NC State Ag Economist Dr. Mike Walden – “Can Price Searching Reduce Health Care Costs?”

 

Mary:  This is Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program asks if price searching reduce health care costs.   Mike, economists believe that consumers benefit from competition in the marketplace.  One requirement for this competition is that consumers search for better prices of products or services they are purchasing.  However, this is often difficult to do in the health care market.   If prices comparisons were possible in health care, would it lower costs?

Mike:  Summary Answer

  1. Interesting question, and one for which we have some new research
  2. Found that if consumers were able to compare prices of health care products and procedures, prices they paid could drop
  3. For average consumer comparing health care prices, average price paid dropped by between 10 and 17%
  4. Study also found that more generous health insurance policies reduced the motivation for consumers to price-compare; makes sense
  5. Still, there are challenges in increasing consumer search
  6. Medical care is complicated; so hard to compare; must coordinate with insurance
  7. I’m MW

Mary: And I’m Mary Walden for the North Carolina Cooperative Extension Service


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