Last week, CMS unilaterally released chargemaster data from 300 hospitals around the country. As David Dranove summed up well in his recent piece, this is an old hat. Yes, there are big variations in hospitals’ chargemasters. And yes, there is a lot of buzz around consumer price shopping.
A Kayak for hospitals is all well and good, but hospitals are cash-strapped as it is and there is only so much money to be saved by driving down the costs the hospital charges the health care plan unless the waste within the hospital is addressed. I would like to highlight perhaps one of the most exciting things going on under the radar in US healthcare today: using price transparency data within the hospital.
Hospitals are now reimbursed a capitated amount according to each patient’s diagnostic-related group. Capitated payment means, essentially, that the hospital receives a set amount of dollars for each patient that walks through its doors with a given diagnosis — say, $X for a patient with pneumonia or $Y for a patient with MI. Regardless of how many drugs, tests, or scans the hospital uses for the patient, it will still get the same compensation from the insurance company.
Yet, the physician up until now still acts as a kid in a candy store, running up a bill without awareness of cost or value. This is largely because the doctor is ordering from a menu without prices. I have talked to many physicians, in both out-patient and in-patient settings across seven health care systems around the country — they want a menu with prices.
I have seen firsthand the motivation for this, as pay-for-performance model is beginning to take over with my own practice. Gone are the days where doctors’ salaries are unhitched to the cost-effectiveness of care. Everyone is now in the same boat.As a neurologist, I want to share a few examples regarding stroke care that illustrate the potential savings available from educating physicians regarding cost, and also some pitfalls to avoid that could compromise patient care.
Continue reading “Using Price Transparency Data Within the Hospital”
Filed Under: THCB
Tagged: Costs, David Halpert, Hospitals, pricing data, Transparency
May 16, 2013
The recent Medicare report on variation in hospital “prices” is not exactly news. In fact, I wonder why anyone (including the NY Times and NPR) covered it, let alone make it a lead story.
As you probably know, Medicare reported that hospital charges for specific treatments, such as joint replacement surgery, greatly vary from one hospital to another. (This includes charges for all services during the hospitalization, including room charges, drugs, tests, therapy visits, etc.) Everyone in the healthcare business knows that charges do not equal the actual prices paid to hospitals, no more than automobile sticker prices equal the prices that car buyers actually pay. Except that for the past thirty years, the gap for hospitals greatly exceeds (in percentage terms) the gap for cars. This is not just a nonstory, it is an old nonstory.
So reporters tried to give it a new spin. One angle concerns the uninsured, who may have to pay full charges. I will write about this in a future blog. Another angle is that by publishing these charges, Medicare will encourage patients to shop around. That is the subject of this blog.
I suppose it is okay to tell patients that the amount they might have to pay out of their own pockets may vary from one hospital to the next. But the published charge data is useless for computing out of pocket payments; in fact, it may be worse than useless. As even the NY Times noted, insured patients make copayments based on prices that their insurers negotiate with hospitals. These prices are essentially uncorrelated with charges. So a patient who visits a hospital with low charges may well make higher out-of-pocket payments than a patient who visits a high charge hospital. It is a crap shoot.
Continue reading “The Rest of the Story About Hospital Pricing”
Filed Under: OP-ED, THCB, The Business of Health Care
Tagged: Affordable Care Act, bitter pill, CMS, Costs, David Dranove, Hospitals, Pharma, Price controls, Transparency
May 9, 2013
Arguably, the biggest news story coming out of HIMSS last month was the announcement of the CommonWell Health Alliance – a vendor-led initiative to enable query-based, clinical data sharing. So much has been written about CommonWell that there is little need to rehash what has been said before.
What has not been said, or at least has been sensationalized nearly to the point of irrelevance is the whole controversy surrounding Epic and how they were not invited to join the CommonWell Alliance until after the announcement. None other than Epic’s own founder and CEO, Judy Faulkner, has gone on record stating the Epic was unaware of CommonWell prior to the announcement. Faulkner has gone on to question the motives of CommonWell, in an effort to subvert it, in her highly influential role on the Dept of Health & Human Services HIT workgroup committee.
That was the last straw.
