PRESENTING COMPARATIVE COST INFORMATION TO CONSUMERS: EASIER SAID THAN DONE

Background: A key policy approach in United States to curbing the growth health care costs is cost transparency.   To date, there has been limited research on consumers’ comprehension and use of public reports of health care cost and related efficiency measures despite research demonstrating that consumers find comparative quality data challenging. 

Purpose: We examine what type of cost data consumers prefer (out of pocket (OOP) or total costs, per visit or annual), what kind of symbol was effective for cost comparisons (descriptive icons, dollar amounts, or cost ratios), and how to effectively present readmission data, for which a lower score is better.

Method(s): We conducted three randomized online experiments with 448 U.S. employees of a large semiconductor company.  Participants viewed displays of comparative health provider information and were asked to hypothetically select a provider.  The same underlying information was presented; however, there were five different approaches to displaying the information.  In one experiment, for example, participants viewed comparative quality and cost information on four hospitals (high quality/low cost, high quality/expensive, and two mixed quality and cost), and the cost information varied in whether it was presented using descriptive icons (high cost, average, affordable; or high cost, average, low cost), with median costs in dollars, a combination of descriptive icons and median costs, or spending as a ratio compared to state median).

Result(s): Respondents were as interested in knowing their OOP costs per visit as they were in learning about consumer ratings of health providers.  Respondents, however, were significantly less (12%) interested in knowing about cost information when it was described as average annual total cost of care or average annual OOP costs.  When presented with comparative information on hospitals, respondents ranged in selecting the high value hospital 78% of the time, when cost was presented as a ratio, to 95% when a descriptive icon was used and low cost hospitals were labeled “affordable.”  In the readmissions experiment, 82% of respondents selected the highest quality hospital when descriptive icons (better, average, below) detailed readmissions performance rather only 56% when percentages were displayed.

Conclusion(s): This study confirms that consumers are interested in cost information, but presenting the information is tricky.  Displays should be tested with consumers prior to releasing comparative cost information to the public.