NCPA - National Center for Policy Analysis


February 13, 2007

A survey released in late November reveals consumers know little about health care costs, but that's information they'll need if consumer-driven health care plans are to succeed at lowering costs and premiums, analysts say.

According to the survey:

  • While many consumers know prices may vary, they do not appreciate how pronounced those differences can be; for example, when told the lowest cost in the nation for a knee replacement is $22,000, 83 percent of the respondents underestimated the highest price ($77,239).
  • In another example, only 1 of 10 respondents correctly guessed the high-price range for a tonsillectomy.
  • Overall, more than 70 percent stated they had little or no idea of how their providers' costs compare to other providers.

Many analysts believe this ignorance stems from the modern health insurance model, in which a third party insulates consumers from cost differences.

The survey illustrates a need for better-educated consumers, especially as costs are increasingly being passed on to patients, said Devon Herrick, a senior fellow at the National Center for Policy Analysis in Dallas.

"The findings confirm the need for patients to be diligent when comparing prices for physician services," Herrick said.  "Consumers already understand prices can vary tremendously from one doctor to the next.  But the reality is far worse.  Actual charges varied four- to six-fold for some procedures."

Source: Alan Abbot, "Consumers Need Education on Health Care Costs: Survey," Health Care News, the Heartland Institute, March 1, 2007.


Browse more articles on Health Issues