Self-Pay Markets in Health Care: Consumer Nirvana or Caveat Emptor?

Feb. 6, 2007
Health Affairs, Web exclusive
Ha T. Tu, Jessica H. May

As consumers face more incentives to make cost-conscious medical care decisions, some policymakers cite self-pay markets as models for consumer shopping. An analysis of the LASIK market revealed limited shopping overall, despite the fact that patients pay the full cost. For other self-pay procedures, consumers shop even less, for reasons ranging from urgency, to costs of obtaining price quotes, to quality concerns that prompt many consumers to rely on word-of-mouth recommendations. Given that consumer shopping is not prevalent in most self-pay markets, the extent of shopping is expected to be even more limited for many services covered by insurance.

This article, funded by the California HealthCare Foundation, is available at the CHCF Web site by clicking here.