AMA RUC to Increase its Transparency

The American Medical Association panel that recommends values for physician services to CMS for Medicare Part B payment purposes, which has been widely criticized for its closed-door process, has initiated some changes in an effort to make them more transparent. The AMA Specialty Society Relative Value Scale Update Committee, commonly known as the RUC, will now publish meeting minutes and how the panel as a whole voted for individual current procedural terminology codes; how individual members voted will not be released. The information will be posted on the AMA website after CMS releases its annual Medicare physician fee schedule. The new Medicare fee schedule typically is released around Nov. 1, but this year, because of the government shutdown, CMS announced it may not be released until Nov. 27.

Increased transparency in how physician services are valued in Medicare could have significant implications for physician payment in Medicaid and the private sector. Most commercial insurance plans set physician payment as a percentage of the Medicare physician fee schedule. Employers should take note of the increased transparency at the federal level, and advocate for similar transparency within commercial insurance plans. This increased transparency, combined with the real possibility of SGR reform in the near future, could have significant downstream impacts on the entire health care delivery system.

HFMA Releases Proposed Guidelines for Patient Financial Interactions

The Healthcare Financial Management Association (HFMA) has announced the release of a draft of new best practices that will bring more consistency, clarity, and transparency to patient financial interactions.

The guidelines were released during ANI: The Healthcare Finance Conference on June 16 in Orlando, Fla. The proposed best practices were created by a steering committee that met monthly over the past year and included leaders from HFMA, the National Patient Advocate Foundation, the American Hospital Association, Harvard Medical School, and America’s Health Insurance Plans, among others.

The proposed best practices focus on financial interactions when medical services are scheduled as well as when emergency and non-emergency care is delivered. These practices provide guidance regarding when and how communication should take place about patient insurance coverage, financial counseling, patient financial responsibility for service, and any existing balance the patient may have. The best practices emphasize open and early communication, the sharing of clear information, and the identification of a path for financial resolution that is fair for patients and health care organizations alike.

The draft of Patient Financial Interaction (PFI) best practices can be viewed online, where comments on the proposed best practices may be submitted through July 31. Patient feedback also will be solicited in the coming months. The resulting final practices will be released in the fall for voluntary adoption by health care organizations across the country.

PBGH Op-Ed on Cost Containment

NBCH member coalition, Pacific Business Group on Health, has published an op-ed in Politico on the subject of the role of employers in cost containment. The piece includes some specific proposals. Recognizing that action on broad Medicare reform is unlikely this year, PBGH is focusing on the specific issues that Congress seems to be interested in: 1) physician payment reform (including SGR replacement), 2) price transparency, and 3) quality measures. Co-authors David Lansky and Sally Welborn call on Congress to tackle the cost issue head-on by making both public and private-sector payment for care dependent on delivering the high-quality care every hardworking American deserves. They call on employers to work with federal payers to align incentives in all sectors of health care, including for both consumers and providers.

Oregon Insurers Rethink 2014 Exchange Premiums as State Posts First-Ever Rate Comparison

The new health insurance marketplace envisioned by federal health reforms doesn't formally kick in until fall. But it already is taking shape – and consumers for the first time can compare, premium by premium, identical plans by different insurers. According to The Oregonian, a comparison of proposed 2014 health premiums became public online this week, causing two insurers to request do-overs to lower their rates even before the state determines whether they're justified. The unusual development was sparked by a comparison that used to be impossible because plan benefits varied so widely. But under the federal reforms in the Affordable Care Act that take effect Jan. 1, health insurance is mandated and every insurer must offer certain standard plans, known as Essential Health Benefits. Oregon's state-based health insurance exchange - Cover Oregon - allows for much easier apples-to-apples comparisons among health insurance plans than exists currently in the individual insurance market.

Consumer-Purchaser Disclosure Project Webinar on Price Transparency

Price transparency is essential to empowering consumers to shop for higher value health care. Yet comprehensive price information is sorely lacking most of the time. Public policy and private initiatives can play critical roles in advancing price transparency. The Consumer-Purchaser Disclosure Project will host a webinar with the Catalyst for Payment Reform and the Health Care Incentives Improvement Institute on this topic. We will share what has been happening in the public and private sectors and discuss opportunities for improving price transparency.

Please join us on April 8th from 1-2:30 pm EDT. To register for the webinar, click here.

