Despite federal price transparency rules requiring hospitals to disclose pricing since 2021, only 21 percent of hospitals are in full compliance—and even fewer provide pricing information consumers can actually use. This persistent opacity reveals a fundamental problem: healthcare remains the only major consumer market where shoppers can't answer a basic question before purchasing: "How much will this cost?"
Dr. Kelli Frias, whose groundbreaking research at American University's Kogod School of Business examines healthcare consumer behavior along the Texas-Mexico border, has identified why traditional marketing frameworks break down in healthcare—and what business leaders can learn from consumers who've mastered navigation of impossibly complex systems.
In virtually every consumer market, price signals quality. Pay more for a luxury car, expect premium features. Choose the expensive restaurant, anticipate exceptional service. But healthcare operates under completely different rules.
"We know what that looks like maybe in consumer goods and in luxury goods," Dr. Frias explains. "There's always this notion of higher price, higher quality. But in healthcare, we really don't have a good sense of what a price is. What's a high price? What's a low price?"
The data proves her point starkly. A brain MRI averages $2,268 nationally, but actual prices range from $400 to $12,000 depending on the facility. Research published in JAMA Network Open found that 36 percent of this variation stems from health system characteristics rather than quality differences. Prostate MRI charges show even more dramatic disparities—up to 26-fold differences between facilities for the identical procedure.
For consumers accustomed to comparison shopping, this creates paralyzing uncertainty. Traditional price-quality heuristics don't just fail in healthcare—they actively mislead consumers who assume higher prices indicate superior care.
Most marketing research focuses on purchase decisions. Healthcare requires understanding something far more complex: how consumers navigate an opaque system where prices are hidden, quality is unmeasurable, and delay isn't optional.
"We really don't talk so much about the entire consumer journey," Dr. Frias notes. "From a marketing standpoint, we want to understand all of those touch points. When you start planning healthcare, when you have a particular set of symptoms—what does it look like in your planning phase versus your shopping phase versus post consumption?"
Recent analysis of patient journeys reveals that 35 of 53 typical care episodes included at least one digital touchpoint, with consumers frequently switching between devices and channels. But here's the critical insight: these transitions happen by necessity, not preference. Patients move between online portals, phone calls, in-person visits, and billing systems because the healthcare system forces fragmentation, not because it delivers value.
The financial consequences are severe. Research shows 42 percent of healthcare consumers believe price transparency has improved since 2021, yet 30 percent struggle to pay healthcare costs and 30 million borrowed money in the past year specifically for medical bills. The disconnect between perceived transparency and actual ability to make informed decisions has created what Dr. Frias calls "illusory agency"—consumers believe they're making informed choices when they're actually navigating in the dark.
Dr. Frias's research reveals three critical lessons applicable far beyond healthcare:
First, transparency without usability is meaningless. Despite federal requirements, the Government Accountability Office found that inconsistent file formats, complex pricing structures, and incomplete data have "impeded price comparisons across hospitals and prevented large-scale, systematic data use." Healthcare providers technically comply with transparency rules while making the data practically unusable.
Business leaders pursuing "transparency" initiatives should ask: Can consumers actually use this information to make better decisions? Or are we simply checking compliance boxes?
Second, consumer sophistication doesn't eliminate systemic barriers. Dr. Frias studied highly strategic healthcare consumers along the Texas-Mexico border who knew prices "to the penny" and had developed remarkable expertise in navigating two healthcare systems simultaneously. Even these expert consumers faced significant challenges because system complexity exceeded individual capability.
Organizations cannot rely on consumer education alone to fix broken systems. If your most sophisticated customers struggle to extract value, your system design needs fundamental rethinking.
Third, the consumer journey extends far beyond the transaction. Research shows that "post-consumption" experiences in healthcare—particularly billing and payment processes—significantly impact patient loyalty and satisfaction. Yet traditional patient experience metrics often miss these critical touchpoints entirely, focusing instead on clinical interactions.
This connects directly to Kogod School of Business's emphasis on sustainable business practices and long-term value creation. Short-term transaction focus sacrifices long-term customer relationships and organizational resilience.
Healthcare's persistent opacity despite transparency mandates suggests the problem isn't lack of data—it's lack of actionable information designed around consumer decision-making needs.
Recent consumer experience research indicates patients value convenience and cost transparency more than technological sophistication. They want straightforward answers to basic questions before care delivery, not complex machine-readable files requiring technical expertise to interpret.
For business leaders across industries, Dr. Frias's research offers a critical framework: Consumer empowerment requires not just information access but system design that enables informed decision-making throughout the entire consumer journey—from initial need recognition through post-purchase experience.
Organizations serious about customer-centricity must evaluate whether their transparency initiatives actually empower consumers or simply create the illusion of informed choice while maintaining systemic complexity that serves organizational interests over customer needs.