Does It Pay to Know the Prices in Health Care?
American Economic Journal: Economic Policy 9(1) 154-179, 2017
46 Pages Posted: 29 Jun 2018
Date Written: February 2015
Consumers rarely know the price of medical care before they consume it. I use variation in the timing of access to a new source of price information to show how access to and search for price information leads consumers to pay significantly less for care. I provide suggestive evidence that insurance coverage inhibits the use of price information, rationalizing the relatively low rates of search. The results indicate that availability of price information could have large impacts on prices even in the absence of general equilibrium effects.
JEL Classification: D82, D83, G22, I11, I13
Suggested Citation: Suggested Citation