New transparency report card; states must step up to help consumers gain access to health care prices

Consumers have information readily available on the quality and prices of restaurants, cars and household appliances, but not for health care options. While we’ve made some progress, shockingly little information still exists about health care prices, even for the most basic services. Several studies have shown that the price for an identical procedure can vary as much as 700% with no difference in quality, and with health care comprising 18% of the U.S. economy and costs rising daily, it’s troubling that most prices are still a mystery.

The Catalyst for Payment Reform (CPR) and the Health Care Incentives Improvement Institute (HCI3) have been pushing health plans and providers to share price information more freely and are seeing progress. But public policy—or even just pending legislation—can provide a powerful motivator as well.

Today CPR and HCI3 have released a new Report Card on State Price Transparency Laws. The report shows that most states are not doing their part to help consumers be informed and empowered to shop for higher value care. The report find that 72 percent of states failed, receiving a “D” or an “F,” and only two receive an “A.”

Will Increased Health Care Price Transparency Actually Improve Care?

A pair of USA Today editorials describe competing arguments on the topic of price transparency. The USA Today Editorial Board argues that providing consumers with price information and encouraging them to use the data by comparison shopping among providers will bring down overall health care system costs. If consumers shop for the best value in health care, the very large variations seen in health care costs will be brought into greater alignment.

An opposing view by Paul Ginsburg, Ph.D., the president of the non-partisan Center for Studying Health System Change, argues that using price transparency to turn consumers into more active purchasers sounds like a good idea, but won't actually bring down overall system costs. Consumers, especially those with employer-sponsored insurance, have no real reason to comparison shop. Modest deductibles and co-payments mean that what the consumer pays does not vary by the provider used. Co-insurance, where patients pay a percentage of the cost, encourages limited price consciousness and only until out-of-pocket maximums are reached.

Because the availability of price information is still very limited, more research is needed to develop relevant measures of value that consumers can use, along with more research on behavioral economics to better understand how to best ensure consumers have a reason to use such information.

Research on Provider Cost Transparency Published

In a new article published in the Journal of the American College of Radiology, researchers sought to determine whether presenting providers with cost information at the point of order entry significantly influenced imaging utilization. Using data from fiscal year 2007, the 10 most frequently ordered imaging tests were identified. Five of these were randomly assigned to the active cost display group and 5 to the control group. During a 6-month baseline period from November 10, 2008, to May 9, 2009, no costs were displayed. During a seasonally matched intervention period from November 10, 2009, to May 9, 2010, costs were displayed only for tests in the active group. At the conclusion of the study, the radiology information system was queried to determine the number of orders executed for all tests during both periods. The main outcome measure was the mean relative utilization change between the control and intervention periods for the active group vs the control group.

Researchers found that there was no significant difference between the active cost display group and the control group, indicating that provider cost transparency alone does not significantly influence inpatient imaging utilization. While this research was conducted entirely within one specialty, there may be significant implications for value-based insurance design, and shared decision-making. If providers acting on their own are not influenced by cost data when making decisions, the role of patients and their families may become even more important.

Why the U.S. health care system is failing us and how to change it

Here are two new books worth checking out...

Catastrophic Care: How American Health Care Killed My Father–and How We Can Fix It
David Goldhill, a member of the board of directors of The Leapfrog Group and president and CEO of GSN, has written a new book looking at our health care system and why it is failing, why expanding coverage will actually make things worse, and how our health care can be transformed into a transparent, affordable, successful system.

The Incentive Cure: The Real Relief for Health Care
Francois de Brantes, executive director of the Health Care Incentives Improvement Institute (HCI3), has just released a new eBook to shed light on one of the toughest issues facing our country, fiscally and socially, asking the critical questions about why patients often don’t get the right care, why America spends twice as much per person as the next biggest spender, and why the rules that apply to every other industry don’t apply to health care? The book also provides answers to many of the questions around why the U.S. health industry fails and highlights some of the most promising ideas for change.

New Catalyst for Payment Reform Resources

The Catalyst for Payment Reform (CPR) has published three new resources on price transparency: a Statement by CPR Purchasers on Price and Quality Transparency in Health Care, a new CPR Action Brief on Price Transparency– An Essential Building Block for a High-Value, Sustainable Health Care System, and CPR’s Comprehensive Specifications for the Evaluation of Transparency Tools. We have linked these three new documents on our NBCH Health Policy webpage. We encourage you to use and distribute these resources to your members and partner organizations.  

California Attorney General Probes Provider Consolidation

The L.A. Times reports that a wave of consolidation among hospitals and physician groups has drawn scrutiny from the California attorney general's office amid concerns that these alliances could boost medical prices. Some hospital chains and insurance companies in the state said they have received civil subpoenas from the attorney general's office seeking information about market concentration among medical providers and the effect on healthcare pricing.

