NYHealth Hosts “Are Patients Consumers?: A Conversation with Trudy Lieberman”

The presentation gave NYHealth the chance to introduce our new priority area, Empowering Health Care Consumers, which seeks to ensure that consumers have the resources and support they need to make informed decisions about their health care. This timely and relevant discussion provided an interesting perspective on how (or whether) consumers engage with the health care system in a meaningful way.

Ms. Lieberman, who spent 30 years at Consumer Reports, began the conversation with the question: What is better for consumers of the current health care system, regulation or education?

In her many years covering the U.S. health care system, Ms. Lieberman has found that education and information rarely make a big difference in protecting consumers. Regulation, she stated, is the only way to make meaningful change. She cited the improved health outcomes resulting from child safety caps on medicine bottles as an example of successful regulation of the pharmaceutical industry.

Ms. Lieberman discussed an economic concept introduced by Kenneth Arrow in the 1960s—one she has experienced firsthand in her extensive career. This economic theory states that there is a fundamental difference between a standard marketplace and the health care marketplace. The relationship between the buyer and seller is drastically different in the health care marketplace because the buyer’s bargaining position is different. Ms. Lieberman explained that patients essentially have no bargaining power in the health care space because they usually have no knowledge of what they really need, other than what they’ve been told by their doctor. Additionally, the risks of bargaining with their own health are often too high to give patients any real power. Thus, providers have all the power, causing both an imbalance of information and an imbalance of market power.

Ms. Lieberman has seen less regulation and more information flooding the marketplace through the years. While she believes that regulation is key, she underscores that it is also important to continue efforts to make health care more transparent. Transparency is important because people want it, and because people need to know how costly our system is if we hope to gain support for cost containment. She cited the many calls and e-mails she receives from people frustrated by the lack of transparency in health care organizations.

Ms. Lieberman worries that good consumer information is being thwarted by the health care industry, which she describes through “Trudy’s Law.” Trudy’s Law states that “the usefulness of consumer information is directly proportionate to how loudly the industry screams.” Ms. Lieberman thinks that transparency information, overall, is not affecting the industry enough to move it.

Finally, Ms. Lieberman addressed the question of whether patients really are consumers. It is very tricky, she concluded, but “patients are in the role of needing care and consumers are in the role of buying it.” Are they inextricably linked? The jury is still out.