In a typical free market, consumer behaviour stays true to core economic principles related to supply and demand; however, in the US healthcare industry, certain economic principles apply, which influence consumers in a unique manner. Given the complexity of healthcare pricing and consumption,
consumers are often ‘left in the dark’ when dealing with the true monetary cost of receiving treatment from a healthcare provider – whether it be for preventive reasons, an illness or injury or the delivery of a newborn child. To add another layer of complexity, there are
also varying levels of price elasticity, depending on the condition, which also influence consumer behaviour. In fact, healthcare in the US is the only industry in which the ‘cost of care’ from the three main stakeholders – payers, providers and patients – is almost
always different. The purpose of this paper is to explain how price and quality transparency affects consumer decision-making in the healthcare setting, to provide a background on various initiatives (state/federal/third party) that have taken place (or will take place) related to transparency,
and ultimately provide recommendations to healthcare leaders on steps that can be taken to succeed in an increasingly transparent environment. By understanding healthcare consumerism and decision-making, healthcare providers can better prepare for value-based care, and understand and align
healthcare charges to the true cost of care with the goal of more closely aligning with key stakeholders (patients and payers).
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Document Type: Research Article
Publication date: March 1, 2016
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Management in Healthcare is the major new professional journal publishing in-depth, peer-reviewed articles and case studies on leadership, administration and management in healthcare. Content will be written by and for healthcare management professionals and researchers with no advertising or sales pitches.
Each quarterly 100-page issue – published in print and online – will feature detailed, practical articles on key business issues which cut through the deluge of information facing healthcare management professionals to showcase the latest thought leadership in how to deliver more with less resources while at the same time improving healthcare quality, along with actionable advice and ‘lessons learned’ from fellow healthcare managers to put that strategy into practice. It will not publish advertising but rather detailed analysis of new thinking and practice at a wide range of healthcare providers worldwide for readers to benchmark their organization against, with every article being peer-reviewed by an expert Editorial Board to ensure that it focuses on the healthcare manager’s perspective, the challenges they face and how they can tackle them.
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