The Affordable Care Act creates strong incentives for medical providers to collaborate more on patient care in hopes that that will reduce costs in a fragmented industry. That has driven much of the acquisition activity across California and nationwide as hospitals and large medical groups merge. Some health care experts, however, worry that this consolidation will raise costs as competition lessens in certain markets. It could also cause setbacks in the small amount of progress gained thus far in achieving greater price/cost transparency.

Newsweek Blog Post: Are Hospitals Less Safe Than We Think?

This blog post by Johns Hopkins surgeon, Marty Makary, M.D., describes the well-know problem of the risks of over-utilization of health care services, argues that no other industry tolerates such a high "failure" rate, and states that a new generation of doctors has been developing fair and simple ways to measure how well patients do at individual hospitals. In hospital-speak, we call the information “sensitive data”—data that would tell you which hospitals have much worse outcomes than others. Dr. Makary advocates for as much transparency as possible in the health care system and cautions against the potential devastating effects of a lack of accountability at the individual provider level.

As he states, "Politicians debate different ways to pay for our broken system. But if we are going to get serious about reducing health-care costs—and improving health-care outcomes—we need to address the 20 percent of medical care that is unnecessary and dangerous. The public should demand disclosure of a hospital’s patient-outcome statistics. After all, we have information on a car’s safety record to inform our decision about which car to buy. But when it comes to choosing medical care, the consumer is left to walk in blind. While we currently have a free market for health care, the competition is at the wrong level. Many patients tell me they choose their medical care based on parking. For an industry that represents one sixth of the U.S. economy, we can do better than that."

Coalitions and employers have a vital advocacy role to play when it comes to data transparency and holding the health care system accountable for outcomes.

Hospital Cuts Costs and Passes Savings on to Self-Pay Patients

Modern Healthcare reports that hospitals' glacier-like movement toward joining the rest of the business world in actually telling customers how much they'll have to pay for their services may have reached a milestone this past April in a small town in southeast Texas.

Cleveland (Texas) Regional Medical Center, which is about 40 miles north of Houston, took the unusual step of announcing in a news release that it had reduced costs for a large number of its services by 15% and was passing those savings along to its self-pay patients. The hospital announced it was cutting prices for the following divisions: cardiopulmonary, dietary, emergency and trauma, intensive care, labor and delivery, medical and surgical, obstetrics, operating room/ post anesthesia and respiratory. Fees associated with medical supplies also were cut.

Despite those changes, 55-bed Cleveland Regional, like most hospitals, is still far from what would be called a price-transparent operation. Cleveland Regional doesn't have a price list it can give to patients or offer that information on its website. But the mere act of acknowledging their prices to the public and sharply reducing them as well are unusual steps.

The idea to cut prices came from the hospital's business staff and was an internally focused collaborative effort. Nonetheless, the change makes Cleveland Regional a part of two broader trends: the move to provide more disclosure about patients' out-of-pocket costs, and efforts to give self-pay, uninsured patients a better deal than they have received historically.

The heightened transparency from providers is coming in part because of the growth of high-deductible health plans in which patients pay most, if not all, of the upfront costs of care until they meet a substantial deductible. That growth is producing increased price sensitivity for certain types of care. For example, imaging is an area where price sensitivity is becoming more prominent, but for acute inpatient care it's still rare.

Hospitals are working hard to cut expenses in anticipation of slower growth in reimbursement, tied in part to the elements of the Patient Protection and Affordable Care Act, but also because of the industry shift toward providing value-based care.
  

New Poll Shows More Americans Are Checking Prices Before Getting Health Care

A recent NPR-Thomson Reuters poll shows that increasing numbers of Americans are looking for price information before the seek medical care. Of the 3,000 households who received a healthcare service in the past 12 months, 16% indicated they had sought pricing information prior to receiving the service. That figure represents an increase from 11% in 2010. Among those who sought out healthcare pricing information, 50% of respondents received it from their physician’s office and 49% received it from their insurance companies. These totals have shifted significantly from 2010, when 60% of respondents received pricing information from their physician’s office and 26% received it from their insurance company. The poll also asked questions about where people turned for pricing information, and found that 45% of respondents who said they found pricing information said they used the Internet, up from 22% who used the Internet in 2010. In addition, the poll asked about the accuracy of the price information sought, and found that 86% of respondents who received pricing information found their initial quote to be accurate, down from 98% in 2010; the rates of accuracy increase with ascending age.

