- Healthcare policymakers are hearing from industry leaders about how they can support better care quality and price transparency tools aimed at helping patients make informed decisions about their care.
At a hearing of the Senate Committee on Health, Education, Labor, and Pensions (HELP), industry leaders and policymakers alike agreed that price transparency is essential in this more consumer-centric medical landscape.
“As any American, even the Secretary of the Department of Health and Human Services, knows, it can be very difficult to find out how much a simple health care test will cost, before a doctor’s visit,” HELP Committee chairman Lamar Alexander said in his opening remarks.
Alexander relayed a story about HHS Secretary Alex Azar, who recently went through pains to figure out how much an echo cardio test would cost him. At one facility, he learned, the test could cost him up to $3,500. At another, it would cost $550.
This is valuable information for any patient, Alexander stated, but without adequate price transparency tools it’s impossible for patients to compare services.
“The Internet has made it easier for consumers to know more about what they want to purchase before they actually buy it,” Alexander said. “You can easily read an online review and compare prices for everything from a coffee maker to a new car. This is true for everything else but not for health care – the cost of health care has remained in a black box.”
This “black box” hasn’t always been such a big problem, Alexander said. It has not been not until recently that patients demanded to know the cost of their care because they now have so much financial stake in it.
“For years, patients were more or less okay with not knowing the true cost of their health care because insurance companies, or the government, paid most of the bills,” Alexander recalled. “However, as premiums have increased, more Americans are covered by plans with high deductibles, which means they are often paying lower monthly premiums in exchange for spending more out-of-pocket when they go to the doctor or fill prescriptions.”
Out-of-pocket healthcare costs have become a significant cost concern, industry research has shown. Data from the Commonwealth Fund shows that patient concern about healthcare costs are at an all time high, with 62 percent of patients saying they are not confident they could pay their medical bills should they fall ill.
And while better price transparency might not lower the actual costs of care, it could help patients make more informed decisions about where to receive that care for less money, Alexander said.
With more patients paying their own medical bills, patient interest in price transparency tools is on the rise, he added. And as more patients shop around for their healthcare based on the best available price, costs are sure to go down. Patient price shopping creates market pressure that causes providers to lower their costs.
With the discussion of healthcare price transparency comes questions of care quality transparency, Alexander added.
“The black box also disguises the quality of care,” he explained. “This is important because we often think high cost equals high quality.”
But as more data piles up indicating the contrary, it will be important for patients to have access to data about both costs and care quality. This will allow patients to make fully-informed judgements about their own care
“Improving transparency in health care prices and quality is an area where the private sector and states are largely leading the charge,” Alexander said introducing the hearing’s witnesses including representatives from the Surgery Center of Oklahoma and St. George Surgical center, Healthcare Bluebook, Washington Health Alliance, and The Leapfrog Group.
At St. George, offering price transparency has paid itself back to the organization, reported Ty Tippets, MBA, the CEO and administrator at St. George.
“Since 2013, St. George has offered up-front procedure pricing on its website for more than 220 procedures,” he told the committee members. “We believe that by offering this information, we empower patients with the critical information they need to make the right choices about the care they require. The demand for price transparency is real. Since posting prices online, our patient base has expanded.”
Federal policymakers should look into strategies to promote healthcare price transparency, Alexander stated.
“While the private sector is largely leading the charge on making health care information more easily available, the federal government can also play a role to help patients, and witnesses today can inform Congress about steps we can take,” he explained.
Witnesses echoed those sentiments, stating that federal incentives could make it more feasible for industry stakeholders to promote price transparency.
“We believe that policy can play a positive role to advance transparency within our US healthcare system,” said Bill Kampine, co-founder and senior vice president for Healthcare Bluebook. “Employer data access, provider consolidation, waiver of out-of-pocket costs for HSA eligible plans and access to CMS data are all initiatives the committee should consider for improving the future of healthcare for all Americans.”
The private and public sectors can also do more to ensure care quality transparency, said Leah Binder, president of the Leapfrog Group. With better care quality transparency comes care quality improvement, as data from the Leapfrog Group has shown.
“After Leapfrog began publicly reporting hospital rates of early elective deliveries—deliveries scheduled early without a medical reason—rates began plummeting,” she said in her testimony. “Until the data was transparent, progress lagged—despite efforts by some of the most influential organizations in the country.”
To that end, efforts to improve care quality and price transparency must center on patient safety, involve disclosure of both quality and cost data in tandem, and use of appropriate quality measures, Binder said.
Calls for better price transparency simply make sense, Alexander added, and are essential for supporting patients as healthcare consumers. Care quality and price transparency are essential for healthcare to continue to compare with other consumer markets.
“In an age when you can compare different prices and check a dozen reviews when shopping for a new BBQ grill, Americans should be able to know the cost of their health care,” Alexander concluded.