Question special
Lead Moderator

Demand-side approaches to cost control are increasing, exemplified by the rise of high-deductible health plans (HDHP).

Having patients bear a greater share of their medical costs works as a blunt instrument to reduce costs -- we have evidence dating back to the RAND experiment that when the cost of care is higher, people use less of it. However, we also find that patients aren't strategic in their reduction: they cut back on both necessary and discretionary care.

A more nuanced argument for consumer cost-sharing is that it can introduce traditional market forces, driving down costs by encouraging patients to "shop" for higher quality/lower cost care. To this end, we've seen the introduction of price transparency tools provided alongside HDHPs, to aid patients in shopping based on price. However, evidence suggests that few patients respond to these cues -- indeed, most people don't even open the tool. Similarly, quality rating tools, such as Hospital Compare, don't drive major behavior change.

What do you think about consumer-based approaches to reducing costs? Do we really have a market? What are the barriers or opportunities for patients? What are implications for MDs?