Executive Summary

There is a growing movement toward more transparency of healthcare costs and new online pricing tools available to patients. However, significant obstacles remain, making it difficult for physicians to meet their ethical obligations to inform patients.

• Out-of-pocket costs can adversely affect the patient’s well-being.

• Physicians are often unaware of the cost of care.

• Patients are unable to make informed decisions if they’re unaware of the cost.


"Don’t worry about the cost. All that matters is getting you well.” Well-meaning physicians frequently say this, but in fact, patients have good reason for wanting to know what care will cost them.

“Providers may say that good care shouldn’t be contingent on cost, but the costs are real for the patient,” says Paul T. Menzel, PhD, professor of philosophy emeritus at Pacific Lutheran University in Tacoma, WA.

Physicians have an ethical obligation to learn what healthcare costs and to communicate this to patients as part of the informed consent process, says Rosie Tong, PhD, emeritus professor of philosophy at University of North Carolina, Charlotte, and former director of its Center for Professional and Applied Ethics. “I value my health, but I do not value it at all and any costs,” she says. “I think a reasonable person can make a good choice about foregoing medical treatment deemed ‘necessary.’”

New online medical pricing tools are becoming available, but these are of limited value to patients. “The question patients are asking is not how much the drug costs, but how much the drug will cost them,” says Laura Tenner, MD, assistant professor in the Cancer Therapy and Research Center at UT Health Science Center San Antonio. Given the complexity of the healthcare system, the average patient would have difficulty determining from an online tool what he or she will truly end up paying for a given treatment or procedure.

“As our populate ages, more and more people are going to see their dollars flying out the door for healthcare,” says Tong.

Providers unaware of costs

Providers typically don’t inform patients of out-of-pocket costs in advance. “Hospitals aren’t used to doing that. Doctors don’t even know what their patients are being billed for a given surgery,” says Menzel.

Some ethicists argue that providing estimates to patients simply isn’t enough. “For any free market exchange system to work, the consumer has to know the price of the product in order to make an informed decision,” says Tenner. “Working with estimates still puts patients at risk for significant financial toxicities.”

Previously, neither insured patients nor their providers had much reason to take costs into account. The increase in high-deductible plans has changed that. “I don’t think healthcare providers should wait for people to ask what it will cost. It should just be part of the information that’s given to people,” Menzel says.

Receiving exorbitant bills in the mail for healthcare diminishes patients’ trust in the healthcare system and in their physician. “This can strain the patient/physician relationship,” says Tenner.

Any business that didn’t inform its customers of what a service will cost them, in any area other than healthcare, “would be censured by our society,” says Menzel. “This is just basic morals and common sense. But it is a wrenching change for the culture of our provider institutions.”

Here are some ethical principles that come into play with price transparency:


“The cost of care can have profound effects on the patient’s financial stability, and therefore, well-being,” says Tenner. “Potential harms include loss of savings, loss of property, and bankruptcy.” A growing pool of data shows patients are incurring significant financial burden due to out-of-pocket expenses of costly prescription drugs.1,2,3

Tenner argues that physicians have an ethical obligation to include cost as part of the shared decision-making process. Unfortunately, physicians are often unaware of their patients’ exact out-of-pocket costs.

“However, physicians do have an obligation to work with their patients and connect them to resources that can help patients navigate through the healthcare system,” says Tenner. This allows the physician and patient to make informed decisions together.

A range of costs for a given procedure isn’t helpful to an individual patient; he or she needs an exact dollar amount. “So much depends on the ‘deals’ a healthcare provider has made with insurers,” says Tong, noting that costs vary widely by geographical location. “The market tolerates high prices in one area of the country but not another.”

Understandably, physicians don’t want to misinform their patients about the cost of care. “Of course, this brings up the issue of whether physicians should make it their responsibility to know the costs,” says Tong. “Should medical schools require students to take a course labelled something like ‘Health Care Ethics and Economics’?”

Autonomy and informed decision-making.

“Some patients are spending their life savings or the funds for their child’s college education on prescription drugs,” Tenner notes. Patients are unable to decide whether the price of taking the drug outweighs the benefits if they are unaware of the medication’s cost.


Without price transparency, consumers cannot make informed decisions. This diminishes competition and allows prices to climb. “As costs become too high, the divide between those who can afford the medication and those who cannot becomes wider,” says Tenner. “This causes increasing healthcare disparities.”

A culture change is needed in healthcare, argues Menzel, in which comparative effectiveness and even cost-effectiveness are taken into consideration by providers. “This should not be considered unethical, but should instead be considered vigorously ethical,” he says.

Where there is good evidence that a less expensive treatment is as effective as a more expensive one, insurers may refuse to pay for the more costly treatment. “But it isn’t just insurance companies that should be making the first step here. This is a medical expertise matter,” Menzel says.

To ensure sustainability of the healthcare system, providers need to know if a cheaper treatment is just as effective as more expensive alternatives. If so, says Menzel, “it’s immoral to prescribe the more expensive treatment — unless the provider justifiably believes the patient is more likely to benefit from it. You have to allow room for that.”


  1. Kaiser Family Foundation, “Medical debt among people with health insurance,” January 2014, at http://kff.org/report-section/medical-debt-among-people-with-health-insurance-incidence-of-medical-debt.
  2. Ramsey S, Blough D, Kirchhoff A, et al. Washington State cancer patients found to be at greater risk for bankruptcy than people without a cancer diagnosis. Health Affairs 2013; 32(6):1143-1152.
  3. Zafar SY, Peppercorn JM, Schrag D, et al. The financial toxicity of cancer treatment: A pilot study assessing out-of-pocket expenses and the insured cancer patient’s experience. The Oncologist 2013; 18(4):381-390.


• Paul T. Menzel, PhD, Professor of Philosophy Emeritus, Pacific Lutheran University, Tacoma, WA. Email: menzelpt@plu.edu.

• Laura Tenner, MD, Assistant Professor, Cancer Therapy and Research Center, UT Health Science Center San Antonio. Phone: (210) 450-1854. Email: TennerL@uthscsa.edu.

• Rosie Tong, PhD, Emeritus Professor of Philosophy, University of North Carolina, Charlotte. Phone: (704) 687-2850. Email: rotong@uncc.edu.