Cost and quality guidance would help when consumers are choosing providers

A new study funded by the Agency for Healthcare Research and Quality found that consumers equate cost with quality and worry that lower cost means lower quality care. But higher costs may indicate unnecessary services or inefficiencies, so cost information alone does not help consumers get the best value for their healthcare dollar, according to the study, which appears in the March issue of Health Affairs.

The study, called "An Experiment Shows That a Well-Designed Report on Costs and Quality Can Help Consumers Choose High-Value Health Care," found that when consumers were shown the right mix of cost and quality information, they were better able to choose high-value healthcare providers -- defined as those who deliver high-quality care at a lower cost.

Healthcare consumers want to visit high-quality doctors and hospitals, the researchers said, and many public report cards are available to help them compare providers. However, few report cards include information on cost, and there has been little scientific evidence to guide the presentation of that information to help consumers choose high-value providers.

A team of researchers, led by Judith H. Hibbard at the University of Oregon, studied 1,400 employees in a randomized experiment to find out how they responded to different presentations of quality and cost information. When providers were clearly identified as high-quality, cost had less influence on consumers' decisions and consumers were more likely to choose a provider with lower cost but better quality than a high-cost provider.

“The key is that these report cards have to get better at making it easy to tell which healthcare providers are the best quality providers; otherwise consumers just make a decision based upon cost,” said Hibbard. “When people pay a higher cost for a provider, they believe they are getting the best coverage there is, which isn’t always the case.”

The study explored a number of ways to present cost and quality information effectively, using combinations of symbols such as dollar signs and stars, specific information such as dollar amounts and percentages, and labels such as "appropriate use" or "better."

Consumers were more likely to choose high-value providers when presented with strong, unambiguous quality and cost information. In addition, a check mark indicating a "high-value" provider -- along with the cost and quality information -- also helped consumers make high-value choices. Given strong quality signals, consumers were also more confident in their choices.

The study's findings have implications for the design of public report cards that offer consumers information on the quality and cost of healthcare providers. Although report producers have been adopting strategies to help consumers process and use comparative information on quality and cost, many reporting websites still use overly technical information or present other barriers to easy comprehension, according to the study.

“I hope this study raises awareness of the pitfalls of what is provided on these public report cards and the way people interpret the information,” said Hibbard.