Despite five years of federal price transparency mandates, most Americans still can't answer a simple question: "How much will my MRI cost?" Kelli Frias, Associate Professor of Marketing at American University's Kogod School of Business, explains why healthcare remains the only industry where consumers buy first and discover the price later—and what that means for the future of American healthcare.
When was the last time you walked into a store, bought something, and had no idea what you'd pay until months later? It sounds absurd, yet this describes healthcare purchasing for 160 million Americans with commercial insurance.
Recent research reveals a stunning disconnect: hospitals with brain MRI prices in the 90th percentile charge 7.9 times more than those in the 10th percentile—for the identical procedure. Even within the same hospital, the price you pay can vary by up to 400 percent depending on which insurance plan covers you.
Dr. Frias's research uncovered two fundamental gaps that keep patients trapped in this uncertainty: the absence of any reliable price-quality relationship in healthcare, and our complete lack of understanding about how patients navigate the entire healthcare journey—from symptom recognition through post-treatment recovery.
"We use the birthday cake as our teaching example," Dr. Frias explains. "You know what an expensive birthday cake looks like and what it should taste like. You have some sort of anchoring. You know about how much it's going to cost."
In nearly every other consumer market, we possess intuitive knowledge about price ranges and quality indicators. But healthcare operates by different rules—or perhaps no rules at all.
"In the healthcare space, if you ask a consumer how much an MRI should cost or what quality should look like—what's a bad quality MRI versus a good quality—we really just have no idea," Dr. Frias notes.
This uncertainty doesn't just inconvenience patients. Research from 2023 estimated that full implementation of price transparency regulations could generate $80 billion in annual healthcare savings by 2025. Yet five years after transparency mandates took effect, the Government Accountability Office found that most hospital pricing data remains "insufficiently complete and accurate to be usable."
Traditional healthcare research focuses on single moments: the doctor visit, the procedure, the bill. But Dr. Frias's marketing expertise revealed something hospitals consistently miss.
"We really don't talk about the entire consumer journey," she observes." From a marketing standpoint, we want to understand all of those touchpoints. When you start planning healthcare, when you have a particular set of symptoms—what does it look like in your planning phase versus your during shopping phase versus post consumption?"
Recent analysis of healthcare consumer journeys revealed a fragmented reality: 35 of 53 studied patient journeys included multiple digital touchpoints, with patients constantly switching between devices and channels. Yet healthcare organizations typically silo these touchpoints, outsourcing up to 30 percent to multiple suppliers—creating barriers to seamless care rather than facilitating it.
The implications extend beyond inconvenience. One study found that 40 percent of consumers cite out-of-pocket costs as a major factor in determining where to receive care, yet most struggle to obtain pricing data. The result? Patients either delay necessary care or discover financial obligations only after treatment, when options have vanished.
When price transparency programs actually provide clear information paired with quality indicators, patients respond dramatically. One landmark study of MRI pricing found that when patients received specific price information and could switch to lower-cost providers, average costs dropped $220 per test—an 18.7 percent reduction.
But here's the critical insight Dr. Frias emphasizes: giving people more choices without proper context doesn't help. It potentially harms them.
"Sometimes the idea that we have more choices isn't necessarily better," she cautions. "We should be very careful in asking consumers to become engaged in this space because consumers have very little ability to get the information they would need in the same way that you would for other products."
The successful MRI transparency program didn't just post prices on a website. It proactively contacted patients, provided personalized information over the phone, included quality rankings alongside prices, and made switching providers easy. This comprehensive approach not only saved money for participating patients but triggered provider competition that reduced market-wide price variation by 30 percent.
American University's research points toward a fundamental redesign of how healthcare organizations think about patient engagement. Rather than treating price transparency as a compliance checkbox, leading organizations are embracing what researchers call "journey-centric care"—understanding comprehensive patient experiences as people move across touchpoints to achieve their healthcare goals.
This approach requires three critical shifts:
Dr. Frias's marketing perspective reveals something healthcare often forgets: people don't want to be healthcare shoppers. They want trusted relationships with providers who guide them through difficult decisions.
"There's a unique and different relationship with [healthcare providers] very different than this birthday cake example," she emphasizes. "The medical provider or physician has an expert set of skills and expertise that makes my relationship with them very different."
This creates a paradox: we need price transparency to control costs and enable informed decisions, yet we must preserve the physician-patient relationship that makes healthcare more than a commodity transaction.
The solution isn't to commodify healthcare completely. It's to create systems where pricing clarity and quality information enable patients to make confident decisions without requiring them to become healthcare experts themselves.
Whether you're a healthcare executive, policy maker, or patient, Dr. Frias's research offers clear implications:
For Healthcare Leaders: Stop treating price transparency as regulatory compliance. Start treating it as patient experience design. Map complete patient journeys, identify friction points where pricing uncertainty creates anxiety or delays care, and proactively provide information and support at those moments.
For Policy Makers: Mandate transparency, but don't stop there. Successful price transparency requires quality information, decision support tools, and systematic removal of barriers that prevent patients from choosing high-value care. The infrastructure matters as much as the information.
For Patients: You have more power than you realize. When presented with clear pricing and quality information, patients consistently choose high-value care—and their collective choices force market-wide improvements. Don't accept "we don't know the cost" as an answer. The information exists; demand access to it.
Five years into federal price transparency mandates, we're learning that posting prices isn't enough. Healthcare needs a complete reimagining of how we think about patient decision-making.
Dr. Frias's research reveals that healthcare consumers are willing and able to make informed choices—when given the tools to do so. The $80 billion question is whether healthcare organizations will embrace this reality or continue treating pricing as a secret to be revealed only after care delivery.
The answer will determine not just healthcare costs, but whether we can build a system where Americans confidently receive the care they need without fear of financial devastation.