Sunday, February 8, 2015

(Related update): Just Stop It: You Mean Letting Consumers Make Price Comparisons Can Lower Healthcare Costs?

Related update: I teach my students that competition in the marketplace tends to result in two major benefits to consumers: increases in product quality and decreases in product price.  A recent study on the effects of taxi alternative Uber on drunk driving arrests in Seattle shows the effect of competition on quality defined, in this instance, as safe, reliable rides.  From the executive summary:
In May 2014, Uber set out to answer a simple but important question: what, if any, effect did the availability of safe, reliable rides on the Uber ridesharing platform have on drunk driving in Seattle, where prior to Uber’s arrival in 2013, approximately 7.6 people per day—or 2,750 per year—were arrested for driving under the influence. Using publicly available data and a simple econometric model, we discovered Uber’s entry into the Emerald City was associated with a 10% decrease in DUI arrests. The results were robust and statistically significant, providing meaningful evidence of the power Uber’s network of safe, reliable rides has on drunk driving in major metropolitan cities 
[ht: Carpe Diem]

Original post 10/22/14: The Washington Post (is it just me, or has it moved a bit to the right since Jeff Bezos bought it?) reports on the results of a recent research publication showing that when healthcare consumers are allowed and able to shop -- not the case for the vast majority of us in the country -- they tend to save money on their healthcare consumption.  From the news report:
If you make it easy for consumers to compare prices, will they search for a better deal?The answer seems to be yes, according to new research published in the Journal of the American Medical Association on Tuesday. The analysis comes from Castlight Health, a San Francisco-based company that provides health price transparency information to employers....The study found from the data, which included 500,000 people across the country covered by employer plans, that those who searched on the transparency platform had lower payments on average for all three services.