PRICE TRANSPARENCY IN HEALTHCARE

Does Price Affect Quality of Service?

By Sherry Baker @SherryNewsViews
 | 
February 14, 2020

When choosing healthcare, cost can be a factor. Here’s why a higher or lower price for medical care doesn’t necessarily affect the quality of care you receive.

 

“You get for what you pay for” is an old adage that implies if you pay less for an item, it’s likely of poor quality — but if something is expensive, it’s typically worth it. This may be true for some things, but it’s not a good way to look at healthcare quality.

Medical care and prescription medications can be costly for many people, even if you have health insurance or Medicare, because of premiums, co-pays, and sometimes “surprise” bills (called balance billing), if you go out of network.

On the other hand, there may be times when paying more for an expert you want to consult or paying more for your own convenience — for example, going to a medical facility closer to your home or work instead of one many miles away — is best for you.

For most medical tests and procedures, however, it makes sense for both your health and your finances to consider the answer to this question: Does price affect quality of service?

 

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When it comes to drugs and many tests, lower cost doesn’t impact quality

Although you should always consider what’s best for your personal situation and check the formulary provided by your insurance provider for medications (so you’ll opt for drugs totally or partially covered by your policy), most of the time generic drugs are virtually identical to name brand counterparts and do not compromise quality. In addition, generic drugs are carefully regulated by the Food and Drug Administration, helping to assure their quality. Generic drugs are often dramatically cheaper than name brands.

In fact, Niteesh K. Choudhry, MD, PhD, a professor in the Department of Health Policy and Management at the Harvard T.H. Chan School of Public Health, points out that if more generic drugs were prescribed, the cost of medication in the U.S. could drop by almost $6 billion a year.

If your doctor doesn’t prescribe a drug you need in the generic form, ask why, and if a generic doesn’t impact the quality of treatment, it is likely the right, lower priced choice.

When it comes to standard blood tests, imaging, and other routine medical services, the cost can vary widely among medical providers. Paying more for this standard care, however, is not correlated with better quality, according to a report in the AMA Journal of Ethics.

Consider information about cost and quality

If you’re looking for a good plumber or electrician with the lowest price in your area, it’s usually not difficult to find one. You can check for recommendations from friends, make sure the worker is licensed, and get a firm price and a guarantee on work. Obviously, looking for the best healthcare, and not wanting to pay more than you need to, is more complicated than finding other kinds of help.

A growing number of resources online can assist. For example, Fair Health is a nonprofit organization providing neutral information about how to understand healthcare costs and health coverage. You can estimate your healthcare expenses with their online tool.

Fair Health’s “Getting the Right Care at the Right Price” page advises what to consider when choosing a doctor, including these two factors involving both price and quality of care:

  • What are the doctor’s hospital affiliations (where the doctor can provide care or admit you as a patient if needed)? Doctors may be affiliated with only one or several hospitals. So, if you think you will need hospital care, make sure your doctor is affiliated with the hospital you prefer and find out if that hospital is in your healthcare plan’s network.
  • Does the doctor e-prescribe drugs and participate in electronic health records? These are two indicators of “quality metrics,” according to the Centers for Medicare and Medicaid Services (CMS). E-prescribing refers to sending your prescription to the pharmacy over the internet, which can help make sure you get the right medicine; electronic health records keep track of your medical history and tests online and can be shared with other providers quickly, saving time and, potentially, money (avoiding unnecessarily repeated tests, for example).

How to find information about cost and care quality at hospitals near you

When it comes to finding information about both the quality and cost of hospital care near you, Medicare offers detailed online information about value and care — and it’s available and useful to anyone, not only Medicare recipients.

The overall hospital rating summarizes a variety of measures reflecting the quality of care provided by hospitals that treat common conditions ranging from heart attacks to pneumonia. The ratings, which range from one to five stars, with higher stars going to hospitals with higher quality care, are computed using a host of collected data, including effective and timely care, number of complications from surgeries and other treatments and death rate, and the cost.

The ratings delve into the cost and value of care at the hospitals by showing how payments made for patients treated at a particular hospital compare to all hospitals nationally, and the value of care provided by individual hospitals.

Bottom line

Higher price does not equate with quality of care, and it’s important to look at all the factors.

To see the ratings of one or many hospitals near you, just enter your zip code at Medicare’s Hospital Compare online tool.

 

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Updated:  

February 14, 2020

Reviewed By:  

Janet O’Dell