Transparency — the new moral imperative — has much to recommend it, but it is not a panacea. Giving people information about health care providers, or health plans, may or may not make them better “consumers” — whether the information is about price or quality. Indeed, a lot has been written in recent months about the unanticipated effects of price transparency — not all of it giving aid and comfort to those purchasers who are hoping that providing information will turn their enrollees into frugal, money saving consumers. “It ain’t necessarily so” — and not just because the information is complex and not easily transmitted. We have the price-placebo effect, — I personally like to call it, “The Neiman Marcus effect” — if the price tag is big enough, it has to be better — or, more academically put by behavioral economists, people tend to value stability more than change, and fear loss more than appreciate the potential benefits of change.
The point of these cautionary notes is not to criticize or denigrate transparency.
Both are long overdue in a sector of our economy that has gone for far too long without sufficient scrutiny. As health care is now consuming 16% of our national GDP, scrutiny becomes not just appropriate, but an absolute necessity. But the most likely users of information about the cost and quality of health care may not be its ultimate consumers, but rather, its providers — the doctors and hospitals whose work is being analyzed and reported on, often to the discomfort of those being evaluated. The real benefit of transparency will come from the pressure it puts on providers to do better — to more rigorous self-examination, knowing that external examination is out there, and to even the most prestigious institutions, to remember that the world is watching, and no longer taking it for granted that their quality is as good as it gets, or its prices justified. Transparency may cause some angst, but its ultimate benefits outweigh its psychological costs. So, turn on those lights, and let’s take a closer look at what we’re getting from our health care system.
Dolores L. Mitchell, Executive Director of the Group Insurance Commission of the Commonwealth of Massachusetts, the agency that provides life, health, disability and dental and vision services to over 285,000 State employees, retirees and their dependents.
This program aired on May 5, 2008. The audio for this program is not available.