Abstract

http://ssrn.com/abstract=2343367
 


 



The Effects of Price Transparency Regulation on Prices in the Healthcare Industry


Hans Bonde Christensen


University of Chicago - Booth School of Business

Eric Floyd


University of Chicago - Booth School of Business

Mark G. Maffett


University of Chicago - Booth School of Business

August 13, 2014

Chicago Booth Research Paper No. 14-33

Abstract:     
We provide empirical evidence on the causal effects of price transparency regulation (PTR) in the healthcare industry. Using micro data on actual healthcare purchases, and exploiting both between- and within-state variation to address endogeneity concerns, we find that PTR reduces the price charged for common, elective medical procedures by approximately 5% and increases the sensitivity of demand to a 1% change in charge prices by 0.5%. However, the effect of PTR on the actual prices paid by insured patients is limited to the relatively small fraction of patients that have the greatest incentives to directly consider the costs of care.

Number of Pages in PDF File: 59

Keywords: Transparency regulation, Healthcare prices, Search costs

JEL Classification: A10, I11, K32, L15

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Date posted: October 22, 2013 ; Last revised: October 10, 2014

Suggested Citation

Christensen, Hans Bonde and Floyd, Eric and Maffett, Mark G., The Effects of Price Transparency Regulation on Prices in the Healthcare Industry (August 13, 2014). Chicago Booth Research Paper No. 14-33. Available at SSRN: http://ssrn.com/abstract=2343367 or http://dx.doi.org/10.2139/ssrn.2343367

Contact Information

Hans Bonde Christensen
University of Chicago - Booth School of Business ( email )
5807 South Woodlawn Avenue
Chicago, IL 60637
United States

Chicago Booth School of Business Logo

Eric Floyd
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Chicago Booth School of Business Logo

Mark G. Maffett (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Chicago Booth School of Business Logo

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