Skip to main content

Were the Economists Wrong About Health Care?

The Patient Logo


Empowering consumers to shop based on price and quality was supposed to force health organizations to compete on those terms—making health care better and more affordable.

Yet, health spending continues to rise in the U.S. Despite a groundswell of pricing and quality data being unleashed, consumers still aren’t shopping for health care like they do other goods and services. Meanwhile, proponents of consumerism have begun to publicly question its limits—and the dangers of ignoring those limits. Here’s a sampling of recent headlines:

‘I thought people should shop more for health care. Then I actually tried it.’

When Sarah Kliff’s insurance company encouraged her to consider a lower-cost location for the MRI that her doctor had ordered of a stress fracture in her foot, the health policy reporter did so “enthusiastically,” reasoning it would cut the price of the scan in half. But the discount imaging center had no working relationship with Kliff’s orthopedist, causing delays in his receipt of the scan. What’s more, the image was poorer in quality than he liked.

The experience, Kliff writes for Vox, “convinces me I’ve downplayed the trade-offs inherent in shopping for even basic health services.” If she had to do it again, she says, she’d opt for the more expensive scan that her doctor prescribed. “When it comes to health care, I’m selfish—I think most of us are. I want the best shot at fixing my food, even if that means adding a few pennies to my co-workers’ premiums (sorry!).”

‘Yes, people shop for health care. But are they good at it?’

With rising insurance premiums, co-pays and deductibles, the American public is becoming more cost-aware. Yet a recent study showed that instead of shopping for health care, they’re saving money by not going to the doctor, causing some proponents of high-deductible health plans to rethink the strategy.

Jeanne Pinder, founder and CEO of ClearHealthCosts, counters in The Health Care Blog, that consumers just need better information for discerning whether they’re getting quality health care for a reasonable price. Price and quality transparency is “broken,” she argues. “If we want people to shop for health care, we should ask ourselves what kind of tools they need.”

‘Is it worth it? Linking outcomes with costs’

What happens when consumers are given enough information to choose between high-value and low-value health care? That’s a question explored in a study by University of Utah’s Chief of Pediatric Surgery Eric Scaife, M.D. He chose a procedure—pediatric appendectomy—with two surgical approaches that produced the same outcome and gave parents a choice between an “open” operation or the more expensive laparoscopy. When outcomes were the same, parents were almost twice as likely to choose the open procedure, reported Elizabeth Rosenthal of The New York Times.

Yet, as a different University of Utah study illustrates, the calculus is often more complicated, such as for a breast cancer patient deciding whether to undergo chemotherapy.

‘Are good doctors bad for your health?’

Experts disagree on how to measure the quality of care at a given hospital or the skill of a given provider—and a study in JAMA Internal Medicine suggests it’s the procedure, not the proceduralist that patients should be scrutinizing.

Looking at 10 years of data on the outcomes of patients treated for acute, life-threatening heart conditions, the study found mortality rates to be lower at academic medical centers—and, ironically, lowest when the leading cardiologists at those teaching hospitals are all away at a conference.

How can that be? Writing for The New York Times, University of Pennsylvania oncologist Ezekiel J. Emanuel offers some possible explanations, postulating that senior cardiologists treat more aggressively and try more interventions. He underscores the need for patients to ask tougher questions about the outcomes and side effects of the interventions they’re prescribed.

‘How measurement fails doctors and teachers’

Data on cost and quality can motivate health systems to improve and “weed out the rare but disproportionately destructive bad apples,” argues University of California, San Francisco’s Robert M. Wachter, M.D. in the SundayReview of the The New York Times. “But the measurement fad has run out of control.”

They’re getting sharper, but many of the tools for measuring the value of health care (quality divided by cost) have done more harm than good, by incentivizing the wrong things and alienating doctors from their patients, Wachter says. “Our businesslike efforts to measure and improve quality are now blocking the altruism, indeed the love, that motivates people to enter the helping professions. While we’re figuring out how to get better, we need to tread more lightly in assessing the work of the professionals who practice in our most human and sacred fields.”

‘Transparency: Will it help or harm health care?’

Maybe the solution isn’t more data, but providing patients with the right data (meaningful, verifiable and credible). People use consumer reviews to vet everything from plumbers and restaurants to new cars—and increasingly health care. “In one month in 2015, the three doctor review sites, HealthGrades, Vitals and ZocDoc logged more than 10 million unique visitors,” reports Algorithms for Innovation. “The problem with these third-party sites is that their sample size is small (two studies found an average of two and three reviews per doctor), and there’s no way to verify that the reviews are from actual patients and not a family member, competitor or paid promoter.”

Most health systems survey their own patients but haven’t made the data publicly available—until now. In 2012, University of Utah became the first academic medical center in the country to post its patient reviews online, and dozens of other health organizations have followed suit.

By: Kirsten Stewart

Kirsten Stewart is a senior writer for University of Utah Health Sciences