Consultants to Hospitals: Prepare for Transparency – Brian Klepper

We must view and treat the community as the "owner" to whom we are fully accountable. Aggregate financial performance data, aggregate productivity performance and aggregate quality and patient satisfaction data belong in the public realm. How else can consumers make a decision to…support us?

— Rich Umbdenstock, President and CEOAmerican Hospital AssociationInterview in Hospitals and Health Networks, 10/18/04

Most health care professionals sincerely believe in performance transparency, especially if it applies to someone else. Three years after the encouragement of Mr. Umbdenstock and similar pronouncements by colleagues throughout the industry, many physicians, health plan executives and hospitals executives remain extremely resistant to public reporting of pricing and performance.

Norton Healthcare in Louisville KY has developed one of the most progressive and forthright quality reporting efforts in the country. On their site, they provide their performance figures on a range of indices, indicating where they fall above or below national benchmarks. (You can just imagine how thrilled their staffs were with this decision to "bare all." ) The home page for their quality section lists six principals that drive their reporting.

   1. We do not decide what to make public based on how it makes us look.

   2. We give equal prominence to good and bad results.

   3. We do not choose which indicators to display.

   4. We are not the indicator owner.

   5. We display results even when we disagree with the indicator definition.

   6. We believe unused data never become valid. 

Norton sets a fine example for hospitals. But now, as demands for transparency become more compelling, the mega-consulting firms, always quick to lead the way and claim credit once a trend has been firmly established, are throwing their hats into the ring as well, hoping to provide guidance for tidy if exorbitant sums.

And so it is not surprising that the consulting firm Grant Thornton, in its spring newsletter Health Care Rx, has a thoughtful, pragmatic article urging hospitals to review and potentially change their pricing, document justifications when necessary, and generally take steps to ensure that they’re prepared as transparency efforts become irresistible. Its a good piece and, for hospital execs, well worth a few minutes time.

4 replies »

  1. Whether or not hospitals or physicians like it, transparency is here…and will continue to become a more visible part of consumer healthcare decision-making.
    Just a few weeks ago, the WSJ wrote an article about a Consumer Website that sued the HHS for physician-specific performance data in five states…and WON! In Washington, Ohio, DC, Virginia, and Maryland, this Web company (not sure if it’s not-for-profit) will provide performance benchmark by individual physician. Moreover, they are continuing litigation to get access to all 50 states.
    Doctors outcomes, including mortality rates, will be in the public eye. This will have huge implications in the future, as consumerism and transparency mature.

  2. If I remember correctly, CDHP started with benefits consultants telling employers how to shift cost and risk onto their employees.

  3. Transparency is an interesting issue. Most people try to argue me off the point, but if I remember correctly, CDHC and consumerism started around quality of care. It was not about cost shifting as it has become for many people today.
    The original goals were to make information available to people so they could make informed decisions about quality and cost. I may be willing to go to a lower quality establishment for a certain common disease (e.g., flu) while I am willing to pay a lot more for a disease like cancer.
    Providers need to embrace the data and use it to influence consumers and drive correct behaviors.