Information Asymmetry in Healthcare: A Comprehensive Systematic Review of Evidence and Implications

Abstract

Background: Information asymmetry—the unequal distribution of relevant information between stakeholders in healthcare transactions resulting into a foundational market failure that affects utilization, spending, quality, and equity. Information asymmetry is an accepted fact but its scope of impact and area remain fragmented. This empirical study is an effort to identify the same by doing empirical synthesis of previous research work.

Objective: To systematically review empirical and theoretical literature on information asymmetry in healthcare and synthesize evidence concerning its impacts on costs, quality of care, insurance markets, patient autonomy, and safety.

Methods: Following PRISMA 2020 guidelines, we merged two curated datasets (Scopus indexed and PubMed data bases), removed duplicates (initial combined records n = 92), and performed keyword-based screening to identify studies addressing information asymmetry, moral hazard, adverse selection, supplier-induced demand, transparency, and related constructs. Following title/abstract screening and full-text assessment, 27 studies fulfilled the inclusion criteria. Data extraction captured study design, setting, asymmetry type, outcomes examined, and principal findings. A structured narrative synthesis was performed due to heterogeneity in designs and outcomes.

Results: Included studies comprised of different approaches as theoretical models, empirical quantitative analyses, qualitative investigations, and mixed-methods studies spanning from high-, middle-, and low-income settings. Evidence indicates that information asymmetry contributes to supplier-induced demand and resource overuse (Hall et al., 2025; Yue et al., 2025), market distortions in insurance through adverse selection and moral hazard (Hall et al., 2025; Bi et al., 2025), reduced patient autonomy and shared decision-making (Cabanes et al., 2025; Huang et al., 2025), variability and opacity of quality permitting low-quality providers to persist (Shih et al., 2025; Xu et al., 2025), and suboptimal safety and public health outcomes through miscommunication and misinformation (Ma et al., 2025; Madzorera et al., 2025). Interventions reported or suggested to mitigate asymmetry include transparency initiatives, decision aids, provider performance reporting, digital health records, and demand-side health literacy programs; however, empirical evidence on effectiveness is limited and context-dependent (Yue et al., 2025; Huang et al., 2025; Cabanes et al., 2025).

Conclusions: Information asymmetry plays major role in inefficiency, inequity, and diminished safety in healthcare. Multi-pronged policy responses—improving transparency, strengthening regulatory oversight, enabling patient-centered decision-making, and leveraging health information technology—are necessary to address this problem. Future research should prioritize controlled evaluations of mitigation strategies and comparatives across health system types.