Provider responses to online price transparency

Christopher M. Whaley

Journal of Health Economics, 2019, vol. 66, issue C, 241-259

Abstract: Price transparency initiatives have recently emerged as a solution to the lack of health care price information available to consumers. This paper uses the staggered and nationwide diffusion of a leading internet-based price transparency platform to estimate the effects of price transparency on provider prices. I find a 1–4% reduction in provider prices for homogenous services, laboratory tests, but find no price response for differentiated services, office visits. Price responses are driven by active consumer use of price information. This paper demonstrates how reducing consumer search costs can spur limited firm price competition in health care markets.

JEL-codes: D83 I11 L11 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:66:y:2019:i:c:p:241-259

DOI: 10.1016/j.jhealeco.2019.06.001

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