
Published in: Health Affairs, v. 31, no. 4, Apr. 2012, p. 843-851
Posted on RAND.org on April 01, 2012
There is tremendous interest in different approaches to slowing the rise in US per capita health spending. One approach is to publicly report on a provider's costs—also called efficiency, resource use, or value measures—with the hope that consumers will select lower-cost providers and providers will be encouraged to decrease spending. In this paper we explain why we believe that many current cost-profiling efforts are unlikely to have this intended effect. One of the reasons is that many consumers believe that more care is better and that higher-cost providers are higher-quality providers, so giving them information that some providers are lower cost may have the perverse effect of deterring them from accessing these providers. We suggest changes that can be made to content and design of public cost reports to increase the intended consumer and provider response.