Changes in insurance may be spurring interest in the prices charged for health services. There has been a marked increase in high-deductible insurance plans paired with health savings accounts. That kind of coverage gives people a strong incentive to shop around, but how much pricing information will alter consumers choices more broadly is far from clear because, even assuming perfect price transparency, the demand for most health care services is inelastic. However, that should not deter efforts at achieving price transparency.

New Public Data Resources

Several new health care related websites that we believe will be useful to members, have launched in recent weeks:

The Health Care Cost Institute is a private, independent, nonprofit entity committed to creating the nation’s most comprehensive source of information on health care costs and utilization, and promoting research on the drivers of escalating health care costs and utilization in the U.S. As the first effort of its kind to create and maintain a regularly updated repository of commercial health care cost information, HCCI’s mission is to promote independent research and analysis on the causes of rising US health spending; to provide policy makers, consumers, and researchers with better, more transparent information on what is driving health care costs; and to help ensure that, over time, the nation is able to get greater value from its health spending. The database includes 5,000 hospitals and more than 1 million different medical service providers from commercial health plans operated by Aetna, Humana, Kaiser Permanente and UnitedHealthcare.

HHS' Assistant Secretary for Planning and Evaluation (ASPE) launched the Health System Measurement Project, which brings together trend data on a limited set of key health system measures from multiple data sources to provide a picture of the status of the U.S. health system. The Project focuses on ten critical dimensions of our health care system covering the availability, quality, and cost of care, the overall health of Americans, and the dynamism of the system. The Project examines the evolution of these aspects of our system over time. It also assesses the status of these dimensions of the system with respect to subgroups of the population, with a particular emphasis on vulnerable populations.

In addition, a new website from The George Washington University, Health Information and the Law, is designed to serve as a practical online resource to federal and state laws governing access, use, release, and publication of health information. Constantly updated, the site addresses the current legal and regulatory framework of health information law and changes in the legal and policy landscape impacting health information law and its implementation with commentary and key documents. The site offers descriptions and links to individual federal and state statutes, is searchable on topics such as ‘antitrust,’ ‘confidentiality,’ ‘privacy,’ ‘quality,’ and ‘security of information,’ and provides timely analyses of key health information law issues. It also allows users to see and understand the application of the law in their own geographic areas and how state law intersects with federal requirements and programs.

Health Plans Providing Detailed Cost Estimates of Doctor Visits

A new story in American Medical News reports that health insurers have replaced online tools that showed only rough guesses as to how much a doctor’s visit will cost with new ones that estimate specific dollar amounts for both overall and patient out-of-pocket costs. During the past year, several health plans have released new versions or made significant updates to their cost estimation tools. The newer tools show not just a negotiated price but also the anticipated cost to a patient based on his or her benefit plan, as well as how much of the deductible is met. The projection is accompanied by a disclaimer noting that the insurer can’t guarantee its accuracy, but insurers say their updated tools are far better than the old versions. Health plan executives say they hope the improved tools will mean consumer-directed health care meets its potential, encouraging patients to shop for the best care at the best price.

The article quotes February's NHLC Meeting participant, Castlight Health and reports that on May 1, the 4-year old company received a new round of $100 million in venture capital financing. An important player in the price transparency movement, Castlight Health provides solutions to employers to help use information to drive down health care costs.

Health Care Price Transparency: Can It Promote High-Value Care?

The latest edition of The Commonwealth Fund's Quality Matters is out.

Prices for health care services vary significantly among providers, even for common procedures, and it's often difficult for patients to determine their out-of-pocket costs before receiving care. Some consumer advocates, employers, and health plans are pushing for greater reporting of the prices of health care services as a way to encourage consumers to choose low-cost, high-quality providers and to promote competition based on the value of care. In spite of the challenges, price transparency may be spurred by the growing number of health care consumers who are being required to pay a larger share of their medical bills.

Read the full article here.

Price shopping for health care

As consumers we have the ability to do price and value comparisons for our homes, cars and the majority of good and services we buy. While we still have a long way to go, strides are being made to help Americans do the same for health care.

The Healthcare Blue Book, a free resource for consumers, publishes what it determines to be a "fair price" for various medical services, based on a review of claims data as well as consumer-submitted reports.

Employers and insurance companies can pay for access to a version that lists in-network providers ranked by value. Recently, Healthcare Blue Book launched a subscription service for patient-centered medical homes, so that primary care physicians can work with their patients to make referrals to high-quality, lower-cost providers.

There are also free mobile apps available.