“Does a Higher Price Equate to Better Quality?”
This question resonates across various markets, with healthcare being a prime example. Many assume that the cost of healthcare directly correlates with its quality. However, this assumption doesn’t always hold true.
In the United States, healthcare expenditure surpasses that of any other country, yet corresponding health outcomes, like life expectancy, don’t consistently reflect this elevated spending. For instance, in 2017, healthcare spending per person in the U.S. reached $10,224, a staggering 28% higher than Switzerland, the next highest spender per capita (Peterson-Kaiser, Health System Tracker).
Gerard F. Anderson, a professor of health policy and management at John Hopkins University’s Bloomberg School of Public Health, notes:
“When it comes to healthcare, and really any other market, quality is not solely determined by how much you spend. It’s not that we’re getting more; it’s that we’re paying much more.”
Consider the analogy of purchasing a designer bag, such as Louis Vuitton, which can command prices upwards of $4,000. While the craftsmanship and materials may elevate its perceived quality, it doesn’t inherently surpass a non-designer bag made from similar materials but priced significantly lower.
Moreover, the influence of marketing and branding can inflate costs without commensurate gains in quality. George Halvorson from Kaiser Permanente highlights how prestigious medical institutions can set prices based on their brand appeal.
Similarly, assumptions about higher-priced medical procedures equating to better care often fall short. Discrepancies in cost can be attributed more to facility location than to variations in quality or expertise. For instance, a board-certified surgeon might charge $55,000 for a knee replacement at one hospital and $17,000 at another, with the disparity primarily driven by geographical factors rather than quality differentials.
The misconception that lower-cost healthcare options sacrifice quality persists among many. At SBM, our aim is to empower members to make informed decisions about their healthcare—specifically surgeries—including selecting cost-effective providers without compromising quality.
As John A. Anderson, CMO at SBM, emphasizes,
“It’s about shifting perspectives to recognize the choices individuals have in their healthcare journey. By promoting awareness of pricing and encouraging judicious decision-making, we help members navigate the healthcare landscape more confidently. So, whether you have an upcoming procedure or simply seek to optimize your surgical spending, reach out to us today to explore how you can save without compromising on quality.”