Lower-Cost May Mean Better Health Outcomes

[funologist.org]

Proponents of health care price and quality transparency believe that by providing cost and quality information about physicians and hospitals, individuals will choose those providers with high quality scores and lowest costs. The argument is that providing this information to patients, the demand for high-quality health care at the lowest cost will reinvigorate competition in the health care market, thereby driving down the overall cost of care.

Because higher costs are not always indicative of the best quality, the goal is to showcase the connection between quality scores and price so that patients can more easily make informed decisions about their health care.

This disconnect between lower costs and better care is not unusual. An analysis by Modern Healthcare reported this weekend indicated that in seven of 12 cities examined, the hospital with the lower average cost for inpatient and outpatient percutaneous coronary intervention ("PCI") also had the lower readmission rate for PCI patients.

This analysis emphasizes the importance of providing side-by-side cost and quality data. In order for the U.S. healthcare market to start behaving like other markets, consumers (or patients) must have access to the same kinds of information for their health care insurers and providers as they do for cell phones and cars. Then, hospitals will no longer be able to add a large markup over their actual costs of delivering the services because the value-add simply won't be justifiable.