“How much does health care cost?” It isn’t an easy question to answer. Your yearly check-up, a colonoscopy, or trip to the emergency room doesn’t typically come with an obvious price tag. And it isn’t just finding out the price of a service or product that’s difficult; it’s also difficult to determine the quality of the care provided. In fact, Princeton Economics professor Uwe Reinhardt has likened “shopping” for healthcare to trying to find a purple sweater in a department store while blindfolded.
Greater transparency and access to information about the prices and quality of health care would be beneficial to consumers, providers, policymakers, and stakeholders alike. To achieve the Triple Aim of better population health, an improved health care system, and a lower rate of cost and spending growth, we must take the blindfold off.
We think the following steps are necessary to spur the movement to greater transparency.
1. More Information on Insurance Exchanges: With the growth of high deductible health insurance plans and other forms of cost sharing, consumers are paying more out-of-pocket for medical services. What’s more, narrow health insurance networks may provide patients with fewer choices among providers in exchange for lower premiums. The health insurance marketplaces need to provide more comprehensive information on their web sites to help consumers pick the right health plan, with the appropriate balance between premiums and cost-sharing, the most up-to-date information about which providers are in-network, and, ideally, information about the quality ratings of health plans and the quality of care delivered by network providers.
2. More transparent data on payment: To maximize the availability of data to shed light on the costs of care, all states should set up all-payer claims databases or their equivalent, and make all the data they compile freely available to users. States should also outlaw the “gag” clauses in contracts between providers and insurers that bar either party from disclosing payment arrangements. To be sure, payment data isn’t the same as pricing data, but understanding the big variations in levels of payment that permeate the health care system may help the movement to a more rational payment and pricing structure.
3. Make better use of the data that is already available: Providers, insurers, and others should make even greater use of the data, information, and transparency tools that are already available to understand health costs and improve the quality and efficiency of care. For example, the Agency for Healthcare Research and Quality's (AHRQ) Health Care Cost and Utilization Project is already collecting data on 97% of hospital discharges in the country, as well as data on discharges from ambulatory surgery centers and emergency departments. AHRQ has also developed software that policymakers at the state level can use to create public reporting web sites on quality and costs delivered by providers in the state. These valuable data and tool sets are underutilized.
At the local level, the Centers for Medicare & Medicaid Services (CMS) have released Medicare fee-for-service spending data at the county level on inpatient, Part B, admissions, and emergency department rates. Policymakers and providers can use these data to understand local health care delivery patterns and address health-planning needs. Additionally, CMS will soon release detailed data on Medicare Advantage (MA) that can be used to understand how these plans are delivering care, and whether they in fact deliver care that is higher quality, and more efficiently, than traditional Medicare.
4. Spark Conversations Between Providers and Patients Over Costs, Quality, and Care Appropriateness: Both clinicians and patients often have little information about costs and quality, even as billions of dollars are wasted on unnecessary care. Multiple tools and strategies are available to address these gaps. The American Hospital Association provides a guide to hospitals on how to become more transparent with consumers about costs and prices. Choosing Wisely (www.choosingwisely.org) provides educational tools for providers about the evidence-based recommendations to reduce unnecessary treatment and testing.
To be sure, taking these steps and making full use of these tools won’t be enough to get us where we need to go in achieving a fully transparent health care system. But at least they will constitute very real evidence that we as a nation are committed to taking off the blindfold for good.
Frist, a physician, served in the Senate from 1995 to 2007 and was Majority Leader from 2003 to 2007. Daschle served in the Senate from 1987 to 2005 and was Majority leader from 2001 to 2003. Frist is a Robert Wood Johnson Foundation Board Member and both he and Daschle delivered remarks at the Robert Wood Johnson Foundation’s recent Second National Summit on Transparency in Health Care Costs, Prices, and Quality .