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Tag: price transparency

Why Isn’t Price Transparency Working in Healthcare?

By TAYLOR CHRISTENSEN, MD

I strongly believe that getting people the information and incentives necessary to choose higher-value providers and insurers is the solution to improving value in healthcare (see my Healthcare Incentives Framework). But, you say, we’ve tried that and it doesn’t work, and current efforts are a waste of time!

Here’s an example of some great research that you might use to support your opinion:

Examining a Health Care Price Transparency Tool: Who Uses It, and How They Shop for Care (Sinaiko and Rosenthal, Health Affairs, April 2016)

The news media would see this and report the main findings–that only 3% of enrollees used Aetna’s price comparison tool–and argue that even people who have the opportunity to shop for care will not do it, which they will interpret to mean any “consumer-driven” healthcare effort is proven through evidence not to work. People can wrest information to prove whatever they want.

But what if you actually read the study?

Sinaiko and Rosenthal found that only about 60% of enrollees even had a claim during their study period. And of those 60%, I’m guessing a large percentage of those were outpatient visits (primary care or specialty) with established providers, which are claim types that people historically do not shop for. Think about it, if you have your favorite hairdresser who knows you best, you have a relationship with that person, and you like how they cut your hair, are you going to price shop every single time you need to get your hair cut?

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Price Transparency Tools Are Still Struggling. We Offer Advice

The potential of price transparency tools to help consumers with high out-of-pocket medical expenses remains largely untapped, according to two recent studies published in Health Affairs and other recent research by Consumer Reports and Public Agenda.

One study found that while more than half of the nearly 3,000 patients surveyed said they would use a website to shop for healthcare if they knew of one, only 13 percent actually looked for information on future healthcare spending and only 3 percent compared prices and costs across providers.

In the second study, patients with access to a price transparency tool focused on “shoppable” services did not experience overall lower spending on those services, and only 12 percent used the tool to begin with. On a positive note, patients who compared prices for imaging tests decreased spending an average 14 percent.

Research by us at Consumer Reports and a survey by Public Agenda (publicagenda.org) signals additional cautious hope for consumer’s use of price transparency tools in the future.   Both projects were sponsored by the New York State Health Foundation (nyshealthfoundation.org) and received additional funding from the Robert Wood Johnson Foundation (rwjf.org).

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A New Era in Value-Driven Pharmaceuticals

flying cadeuciiAt the end of March the Amercian College of Cardiology (ACC) and the American Heart Association (AHA) issued a joint statement saying they “will begin to include value assessments when developing guidelines and performance measures (for pharmaceuticals), in recognition of accelerating health care costs and the need for care to be of value to patients.”

You may have heard of value-based medicine, but are we entering a new era of value-based medications or value-driven pharma?

Price transparency is great, but it has be combined with efficacy to get to value (price for the amount of benefit). Medical groups are catching on to how important value assessments are, because if patients can’t afford their medication, they won’t take their medication, and that obviously can turn into poor outcomes.

Twenty-seven percent of American patients didn’t fill a prescription last year according to a Kaiser Family Foundation Survey. This trend seems likely to continue as we move toward higher-deductible plans, where those with insurance can have great difficulty affording medications.

Included in the ACC/AMA statement was a quote from Paul Heidenreich, MD, FACC, writing committee co-chair and vice-chair for Quality, Clinical Affairs and Analytics in the Department of Medicine at Stanford University School of Medicine.

“There is growing recognition that a more explicit, transparent, and consistent evaluation of health care value is needed…These value assessments will provide a more complete examination of cardiovascular care, helping to generate the best possible outcomes within the context of finite resources.”

Spreading risk and payment to different members of the health care value chain is beginning to make it apparent to more people and organizations that resources are finite. Patients and their physicians are starting to ask which treatments are worth the cost and have best likelihood of adherence.

An outgrowth of the move toward digital health and accountable care is that we’re entering every patient into a potential personal clinical trial with their data followed as a longitudinal study, and we can look much more closely at efficacy and adherence and reasons why it happens and why it doesn’t.

It won’t be long before we start to see comparative effectiveness across a variety of treatments and across a variety of populations. When we can connect outcomes data, interventions and costs all in the same picture we begin to see where the value (price against results) is and where it isn’t.

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