defining value in healthcare through price and cost transparency

Defining Value in Healthcare Through Price

and Cost TransparencyLaura Medford-Davis, MD MS

@MedfordDavis

The Following Presenters Have Disclosed Relevant Financial Relationships:Cedric Dark, MD MPH FAAEM FACEPCommunity Health Choice, Event Sponsorship; Schumacher Clinical Partners, Event Sponsorship Seth Trueger, MD MPHEmergency Physicians Monthly, Employee, Salary The Following Presenters Have Disclosed No Financial Relationships:Megan Douglas, JDElena M. Marks, JD MPHLaura Medford-Davis, MDBich-May Nguyen, MD MPH The Following Planners Have Disclosed Relevant Financial Relationships:Cedric Dark, MD MPH FAAEM FACEPCommunity Health Choice, Event Sponsorship; Schumacher Clinical Partners, Event Sponsorship The Following Planning Committee Members and Staff Have Disclosed No Relevant Financial Relationships:Emily DeVillers, CAEKay Whalen, MBA CAEJanet Wilson, CAE

I have nothing to disclose.

Objectives

• Evidence: Benefits of transparency• Policies around transparency• Resources for transparency

Health care biggest source of debt

1/3 of people with medical debt cannot pay for other basic needs; 2/3 cannot pay other general bills

2/3 of people who struggle to pay medical bills are insured

High Deductible Health Plans & Out-of-Network

Out-of-Network Bills

Percent of Covered Workers in a Plan That Includes a Deductible, 2006-2015

2006 2007 2008 2009 2010 2011 2012 2013 2014 20150%

10%

20%

30%

40%

50%

60%

70%

80%

90%

55%59% 59%

63%

70%74% 72%

78% 80% 81%

Average deductibles >$1,200 for Employer-Sponsored insurance and >$2,900 for Obamacare

Less than 1 in 6 doctors consistently discussing costs with patients

79% say shopping for health care is difficult, and 67% who tried to negotiate were unsuccessful

Objectives

• Evidence: Benefits of transparency• Policies around transparency• Resources for transparency

Evidence is Mixed

• Patients informed of MRI costs and options pre-MRI– 18% cost reduction

• Employer offered a price transparency tool– Tool used before 6% of claims– Those who used it were more expensive pre-tool– 14% cost reduction

• Employer offered a price transparency tool and another did not– 10% of employees used it– $59 price increase

Objectives

• Evidence: Benefits of transparency• Policies around transparency• Resources for transparency

Best Practices for Transparency

• Estimates tailored to the patient, provider, and insurance plan– Specific prices, not averages, medians, or ranges

• Quality information• Real-time availability

Problems with Current Transparency Tools

• Episodes not clearly defined– CPT codes

• Limited number of services included• Not linked to quality• Hard to keep up-to-date with inflation and contract

changes• Skewed by overutilization (and underutilization)

Price and Complication Variation – Medicaid Vaginal Delivery (HCi3)

Barriers to Transparency

• Non-disclosure agreements• Price protected under Trade Secrets• Most-Favored Nation clauses• Anti-tiering clauses

HCi3 – State Report Card on Price Transparency Laws

28 States Have Price Transparency Laws

• Allow states to collect information• Require hospitals to disclose to the state• Average charges or chargemasters• Price disclosure upon request

States with Stronger Laws

• MA & WA: Insurance companies → Patients• KS: Insurance companies → Providers• CO: public all payer claims database

– Hospitals → Patients (average cost)

California: Price, Price change, Quality

Florida Hospital CompareCare

Florida # of Hospitalizations, Charge Range, and Average Length of Stay

Oregon PricePoint: Volume, LOS, Price

New Jersey Price Compare: Volume, Price

Objectives

• Evidence: Benefits of transparency• Policies around transparency• Resources for transparency

Dartmouth Atlas of Health Care

Dartmouth Atlas of Health Care

Series1$0.00

$50,000.00

$100,000.00

$150,000.00

$200,000.00

$250,000.00

$219

,591

.42

$141

,546

.80

$119

,526

.19

$119

,299

.22

$117

,916

.27

$102

,629

.93

$99,

255.

48

$82,

744.

36

$77,

528.

25

$68,

835.

92

$42,

120.

81

1. Los Angeles Community Hospital37. MD Anderson Cancer Center97. Brigham & Womens98. Hospital of the University of Pennsylvania113. Park Plaza Hospital266. St Lukes Episcopal328. Memorial Hermann Medical Center841. Cleveland Clinic1093. Scott & White Memorial1687. Geisinger2074. Brookings (South Dakota)

Health Care Cost Institute - Guroo.com

Health Care Cost Institute - Guroo.com

Screening Colonoscopy

Screening Colonoscopy

Objectives

• Evidence: Benefits of transparency• Policies around transparency• Resources for transparency

Key Takeaways

• We have a lack of transparency in the USA• Evidence on the benefits of transparency is mixed• The majority of states have “policies” but most are

weak and ineffective• Resources for cost comparisons exist, but most

provide averages or insurer-specific information

Questions