It is one thing to moan and groan at the HIT love fest that is HIMSS, where vendors commonly discount the announcements of competitors. But it is quite another thing to be a part of a highly influential body that is defining nationwide HIT policy and make the same claims over again, especially when they are frankly not true.
Continue reading “The Story Behind the CommonWell Story”
Filed Under: Tech, The Business of Health Care
Tagged: CommonWell Health Alliance, EHR, EHR vendors, Epic, HIMSS 2011, HIMSS 2013, HIT, Interoperability, Judy Faulkner, Transparency, Wang Laboratories
Apr 13, 2013
If consumers could review and shop for health care coverage as easily as they do television sets, costs would decline and we wouldn’t have as large a health care crisis. At least that’s what some folks would lead us to believe. But the picture isn’t that clear.
A recent article in The Wall Street Journal reports how companies are using private health insurance exchanges to lower costs and give employees more flexibility. The exchanges are similar in nature to those mandated by the Patient Protection and Affordable Care Act (a.k.a. Obamacare)—the difference being a private company is overseeing the exchange and not the federal government or states. Employees are able to log on to a site, review coverage plans with different benefits and a range of deductibles, and choose what works best for their budget.
A consultant running one such exchange was enthusiastic about its progress thus far. “When people are spending their own money, they tend to be more consumeristic,” Ken Sperling, national health exchange strategy leader for Aon Hewitt, a unit of AON Plc, told the Journal. (Aon itself, as well as Sears Holdings Inc. and Darden Restaurants are using a new Aon run exchange.) Benefits consultants Mercer (part of Marsh & McLennan Cos.) and Buck (part of Xerox) are rolling out similar private exchanges.
There’s no doubt that consumers are more astute, on average, regarding price for benefit when directly paying for goods and services.
Continue reading “The Smarter Healthcare Consumer Myth”
Filed Under: THCB, The Business of Health Care
Tagged: Affordable Care Act, Consumer-driven health plans, John S. Wilson, Price controls, the uninsured, Transparency
Mar 20, 2013
The EHR vendor lock-in business model is under attack by frustrated physicians and patients and the reality that health care cost and quality are more opaque than ever. Doug Fridsma of ONC politely talks of the need to move from vertical integration of health care services to horizontal integration where patients can choose with their feet. Farzad Mostashari calls for moral behavior and price transparency. The Society for Participatory Medicine says “Gimme My DAM Data” and Patient Privacy Rights asks HHS to allow physicians to prescribe health IT without interference from the institution or the vendor.
The vendors’ response is a charm offensive called CommonWell Health Alliance with a pastel .org website. The website is presumably the official source of information about CommonWell and it lays out the members’ strategy to preserve the vendor lock-in business model for a few $Billion more. Ok, maybe more than a few.
The core of the CommonWell strategy is to avoid giving patients their data in a timely and convenient way.
Continue reading “The #CommonWell Open Discussion Forum”
Filed Under: OP-ED, Tech, THCB
Tagged: Adrian Gropper, BlueButton, CommonWell, CommonWell Health Alliance, Direct Project, Doug Fridsma, EHR, EHR vendors, Farzad Mostashari, HHS, patient data, Society for Participatory Medicine, Transparency
Mar 18, 2013
American consumers know more about the quality and prices of restaurants, cars, and household appliances than they do about their health care options, which can be a matter of life and death. While we have made some progress in getting consumers reliable quality information thanks to organizations like Bridges to Excellence and The Leapfrog Group, for most Americans, shockingly little information still exists about health care prices, even for the most basic services. And several studies have shown us that the price for an identical procedure can vary as much as 700 percent with no difference in quality. Moreover, with health care comprising 18 percent of the US economy and costs rising every day, it is extremely troubling that most health care prices are still shrouded in mystery.
Our organizations have been steadily pushing health plans and providers to share price information more freely, and we are seeing progress. But public policy—or even just pending legislation—can provide a powerful motivator as well.
Unfortunately, our new Report Card on State Price Transparency Laws shows most states are not doing their part to help consumers be informed and empowered to shop for higher value care. In the Report Card released Monday, 72 percent of states failed, receiving a “D” or an “F.” Just two, Massachusetts and New Hampshire, received an “A.” The Report Card based grades on criteria including: sharing information about the price of both inpatient and outpatient services; sharing price information for both doctors and hospitals; sharing data on a public website and in public reports; and allowing patients to request pricing information prior to a hospital admission.
