PODCAST: both sides of price transparency

Speaking to bluenotes on podcast, Professor Anthony Scott of The University of Melbourne said there was no straightforward solution to the issue. 

"Transparency is good - but will consumers use it?” - Professor Scott

“For example, in petrol markets, there's a [price-comparison] website but not many consumers actually use that website,” he said. “The people who use the website are providers - and therefore they've got better information on the prices of their competitors now.” 

“Prices may rise just because there's more information out there. Typically we've got to think transparency is good, but will consumers use that information? The evidence in many industries is they actually don't use it very much.”

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Professor Scott made the comments after the release of the annual ANZ-Melbourne Institute Health Sector Trends Report, which draws on the latest healthcare sector data to analyse trends and challenges facing the medical specialist industry.

In a range of findings, the report showed median hourly rates for medical specialists are slowing down relative to wage growth in the broader economy but medical specialists are covering an increasing volume of services, including those which are bulk billed.

Specialist prices fell in real terms by 0.15 per cent annually  over the 10 years to the 2016 financial year, the report showed. Despite this, total revenue for the sector grew due to the volume of Medicare services provided by specialists, growing 4.3 per cent annually over that same 10-year period.

The report, authored by Professor Scott, also found the size and funding of the medical specialist sector are both growing faster than population growth and inflation.

Another challenge for the sector, Professor Scott said, was the idea any push to address an oversupply of particular specialists may lead to an increase in ‘low-value care’ or care which provides little benefit at high cost.

Listen to the podcast above to find out more.

Richard Grayson is Head of Health, Business & Private Banking at ANZ

Professor Anthony Scott leads the Health Economics Research Program at The Melbourne Institute of Applied Economic and Social Research at the University of Melbourne