Consumer Price

Transparency Brian Rosman

Health Care For All Massachusetts

rosman@hcfama.org

1. The Problem2. The Mass. Solution3. So, this is good,

right?4. Well, but…5. Better solution on

the way?

1. The Problem

“Imagine a department store whose customers are blindfolded before entering. A shopper might enter the store seeking to buy an affordable dress shirt and a tie, but exit it with a pair of boxer shorts and a scarf. Sometime later, he would receive an invoice, whose details would be incomprehensible to him, save for one item: a dollar amount in a framed box with the words: “Pay this amount.”

- Uwe ReinhardtJAMA, 11/13/13

2. TheMass.

solution

August 2012: Chapter 224

Cost Growth Goal ACOsMedical Homes Global PaymentsMalpractice Reform

Mergers Oversight

Public Health Prevention

Electronic Medical Records

Health Planning Medical Loss RatioPrimary Care Workforce

Mental Health Parity

End of Life Care Administrative Simplification

Transparency Provisions• Government Transparency– APCD– Cost Reports and data– Annual Cost Trends Hearings

• Utilization Review Criteria– Insurers must post UR criteria on

website– Effective October 2015

Consumer Price Transparency1. THE LAW– Insurers and 3d Party Payers must have

toll-free phone number and website to provide• estimated price• estimated cost sharing (deductible, co-pay)

– Patients can’t be charged more than estimate if they get those services

– Patients must be warned about unforseen services

– within 2 days now; real-time on 10/1/14 – Providers must give price information to

uninsured patients

Consumer Price Transparency

2. THE GUIDELINES– Web sites must be “consumer friendly”– If insurer requires CPT or other codes,

insurer gets code directly from provider. Patients need not provide codes.

– Upon request, insurer must provide prices for multiple providers in clear, comparable formats

– Must accommodate other languages, visually impaired

Consumer Price Transparency

3. THE CAMPAIGN– State contracting with advertising

firm– Web search ads that link to central

state page, with tips and links to all insurers

– Campaign ideas:

3. This is a good thing,

right?

A good thing for . . . • Uninsured• Out-of-Network Consumer• Insured patient with deductible or

co-insurance• Reference Pricing• Public information on variation• Competition lowers prices• Providers help steer patients• Patients have right to know

4. Well, but …

What Do Consumers Believe?

• Doctors, hospitals, treatments not viewed as commodities, but as a social good

• People want care determined by medical need, not finances

• Poor understanding of cost sharing dynamics

• Health plans not trusted source of information

- Lynn Quincy, Consumers Union

Where is the Quality Information?

• Quality information is –Non existent–Difficult to interpret–Out of date–Not specific enough to provider &

procedure

Price = Quality = Price

You Get What You Pay For

“I want the best health care. Money’s no [object]. Either pay the best, or maybe they miss something with the other scan. And that one little thing – you’re dead. Who knows?”

- Focus group participant

People Reject Tradeoffs“I want to know what treatment will give me the best results, and I don’t want, in the back of my head, a cash register working .”

People Want Revenge“I don’t care what the insurance is paying. I pay my – you know, it goes through my check. They got my money. It’s time to pay back.”

“That’s something I think we all collectively would like, to screw the man, if you will. I don’t care how much my insurance is paying.”

Do People Shop for Health Care?

• Physicians drive most decisions about treatments and location

• Hard to know in advance what services a patient will need

Would Better Shopping Make A Difference Anyway?

Top 1% Top 5% Top 10% Top 15% Top 20% Top 50% Bottom 50%

0%

20%

40%

60%

80%

100%

21%

50%

65%75%

82%

97%

3%

Chart Title

Percent of Population, Ranked by Health Care Spending

5. A better solution?

Mass State Website Coming

• Information comparing the quality, price and cost of health care services.

• Data concerning healthcare-associated infections and serious reportable events

• Definitions of common health insurance and medical terms

• A list of health care provider types and what types of services they are authorized to perform

• Factors consumers should consider when choosing an insurance product or provider group, including provider network, premium, cost-sharing, covered services, and tiering

Mass State Website Coming

• Patient decision aids with balanced presentation of the condition and treatment options, benefits and harms, with attention to the patient's preferences and values, and which may facilitate conversations between patients and their health care providers

• A list of provider services that are physically and programmatically accessible for people with disabilities;

• Research regarding ease of use, consult with organizations that represent health care consumers, and conduct focus groups that represent a cross section, including low income consumers and consumers with limited literacy. The website shall comply with the Americans with Disabilities Act.

Resources• Reinhardt , The Disruptive Innovation of Price Transparency

in Health Care, JAMA, 11/13/13http://jama.jamanetwork.com/article.aspx?articleid=1769895 (see also

http://economix.blogs.nytimes.com/2013/12/12/health-care-prices-move-to-center-stage )

• Massachusetts Chapter 224 summaryhttp://bluecrossmafoundation.org/publication/summary-chapter-224-acts-2012

• Quincy, Using Price And Quality Data: What Are The

Barriers Facing Consumers? http://www.ehcca.com/presentations/hctranssummit1/quincy_ms10.pdf

• Sommers et al, Focus Groups Highlight That Many Patients Object To Clinicians’ Focusing on Costs, Health Affairs, 2013http://content.healthaffairs.org/content/32/2/338.full.html

Resources• Aetna’s “Member Payment Estimator”

http://www.aetna.com/individuals-families/member-tools-forms/member-payment-estimator.html

• Hibbard et al, An Experiment Shows That A Well-Designed

Report On Costs And Quality Can Help Consumers Choose High-Value Health Care, Health Affairs, March 2012http://content.healthaffairs.org/content/31/3/560.full.html

• NCSL, Transparency and Disclosure of Health Costs and Provider Payments: State Actionshttp://www.ncsl.org/research/health/transparency-and-disclosure-health-costs.aspx

• Catalyst for Payment Reform, The State of the Art of Price

Transparency Tools and Solutions November, 2013http://catalyzepaymentreform.org/images/documents/stateoftheart.pdf