Would providing more information about health care costs and quality improve patients' decisions?

What’s Behind It?

Health care economists have long favored the idea that consumers who are more informed about their choices will make better decisions for their own care, and in so doing will help drive health care suppliers in the market to compete on the basis of cost and quality. Many proponents of market-oriented health reform strategies like to say that consumers today have better information on the quality of their refrigerators and toasters than they do on their doctors and hospitals. The recent push for “consumer-directed health plans” that shift more responsibility for the cost of care to individuals has added further impetus to provide better information for consumers.


The Broader Picture

As noted by the Institute of Medicine, greater transparency in the health care market is fundamental to system reform efforts. However, research shows that simply giving people more information will not necessarily lead to better decision making, and that how information is presented can greatly influence the choices people make.

More information is not always better. People can only process a limited amount of information in making a choice. Giving people more data can actually undermine their decision-making by causing them to disregard or ignore important facts in favor of simple short cuts that lead them to focus on more familiar concepts.

Consumer preferences can shift during decision making. Economic models sometimes assume that people have fixed values and preferences, but research suggests that preferences unfold in the course of the decision making process, especially when choices are complex and unfamiliar. Because health care choices are often very complex, the way in which decisions are framed and information is presented can have a profound impact on choices consumers make. For example, consumers are more likely to use performance data on doctors and hospitals if it is presented in a format (such as ranking or use of familiar symbols) that lends itself to easy evaluation.


The Bottom Line

Transparency and public disclosure of information are necessary for improving system performance, but simply providing consumers with more information on the cost and quality of health care will not necessarily lead to better individual choices or improved health care provider performance. For consumers to make better decisions, they need well-designed support tools that can help them simplify the process and guide them to make choices based on values and preferences that are important to them.

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For More Information 

• Dale Shaller, Consumers in Health Care: The Burden of Choice, 10/05.
• Shaller Consulting and Forester Research, Consumers in Health Care: Creating Decision-Support Tools That Work, 6/06.
• Institute of Medicine, Crossing the Quality Chasm: A New Health System for the 21st Century, 2001.