While Better Health Care Cost and Quality Information Could Aid Consumers, Consumer Empowerment Alone Won't Solve the U.S. Health Care Cost Crisis

News Release
May 10, 2006

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

WASHINGTON, DC—Better consumer information about health care costs, quality and treatment alternatives could help stem rapidly rising health costs, but some are overselling the potential of consumer empowerment to reshape the health care system, economist Paul Ginsburg, Ph.D., president of the Center for Studying Health System Change (HSC), told a congressional committee today.

"Unfortunately, much of the recent policy discussion about price and quality transparency downplays the complexity of decisions about medical care and the dependence of patients on physicians for guidance about what services are appropriate," Ginsburg testified at a hearing of the Joint Economic Committee of the U.S. Congress on the "Next Generation of Health Information Tools for Consumers."

Ginsburg’s testimony is available online at http://hschange.org/CONTENT/845/. HSC is a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.

In his testimony, Ginsburg made three main points:

• Engaging consumers to be more aware of cost and quality issues in health care has the potential to increase the value of health care not only for individual patients but also for the U.S. population as a whole. But some are overselling the magnitude of this potential. And achieving this potential will require investment in collecting and translating meaningful consumer price and quality information and encouraging innovative health benefit structures. And even if this potential is reached, it will not be the hoped-for silver bullet that solves the health care cost crisis in this country.
• For most consumers who are insured, their health plan has long been their most powerful asset in shopping for lower prices, and insurers have the potential to become even more effective agents as they develop more sophisticated benefit structures and information tools to support consumers in choosing effective treatments from higher-quality, lower-cost providers.
• There are practical limitations on the ability and willingness of consumers to become savvy health care shoppers. Markets for self-pay health services, such as LASIK, are often cited as a model for consumer engagement, but HSC research indicates that consumers’ experiences with self-pay markets have been romanticized and do not offer much encouragement as a roadmap for effective health care shopping without either a large role for insurers or regulation.

Ginsburg also stressed that government can play an important role in empowering consumers by fostering the development of useful information about provider quality and investing in research on medical effectiveness.

Medicare’s voluntary program for hospital quality reporting has succeeded in obtaining participation by almost all hospitals and likely will grow in sophistication over time, Ginsburg said, adding that an untapped information resource to assess physician efficiency and quality is the Medicare Part B claims files.

"Most accept the federal role in funding research on medical effectiveness as a classic ’public good’ activity," he said. "The Agency for Healthcare Research and Quality has developed an excellent reputation in carrying out this role, but the funding for these activities has been extremely limited, especially in contrast with what the federal government spends on biomedical research overall."

### ###

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.