Impact of improved price transparency on patients' demand of healthcare services

Abstract

Evidence is limited and mixed as to how improved price transparency affects patients' demand for healthcare. Price transparency usually affects both the supply and the demand side of healthcare. However, in Japan—where healthcare providers cannot compete on prices—we can examine an independent impact of price transparency on patients' demand for healthcare.The aim of this study is to investigate the impact of improved price transparency on patients' demand for healthcare. We conducted an experiment by presenting patients with the “price list” of individual healthcare services. We provided the price list for a limited time and compared the healthcare spending and utilization of care between these patients who were provided the price list (patients who visited between the first and third week of January in 2016) versus those who were not (patients who visited during the same period in 2015 or 2017), adjusting for potential confounders. A total of 1053 patients were analyzed (27.5% were provided the price list).We found that improved price transparency was associated with a higher total cost per patient (adjusted difference, +16.1%; 95%CI, +0.6% to +34.0%; p = 0.04). We also found that improved price transparency was associated with higher costs related to laboratory tests and imaging studies, and a larger total number of items of blood tests and urine tests. By conducting an experiment in a real-world setting, we found that improved price transparency paradoxically increased the utilization of healthcare services in Japan. These findings suggest that when prices are relatively low, as is the case in Japan, reduced uncertainty about the prices of healthcare service may make patients comfortable requesting more healthcare services.