May 22, 2013 Back to All Blogs

A ‘Point of No Return’ in Health Care Transparency

I’m not usually one to welcome the arrival of a bill, but this month’s AT&T cell phone bill, delivered with a personalized video explaining our family’s charges was riveting! It sent my inner health reform geek into overdrive.PointOfNoReturn

Believing that the light and heat of greater cost and quality transparency can bring about transformative, systemic improvements in healthcare, I asked: “What if health insurance companies produced a similar video breaking down health care costs and benefits?”

Far too many healthcare consumers are in the dark about how much health care costs and any rationale about what their health plans cover (not to mention the quality track record of those providing healthcare). Most agree that we can no longer afford this lack of awareness.

The 3-minute video from AT&T featured my previous months’ charges and payments, an explanation of new charges and… here’s the gold for health care: a detailed breakdown of each charge, what my plan covers, and how much each service used cost me.

Cell phone companies have studied what customers want in their bills to accomplish two things: 1)They want to save money by avoiding calls to their customer service line asking what each charge means, 2)They want to make you feel like you are getting value for what you are paying for so you understand how much of your services you are using.

While the name of the letter sent by insurance companies implies an “Explanation of Benefits (EOB)” – few find it illuminating or timely. Sent several weeks and even months after receiving a healthcare service, the language is opaque and often riddled with confusing jargon (i.e. titling fundamental health care needs like needles for insulin “durable medical equipment.”). Ideally, consumers should be able to learn what medical service was provided, what the insurer paid, why a deductible applied to one service like a lab test, but not another, i.e. physical exam, and what is still owed.

Last week’s revelations of dramatic variations in what hospitals charge for the same procedures included in newly released Centers for Medicare and Medicaid Services data sent a few shock waves through the blogosphere, but it also confirmed what many health policy wonks have known for a long time. There is no consistency in pricing for health care services, except that those without insurance often end up being charged the most.

This will continue to be a problem when the Affordable Care Act takes effect in January. The majority of people buying coverage in the new health insurance exchanges will likely choose the cheapest policies designed to cover only 60 percent of medical expenses, paying the rest themselves. But will this be the beginning of the end to irrational pricing, as consumers picking up a larger share of the tab start asking questions and become choosier about which health plan they select in the new state health insurance exchanges? Will it spur an increase in consumers comparing provider prices and performance on outcome and quality measures?

Just this week a Miami hospital CEO announced that his hospital will start publishing what it charges insurers for procedures and challenged other hospitals to do the same. I think we’ve reached a critical “point of no return” in healthcare price transparency, and not a moment too soon.

Comparing Cost & Quality
The success of the new health insurance exchanges will depend on the systemic capture of health data that can answer critical questions about quality and cost. What are we getting for what we pay? The URAC STAR Data System — a technology platform for accrediting health plans participating in state health insurance exchanges – will capture data from insurance claims, pharmacy transactions, and provider charts.

The data portal Pantheon created for URAC will track health plan performance across 38 quality measures, including cancer and diabetes screenings, obesity and tobacco use prevention and measures related to depression and heart disease.

CMS’s release of Medicare data showing dramatic variation in hospital pricing unleashed a host of analyses that continue to raise and answer important questions about what hospitals charge, insurance pays and patients get for it. Greater transparency in hospital charges and health insurance companies EOB’s combined with provider performance data should be the next “transparency frontier” conquered.

Speaking at a HealthAcademy webinar sponsored by the Robert Wood Johnson Foundation focused on interpreting the new CMS price data, executive director of Catalyst for Payment Reform Suzanne F. Delbanco noted that few (if any) health data websites allow consumers to see both price and quality information on the same screen. That’s “what’s next” for companies like ours developing technology solutions that empower consumers to act on health data. Let’s get started!

*Also check out:
All for One and One for All! 5 ways data and tech will shift health’s focus
Electronic Health Oracles
What’s rationality got to do with it? Health care’s price-quality connection
It is your damn data. Use if for personal and public good
What Turbotax and online dating can teach health care
Not your grandmother’s patient engagement – The Public Health Graph
Designing for health behavior change
What do we know about health care public reporting? Not enough.
Health care data’s tipping point
Five trends that show the digital health revolution’s potential to improve quality and cost
Red carpet premieres and animated reviews for health care public reporting

Mark Tobias (@PanthTech) is president of Pantheon, which combines technology expertise and a deep knowledge of health care, education, and social impact markets to provide online technology solutions for nonprofits, associations, and government.