Americans are "hungry" for price information (Part 3)

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Public Agenda is a non-profit organization founded in 1975 by social scientist and author Daniel Yankelovich and former Secretary of State Cyrus Vance. Over the years, Public Agenda established (not without controversy) its reputation as a provider of non-partisan research and insights into a number of critical issues such a public finances, education or healthcare.

This month the foundation released a report focusing on healthcare: costs and the way the american public interacts with cost information that is becoming trend-setting. The research was based on a nationally representative survey of 2,010 U.S. adults (ages 18+), conducted via telephone and online during the summer of 2014, followed by focus groups and selected semi-structured follow-up interviews. We have tried to highlight some of the more interesting aspects from their report.

In this blog we talk about who are those people that actually search for healthcare prices, what motivates them and what are the benefits of doing price comparisons.

Who is actually "looking around" for the best healthcare price?

People making healthcare decisions are more likely to compare healthcare prices

Who are these people that act as free economic agents? 53% of those who have compared prices across providers report being in the process of making healthcare decisions for them or for other adults in their close social network. The other important factor this study highlights is the higher probability of those receiving regular medical treatment to compare prices across multiple providers: 42% of the participants in the study. Finally, hispanics, african-americans, younger people and those with incomes below $100,000 are more likely overall to engage in price comparisons.

Price comparison brings a net benefit...

Price comparison is not even Economics 101; we know (or should) that it is one the main forces that drives competition and a healthy economy. Again, no wonder this survey found that those comparing healthcare related prices across multiple providers believe they have actually saved money.

Surprising to me is that only 62% affirm this; a fact leads one to speculate that either there is not enough of a difference between providers or that people cannot access information. In any case, the vast majority of those that took the effort to compare across multiple providers (82%) will do so again in the future.

...but only if you do compare prices!

Perhaps most surprising is the fact that only a fifth (21% !) actually do try to compare prices. As you can see from this pie chart almost half of us do not bother checking other prices and a further third check just one price. Equally devastating is the finding that insured people who have compared prices are more likely (55%) to be aware of price variation, whereas those that don’t compare prices actually have no idea there are differences in prices in the first place!

No wonder there is relatively little pressure to reduce prices via competition.

Percentage of
  people comparing healthcare prices

More and more the team that is behind CashDoctor is convinced that we need price comparisons. To get price comparisons we need price transparency. While a number of organizations profess such as belief, CashDoctor thinks that the best way to get price transparency is by encouraging people to share information about healthcare prices. If you do incline towards a decentralized model based on sharing there is no better option for you out there than CashDoctor. We can make a change together!

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