The impact of cost transparency on the cost of care delivery: a systematic review

Health care costs in the United States are rising at an alarming rate. Although much of the cost of care is dependent on the decisions of care providers, providers remain largely unaware of those costs. Legislators have passed initiatives aimed at increasing cost transparency, but the impact of cost transparency on the cost of care is uncertain. The purpose of this study was to systematically review trials investigating the impact of cost transparency on the cost of care delivery, identify the factors likely to increase the effectiveness of such interventions, and suggest directions for future research. We searched the Scopus database for relevant studies published up to November 2014. After identifying potentially relevant studies, we performed additional searches for publications citing or cited by the selected studies. This process was repeated until no additional studies were identified. Key characteristics of relevant studies were extracted for analysis. We screened a total of 4,906 articles, 23 of which were included in the final analysis. We identified timing (education prior to the decision vs. feedback following the decision) and medium (electronic vs. nonelectronic) of communication as key factors impacting the effectiveness of the cost transparency intervention. One hundred percent (9 of 9) of "postorder feedback" studies resulted in decreased costs, whereas only 54% (7 of 13) of studies in which cost was communicated prior to the clinical decision ("pre-order education" studies) lowered the cost of care delivery. Eighty-eight percent (14 of iv 16) of nonelectronic studies reduced costs; 29% (2 of 7) of electronic studies reduced costs. Cost transparency can be an effective strategy to reduce utilization of expensive tests or therapies. Intervention strategies that employ nonelectronic media for communication of financial information to providers and that communicate postdecision feedback may be most likely to succeed. The trend in current publications suggests that health care providers may be moving toward the less effective methods of cost transparency, which could hamper cost containment efforts. The strength of these observations is limited by the absence of prospective studies that directly compare the effectiveness of various cost transparency intervention methods. Future studies are needed to verify these findings and to determine the impact of cost transparency in new cost-centric organizations and incentive structures.