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Ginsburg Testifies at House Energy and Commerce Health Panel on Transparency

Consumers Factoring in Cost and Quality when Making Health Care Decisions Remains Elusive Goal

News Release
April 2, 2009

FURTHER INFORMATION, CONTACT:
Alwyn Cassil (202) 264-3484 or acassil@hschange.org

WASHINGTON, DC—Despite well-intentioned efforts in recent years by government, employers, health plans and others to foster health care price and quality transparency, most Americans still choose doctors and hospitals the old-fashioned way—they rely on recommendations from friends and families and physicians, economist Paul Ginsburg, Ph.D., president of the Center for Studying Health System Change (HSC), told Congress today.

"Despite extensive evidence that the quality of U.S. health care is uneven at best and that Americans pay more for health care than citizens in any other industrialized nation with worse results, health care price and quality transparency in the United States has yet to capture a significant consumer following," Ginsburg testified at a hearing of the U.S. House Energy and Commerce health subcommittee on "Making Health Care Work for American Families: Saving Money, Saving Lives."

In his testimony, Ginsburg made three main points:

On the cost front, insured Americans face few incentives to consider price when choosing providers because they typically pay the same out of pocket if they use an in-network provider. On the quality front, few consumers believe that quality differs significantly across providers and that these differences can have serious-even life-or-death-consequences.

Unlike price transparency, where consumer needs vary greatly depending on whether they are insured or not, and if they are insured, how their benefits are structured, theoretically all consumers can benefit from the same information on the quality of care provided by individual physicians, medical groups, hospitals and other providers. To that end, the potential audience for credible, understandable and actionable health care quality information is significant. A critical first step is to raise consumer awareness of the existence and serious implications of provider quality gaps.

Some advocates oversell the potential of greater price and quality transparency, creating the illusion that other steps need not be taken to address the nation's serious problems with health care affordability and quality. Increased transparency is, in most cases, a good thing, but increased transparency alone cannot remedy the underperforming U.S. health care system.

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation's changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by the Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.