Out-of-pocket costs make patients less willing to book recommended procedures, study finds

Adults who were told they would owe $787 out of pocket for an endoscopy their doctor recommended rated their chances of scheduling it at 2.87 on a 7-point scale. Adults who read the same scenario but were told the endoscopy would cost them nothing rated it 4.26.

Those results come from one of three online experiments in a study published Oct. 5 in Psychology & Marketing by researchers at Carnegie Mellon University, Texas Tech University, the University of Oregon and American University.

Each experiment gave participants the same procedure, the same billed price and the same insurance coverage. The only thing that changed was the out-of-pocket cost, which was either the full billed amount or $0.

As the cost went up, participants reported more discomfort about paying and more financial anxiety. That anxiety predicted how much physical pain they expected the procedure to cause, according to the study, "Paying for Pain: How Healthcare Costs Influence Physical Pain Predictions."

"When a medical test costs more out of pocket, people mentally brace for a more painful physical experience," Helen Colby, an assistant teaching professor of marketing at Carnegie Mellon's Tepper School of Business and the study's lead author, said in a news release from the university.

Three procedures, one variable

All three experiments recruited U.S. adults through Prolific, an online research platform, and randomly assigned them to the cost or no-cost version of a scenario.

• Blood draw (293 participants; billed price $53). On a 7-point scale, participants facing a $53 out-of-pocket cost rated their expected pain at 2.03. Participants facing no cost rated it at 1.84. The difference fell short of conventional statistical significance.
• Endoscopy (344 participants; billed price $787). This experiment measured only whether participants were likely to call and schedule the procedure within three days, not how much pain they expected. Likelihood of scheduling was 2.87 with the out-of-pocket cost and 4.26 without it.
• Nerve conduction test (391 participants; billed price $1,120). Likelihood of scheduling was 4.19 with the out-of-pocket cost and 5.66 without it. Expected pain was 2.51 with the cost and 2.26 without it, a gap that also fell short of significance when compared directly.

Even where those direct comparisons on pain were small, the authors' mediation analyses found a significant effect running through a chain of emotional responses.

Cost first raised what the researchers call the "pain of paying," the discomfort of parting with money. That raised broader anxiety about what the expense meant for participants' finances, and that anxiety raised expected physical pain.

Once those two responses were accounted for, the cost itself had no separate effect on pain expectations in either the blood draw or nerve conduction experiment.

Money stress amplified the drop in scheduling

The nerve conduction experiment also asked participants how often they felt stressed about money, including whether it kept them up at night.

Cost-driven anxiety reduced willingness to schedule among participants at every level of financial stress. The effect among the most financially stressed participants was about twice as large as among the least stressed.

Two of the authors' citations of earlier research bear directly on physicians. They note that most physicians do not discuss costs with patients and suggest that talking about payment plans and other ways to bring costs down could ease some of the pain of paying.

Their examples include prescribing a generic drug instead of a brand-name drug and explaining the savings, pointing patients to lower-cost testing sites of similar quality, and adding a link to a cost comparison website when ordering blood work that could be done at several clinics.

"Healthcare providers and marketers need to realize that price tags carry heavy emotional weight," Colby said in the release. "Communicating lower-cost options, offering clear payment plans, or framing preventive care as low-cost can lower financial anxiety. By reducing the pain of payment, we can decrease expected physical discomfort and encourage patients to get the medical care they need."

The authors also say hospital price transparency rules may have an unintended side effect. Making high prices more visible could increase financial discomfort and expected pain in markets where patients have no cheaper alternative. In more competitive markets, visible price differences could have the opposite effect.

Hypothetical patients, hypothetical bills

Participants were imagining these procedures. None of them had a real procedure scheduled, and the study measured the pain people expected and what they said they intended to do, not pain they actually felt or appointments they actually made or missed.

The authors write that whether the results hold up in real clinical settings is uncertain. Prior experience with a physician or clinic could weaken the effect, and spending real money under real financial pressure could strengthen it.

The experiments were limited to the U.S. health care system. The authors call for field studies with patients deciding on procedures their own physicians recommended. They also warn that playing down costs to reduce anxiety could backfire by making prices less transparent or setting expectations patients later find don't match their bills.