Continue reading “States Must Step Up to Help Consumers Gain Access to Health Care Prices”
Filed Under: OP-ED, THCB, The Business of Health Care
Tagged: Catalyst for Payment Reform, consumer-patients, Costs, Francois de Brantes, Health Care Incentives Improvement Institute, Hospitals, Massachusetts, New Hampshire, Quality, Suzanne Delbanco, The States, Transparency
Mar 18, 2013
There’s been a lot of discussion of transparency in health care recently, e.g., a USA Today op-ed and a counterpoint by Paul Ginsburg. The appeal of transparency is obvious. As movingly documented by Steven Brill in Time, prices are high and often differ quite substantially, even across close by providers. However, we don’t know the prices for the health care that we consume, and it’s extremely difficult to find out what these things cost (e.g., this recent study in JAMA).
While the appeal of transparency is obvious, it’s important to realize that buying health care is not like buying milk at the grocery store. A key factor is health insurance. Health insurance is very important — people need to be insured against the catastrophic expenses that can occur with serious illness. Thus people with high health care expenses won’t be exposed to most of those expenses (and shouldn’t) and therefore will have no reason to respond to information about health care prices.
Continue reading “Can Health Care Transparency Make A Difference?”
Filed Under: OP-ED, THCB
Tagged: bitter pill, Costs, Insurance, JAMA, Martin Gaynor, National Institute of Health Care Management, Paul Ginsburg, Transparency
Mar 9, 2013
The big news at HIMSS13 was the unveiling of CommonWell (Cerner, McKesson, Allscripts, athenahealth, Greenway and RelayHealth) to “get the ball rolling” on data exchange across disparate technologies. The shame is that another program with opaque governance by the largest incumbents in health IT is being passed off as progress. The missed opportunity is to answer the call for patient engagement and the frustrations of physicians with EHRs and reverse the institutional control over the physician-patient relationship. Physicians take an oath to put their patient’s interest above all others while in reality we are manipulated to participate in massive amounts of unwarranted care.
There’s a link between healthcare costs and health IT. The past months have seen frustration with this manipulation by industry hit the public media like never before. Early this year, National Coordinator for Health Information Technology Farzad Mostashari, MD, called for “moral and right” action on the part of some EHR vendors, particularly when it comes to data lock-in and pricing transparency. On February 19, a front page article in the New York Times exposed the tactics of some of the founding members of CommonWell in grabbing much of the $19 Billion of health IT incentives while consolidating the industry and locking out startups and innovators. That same week, Time magazine’s cover story is a special report on health care costs and analyzes how the US wastes $750 Billion a year and what that means to patients. To round things out, the March issue of Health Affairs, published a survey showing that “the average physician would lose $43,743 over five years” as a result of EHR adoption while the financial benefits go to the vendors and the larger institutions.
Continue reading “CommonWell Is a Shame and a Missed Opportunity”
Filed Under: OP-ED, THCB
Tagged: Adrian Gropper, bitter pill, CommonWell, Costs, Data, EHR vendors, HIMSS 2013, HIT, IHE 2.0, Interoperability, Transparency
Mar 6, 2013
Over the past decade, there has been yet another debate about whether pay-for-performance, the notion that the amount you get paid is tied to some measure of how you perform, “works” or not. It’s a silly debate, with proponents pointing to the logic that “you get what you pay for” and critics arguing that the evidence is not very encouraging. Both sides are right.
In really simple terms, pay-for-performance, or P4P, can be thought about in two buckets: the “pay” part (how much money is at stake) and the “performance” part (what are we paying for?). So, in this light, the proponents of P4P are right: you get what you pay for. The U.S. healthcare system has had a grand experiment with P4P: we currently pay based on volume of care and guess what? We get a lot of volume. Or, thinking about those two buckets, the current fee-for-service structure puts essentially 100% of the payments at risk (pay) and the performance part is simple: how much stuff can you do? When you put 100% of payments at risk and the performance measure is “stuff”, we end up with a healthcare system that does a tremendous amount of stuff to patients, whether they need it or not.
