Exploring the role of prices in health care

Monday, June 13, 2016: 4:45 PM-6:15 PM
G60 (Huntsman Hall)
Scott Barkowski

The proposed session explores how decision makers in health care respond to price information in the market place. The first paper, by Brot-Goldberg et al., studies the response of health insurance members who were transitioned by their employer from a no deductible health plan into a high deductible plan. They find reductions in the consumption of health care by plan members in response to this change, including from those members who were relatively sick and likely to exhaust their deductibles. At the same time, though, they find no evidence of price shopping by the members. The second paper in the session, by Whaley, evaluates the response of providers to the release of price information for their products into the market via the diffusion of an internet-based price transparency platform. He finds that this information leads to price reductions on laboratory tests, but little change in prices for physician services. Additionally, like Brot-Goldberg et al., Whaley finds little evidence of consumers switching to lower price providers (i.e. price shopping). The third paper in the session, by Barkowski, uses a field experiment approach to ask if providing to primary care physicians (PCPs) information on the average costliness of specialists leads to changes in referral patterns between the PCPs to the specialists. He finds that the information results in large increases of referrals to the least expensive of the specialists, and small or negative effects to the more expensive specialist practices.

5:05 PM
5:25 PM
Provider Responses to Online Price Transparency

Author(s): Christopher Whaley

Discussant: Caroline S Carlin