Several studies show wide variation in prices for common health care services, even within local areas. For example, a recent report from Massachusetts found that there was at least a threefold difference between the maximum and minimum price for common hospital and professional services such as cesarean or vaginal delivery, MRIs, and office visits, and that for most, including office visits for psychotherapy or eye exams and hospitalizations for appendectomy or heart attacks, the difference was six- or sevenfold. These findings are also echoed in the recent release of Medicare data showing large variation in charges for hospitalizations across communities in the United States. Moreover, prior research has also shown that there is little correlation between price and quality of care for inpatient care and that higher-priced providers control a large share of the market. Not surprisingly, given these facts, most analyst agree that encouraging price shopping for health care represents an important opportunity for reducing health care costs without adversely affecting patient outcomes.
A Better Way to Encourage Price Shopping for Health Care
Doctors can become bargain hunters for their patients.
September 19, 2013
New!
HBR Learning
Customer Focus Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Customer Focus. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Learn how to keep your customers—and their most important needs—front and center.
Learn More & See All Courses
New!
HBR Learning
Customer Focus Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Customer Focus. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Learn how to keep your customers—and their most important needs—front and center.