From The Archives: Prices And Consumer Shopping

By Rachel Dolan
Health Affairs Blog, July 19, 2017

The American Health Care Act and the proposed Better Care Reconciliation Act would both result in higher premiums and deductibles for many individuals in the private nongroup market according to the Congressional Budget Office. While the path forward for health reform is now somewhat unclear, the trend of higher consumer cost sharing will likely continue. Higher deductibles and cost sharing are often touted as ways for individuals to have “skin in the game” in health care costs and to help consumers be better shoppers. But what does the research say about the ability to truly shop for health care services? Is it possible? Does it save money? And do consumers even want to do it? Here’s what we know based on research published in the pages of Health Affairs.

Health Care Prices Vary A Lot – And Not Because Of Quality

Shopping For Health Care Has Serious Limitations

Consumers Don’t Really Use Price Tools

The trend of increased consumer cost sharing along with increased expectations that those consumers should engage in price shopping is not going away. But it’s naïve to believe that just increasing the cost burden on consumers and providing them with online tools to compare doctors is going to fix the serious cost problem we have in the US health care system.…

The politicians would have us believe that the health care battle is between those who would protect the policies of the Affordable Care Act and those who would replace Obamacare with a system that places a greater duty on the health care consumer to be a responsible purchaser. In fact, supporters of both approaches tout consumer price sensitivity.

The Affordable Care Act was designed specifically using lower actuarial value plans which require greater cost sharing, especially higher deductibles, supposedly driving the patient to be a more prudent health care shopper. The replacement proposals would merely magnify that – increasing cost sharing in order to reduce insurance premiums. In fact, the supporters of replacement would go so far as to require 100 percent cost sharing for the 22 million who would become uninsured – the nadir (zenith to some) of consumer-directed health care.

This article by Rachel Dolan, the Special Assistant to the Editor-in-Chief at Health Affairs, summarizes some of the studies from the Health Affairs archives, while providing links to those studies, concluding, “it’s naïve to believe that just increasing the cost burden on consumers and providing them with online tools to compare doctors is going to fix the serious cost problem we have in the US health care system.”

The intensity of the obsession with this ideology is demonstrated by the efforts of the Trump administration to introduce cost sharing into Medicaid – a program designed for low-income individuals with no discretionary income. How do they shop with money they do not have at hand?

Americans are not demanding a health care financing system in which they have to look into their own pockets to see what health care they can afford. They want a system that removes financial barriers to care so they can receive the care they actually need. Many Americans were relatively unhappy with the inadequacies of the Affordable Care Act, creating support for repeal and replacement. But when they learned that the proposed replacement would be even worse, they realized more than ever that government programs that have been successful in other nations may be just what we need.

Instead of price shopping it would be much better to have government oversight to make sure that our health care spending is fair, and to leave to the patient-consumers choices in the selection of their health care professionals and institutions, just as we now have with our traditional Medicare program. Tell the politicians to forget consumer price shopping; it doesn’t belong in health care. We can do far better with an equitable, publicly financed program.

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