Against these incentives, new P4P programs have come in to alter the landscape. They suggest putting as much as 1% (though functionally much less than that) on a series of process measures. So, in this new world, 99%+ of the incentives are to do “stuff” to patients and a little less than 1% of the incentives are focused on adherence to “evidence-based care” (though the measures are often not very evidence-based, but let’s not get caught up in trivial details). There are other efforts that are even weaker. None of them seem to be working and the critics of P4P have seized on their failure, calling the entire approach of tying incentives to performance misguided.
The debate has been heightened by the new national “value-based purchasing” program that Congress authorized as part of the Affordable Care Act. Based on the best of intentions, Congress asked Medicare to run a program where 1% of a hospital’s payments (rising to 2% over several years) is tied to a series of process measures, patient experience measures, and eventually, mortality rates and efficiency measures. We tried a version of this for six years (the Premier Hospital Quality Incentives Demonstration) and it didn’t work. We will try again, with modest tweaks and changes. I really hope it improves patient outcomes, though one can understand why the skeptics aren’t convinced. Continue reading “Getting Pay-For-Performance Right”
Filed Under: Hospitals, THCB
Tagged: Ashish Jha, Hospitals, Incentives, JAMA, Medicare, Outcomes, Pay for Performance, PPACA, Quality, Transparency, Value-based Purchasing
Feb 4, 2013
As the instigators of the OpenNotes initiative, we are thrilled that OpenNotes is being adopted by the VA. Prompted by Dr. Kernisan’s thoughtful post , the ensuing lively discussion, and our experiment with 100 primary care physicians and 20,000 of their patients ), we thought it useful to offer some observations drawing both on our experiences as clinicians and on ongoing conversations with clinicians and patients.
First and foremost, we don’t have “answers” for Dr. Kernisan. Our hope is to contribute to new approaches to these sticky questions over time. And, remember that patients’ right to review their records is by no means new. Since 1996, virtually all patients have had the right to access their full medical records. What’s new is that OpenNotes takes down barriers such as filling out forms and charging per page, while actively inviting far more patients to exercise this right in an easier and accessible way.
We think of open visit notes as a new medicine, designed like all therapies to help more than it hurts. But every medicine is inevitably accompanied by relative and absolute contraindications, and it’s useful to remember that it’s up to the medical and patient community to learn to take a medicine wisely as it becomes more widely available. A few specific thoughts:
Dementia and diminished physical capacity:
When a clinician notices symptoms or signs of dementia, chances are the patient and/or family has already been worrying about this for some time. Is it safe for the patient to live alone? What about driving? How and when could things get worse? They may actually be relieved when the doctor brings up these topics and articulates the issues in a note. Moreover, their worst fears may prove unfounded, and reading that in a note can be reassuring. But we need to consider the words we write so we don’t rush to label a condition as “Alzheimer’s.” Being descriptive is often better and more helpful than assigning one word definitions. In itself, OpenNotes reminds the health professional to choose words wisely. That doesn’t have to mean more work, but we believe it can certainly mean better notes that can be more easily understood by the patient. We urge colleagues to stay away from “The patient denies…,” or “refuses,” or “is SOB.”
Abuse or diversion of drugs, possible substance abuse, or unhealthy alcohol use:
These subjects are always tough, and what to write down has been an issue for clinicians long before they worried about open records. Over the course of our experiment in primary care, we have heard stories from patients about changing their attitudes and behavior after reading a note and “seeing in black and white” what their doctors were most worried about. Though substance abuse may seem like a particularly sensitive topic, at least one doctor in our study is convinced that some of his patients in trouble with drugs or medications did better as a result of reading his notes. And while some patients may reject our spoken (or unspoken) thoughts that we document in notes, experience to date makes us believe that more patients will be helped than hurt, and that it is worth the tradeoff.
Continue reading “OpenNotes: Drilling Down to Assure a Healthy Evolution”
Filed Under: THCB
Tagged: Electronic Medical Records, Harvard Medical School, OpenNotes, Privacy, Robert Wood Johnson, Tom Delbanco, Transparency
Jan 27, 2013