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Can Consumers Differentiate Between Quality Care and Amenities?

August 28, 2011

One of the approaches some corporations are taking to hold down health care costs is to put more responsibility on their employees through high-deductible health insurance plans. It makes sense that they would try this. After all, this reflects the daily life of the business community as they compete for consumers of their goods and services. They make choices based on cost and features, why shouldn’t their employees?

When it comes to readily accessible items such as anti-inflammatory pain relievers, of course the consumer can make rational choices of trade-offs: brand name drug or generic, acetaminophen or ibuprofen. But what about big ticket items in health care?

In an article in the New England Journal of Medicine late last year, the limits of consumer choice in holding down costs was addressed in a commentary. The authors looked at the hospital market, for which $700 billion was spent in 2008 (I would estimate this is over $800 billion now).

The authors pointed out that hospitals actually compete on amenities, not quality of care or bang for the buck. Marketing campaigns tout the room views, hotel-style room service for meals, and other offerings that have nothing to do with a sick patient recovering to the point she can go home.

Consumers respond in surveys that these non-clinical features are more important than clinical reputation in choosing a hospital. Hospital administrators have learned that these added features cost more than quality improvement programs, but the improved amenities have a greater effect on hospital volume – i.e. bucks for the bottom line. And what tiny fraction of patients actually look up quality ratings for potential hospitals (and let’s not get into a discussion here of whether these rankings mean anything real)?

As much as I assume that a nation of people given the freedom and choices to make decisions for themselves leads to the strongest and most stable country, big-ticket healthcare items is an exception. There is just too much complexity in the industry for an individual to shop around. For example, even for the lower cost services, if your family physician thought there was a fair chance your abdominal pain was caused by gallstones, do you really want to then shop around for sonogram facilities to image your belly and labs to analyze your blood? If you find out you have gallstones, do you really want to then compare prices and amenities of all the hospitals and surgi-centers in your area, then interview surgeons and see if they work at the facility you chose? This is just too much for most people to navigate.

People should have choices, but it should be choices of plans or healthcare networks. However, if you want healthcare that is more affordable, one small step would be to forego hospitals with granite counter tops and mints on the pillows.

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