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.
While most states have laws that met few, if any, of these criteria, Massachusetts and New Hampshire met many of them. In 2003, the New Hampshire Legislature mandated the collection of claims data from all commercial insurers in the state. These data were used to create the New Hampshire Comprehensive Health Information System (NHCHIS) dataset, which can calculate prices for common procedures. A public website was launched in 2007, providing consumers, both insured and uninsured, with an estimate of their own out of pocket responsibility compared to the price of the entire procedure or treatment.
In 2006 and 2012, Massachusetts enacted legislation that required the collection and public reporting of cost and quality data for procedures and diagnostic tests. MyHealthCareOptions provides consumers with the ability to compare prices and quality of physician practices and hospitals based on location or specific conditions and procedures.
While these two states are leading the pack, their legislation is by no means perfect. That’s because the data, however comprehensive, fails to provide a consumer-patient with personally relevant information at the time of need. Having general comparative information using one to two-year old data is important, but insufficient. Imagine the consumer outcry if, for example, supermarkets posted 2011 prices but charged 2013 prices when the shopper gets to the cashier. And yet that’s what the “best” states have to offer.
As such, health plans can and should help by making sure their cost calculator tools, available to plan members, are robust and meet all of Catalyst for Payment Reform’s Comprehensive Specifications for Consumer Transparency Tools. Employers should be allowed to take their own claims data, including the price components, to third-party vendors, like Castlight Health or Change Healthcare, to build more customized shopping tools for their employees. Some health plans, however, prohibit self-funded employers from doing this. And some hospitals institute “gag” clauses in their contracts with health plans to prevent them from disclosing the prices they bill. Consequently, more comprehensive state-based legislation could ensure that consumer-patients have an unalienable right to get relevant, timely, accurate and personalized information on the comparative costs of common procedures for hospitals and physicians in their network.
We plan to update the Report Card on an annual basis and hope to observe measurable progress, because, unfortunately, we expect to see health care costs continue to rise, and consumers continue to assume a greater share of the cost. It’s time consumers and the employers who still pay most of their health care bills had comprehensive, accurate information about health care prices. Let’s hope the 2014 Report Card yields more “A” grades, and that those getting an “A” are truly at the top of the class.