Study Finds Disconnect Between Price and Quality in Health Care

MedicalResearch.com Interview with:
Eric Roberts, PhD

Post-doctoral fellow
Department of Health Care Policy
Harvard Medical School

MedicalResearch.com: What is the background for this study? What are the main findings?

Response: Increasing consolidation of health care providers has raised regulatory concerns that less competition will lead to higher health care prices and possibly lower quality care for patients. On the other hand, some industry observers have contended that larger and higher-priced practices are better able invest in systems to support care management, and ultimately, better patient care. In this study, we examined whether larger and higher-priced physician practices provided better and more efficient care to their patients.

Higher-priced physician groups were paid an average of 36% more by commercial insurers, and were substantially larger than lower-priced practices located within the same geographic areas. Despite large differences in practices’ prices and size, we found few differences in their patients’ quality and efficiency of care. For example, when we compared patients who received care in high-priced versus low-priced practices, we found no differences in patients’ overall care ratings, physician ratings, access to care, physician communication, and use of preventive services. We also found no differences in patients’ hospital admissions or total spending, suggesting that higher-priced practices were not managing their patients’ care more efficiently than their lower-priced counterparts.

We did find that patients in higher-priced practices were more likely to receive recommended vaccinations, review of their medications, and results of medical tests, and that they spent less time in the waiting room for a scheduled doctor’s appointment. However, once practice prices exceeded the average for their geographic area, we observed no further gains in quality on most of these measures.

MedicalResearch.com: What should readers take away from your report?

Response: Our findings show that, despite being paid substantially more for services, higher-priced physician groups generally did not represent a better value to patients or to insurers. From the patient’s perspective, overall experiences with care did not differ in higher- versus lower-priced practices. We also found no evidence that higher-priced practices delivered any savings to insurers by managing patients’ care more efficiently.

MedicalResearch.com: What recommendations do you have for future research as a result of this study?

Response: There has been a growing interest in getting consumers to be smarter shoppers for health care. Many of these initiatives focus on giving consumers better information about provider prices, with the hope that this will encourage patients shop for better value care. Our results suggest that, because higher prices are not systematically associated with higher quality, consumers also need reliable information on provider quality — in addition to prices — to be more effective shoppers for care.

MedicalResearch.com: Is there anything else you would like to add?

Response: In markets for most goods and services, intuition and economic theory suggest that higher prices imply better quality. Our findings reveal a disconnect between price and quality in the health care sector. This disconnect may be driven by several factors, including the fact that patients have generally had weak incentives to “shop” for high-value care, because health insurance generally covers the cost of a doctor’s visit, and because consumers have often lacked relevant and reliable information on quality. As the landscape of quality reporting evolves, and as new value-based purchasing initiatives take root, researchers and policymakers will be continuing to monitor the relationship between health care prices and quality.

Disclosure: Michael McWilliams has served as an expert witness for the Federal Trade Commission.

MedicalResearch.com: Thank you for your contribution to the MedicalResearch.com community.

Citation:

High-Price And Low-Price Physician Practices Do Not Differ Significantly On Care Quality Or Efficiency
Eric T. Roberts, Ateev Mehrotra, and J. Michael McWilliams
Health Aff May 2017 36:5855-864; doi:10.1377/hlthaff.2016.1266

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