Price Transparency

What is Price Transparency?

Price transparency is a term used to describe efforts to make the price of health-care services available to consumers. The goal of price transparency1 is to help consumers be better stewards of health-care dollars. This is accomplished by providing patients access to the price of health services so that they can begin to make more informed decisions about their care. Most price transparency tools are geared toward the following populations: insured patients with high out-of-pocket costs, patients with no insurance coverage, patients with insurance who seek care from out-of-network or nonparticipating providers, or self-insured employers who are aiming to rein in rising employee health-care costs by using charges as a lever. The movement has gained more traction and media attention in recent months due to the increasing popularity of high-deductible health plans,2 which are causing health-care consumers to become more price sensitive at the point of care. Some experts think that providing patient’s access to this type of data and encouraging them to shop around for care could save the U.S. up to $184 billion dollars in health-care spending.3

Why is It Important to Gastroenterologists?

 

The cost of colonoscopy is all over the headlines.

By now, most of you are familiar with the 2013 New York Times4 and Washington Post5 articles on the “cost” of colonoscopy. The extreme variation in the charges for this procedure (along with other procedures like hip and knee replacements) is one of the most widely-cited areas of scrutiny in the price transparency discussion. You may have already felt pressure from patients asking you about the price of the procedure.

This scrutiny can be especially frustrating for gastroenterologists considering that physician professional fees make up the smallest portion6 of the overall cost of colonoscopy when facility and anesthesia fees are factored in.

Patients will have access to your price data if they don’t already.

Data on the price of services at your practice or hospital is probably already available. If it’s not, it will be soon. There are dozens of efforts underway to release commercial and Medicare price data (see next section for more information on this).7

Lack of preparedness for price transparency could affect your bottom line.

After a recent price transparency effort by Blue Cross Blue Shield of North Carolina, one provider felt so pressured by the data that he reported immediately lowering the cost of his procedures.8 Although anecdotal, this incident serves as a call to action. It is important that gastroenterologists get ahead of this trend so as not to be caught blindsided by the release of price data and feel strong-armed into lowering costs in order to remain competitive.

Understanding how much you and your peers cost is imperative for success under value-based care.

Price transparency can also affect referral relationships. If many primary care practices in your market are operating under value-based contracts, they might be feeling pressured to refer to lower cost providers in order to keep costs down for their attributed patients.9 Similarly, if your practice or hospital is experimenting with bundled payments or other alternative payment models, price transparency data may affect where you perform procedures and where you refer patients.

Who are the Major Players in Price Transparency? What Types of Data are They Publishing?

The Brookings Institute recently published a very useful scan of the current landscape of price and data transparency tools. For each resource, the authors note the type of payment information included, which parties stand to benefit, and whether the tool provides price data, quality data, or both. The most relevant resources to AGA members are the consumer-facing ones.

An article from The George Washington University School of Public Health includes more information on each price transparency resource. It also discusses two subscription-based tools for self-insured employers, Castlight Health and Change Healthcare, which were not included on the Brookings list.

The vast majority of insurers10 also make price data available to their clients, and increasingly, to the public. Analysts predict payors will continue to do this in more systematic and comprehensive ways than ever before. Finally, even Medicare11 has made physician reimbursement data public.

What are the Problems with Early Efforts for Price Transparency?

  • The cost data is inexact. As we all know, determining the cost of a health-care service is difficult — and can often vary significantly based on patient insurance coverage, complications, and the location of the procedure. Some price transparency resources publish self-reported prices from patients,12 others publish charge master data,13 and still others publish out-of-pocket costs based on specific health coverage.14 More often than not, these prices do not reflect how much a patient will actually pay for the service. It is also easy for consumers to conflate the charge, price and cost15 of a health-care service — when in fact they each signify very different components of payment.
  • The scope of services is not standardized. Often, published price data just reveals one piece of the puzzle. Since most hospitals and provider organizations have not implemented bundled payment models, the “price” of a procedure may not include the important associated costs16 — anesthesia, pathology and facility fees, for example. Some transparency tools post price data that does not allow for a truly “apples to apples” comparison17 — the price for one provider will encompass a bundle of care, while the price for another will just include the physician fee, for example.
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  • There is often no quality data to accompany the price data. If there is quality data, typically it is either flawed or incomprehensible to patients. Many patients do not understand the (nonexistent) relationship between quality and cost, and price transparency tools can have a counterintuitive effect on patient behavior18 — consumers choose the higher-priced provider because they assume the service is of higher quality. In order to truly make a value-based decision, patients must also have access to price and quality information side-by-side.19 This means that gastroenterology needs to have a meaningful discussion about what type of quality information is truly important to improve outcomes, reduce waste and deliver excellent care to patients.
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  • Sometimes it is impossible to provide an accurate price estimate. Much of health care is not preplanned or predictable.20 Patients routinely experience complications or require emergent care for which they cannot shop around. Procedures (like colonoscopy) can vary based on patient characteristics that are impossible to predict ahead of time. Even the most well-intentioned efforts to provide patients with a price estimate ahead of time can be thwarted by unforeseen circumstances — rendering price transparency irrelevant in emergent or complex cases.

How Should You Respond to This Trend?

 

Don’t panic…yet.

So far, the release of price data has not significantly affected consumer behavior. Only 2 percent of commercial health plan clients with access to price transparency tools actually use them.21 In one JAMA study,22 consumers only achieved meaningful savings on ancillary services — advanced imaging and lab tests — when provided access with an employer’s price transparency tool. However, that does not mean patients are not actively comparing the costs of GI procedures — colonoscopy is the fourth-most searched term in the entire Castlight Health database.23

Verify the accuracy of your publicly available data.

Ask your office manager to look through the publicly available price transparency resources. If your price or quality data is inaccurate, incomplete or out of date, contact the organization to insist that it is changed or removed.

Develop close relationships with referring primary care providers.

Primary care referrals are still your number one source of patient business,24 so it is important to develop strong relationships with primary care providers in your market. Promote your practice’s provision of high quality, cost-efficient care, especially to primary care providers operating under accountable payment models.

Practice high-quality patient care, and promote it.

Patients value high quality over a low price.25 Promote the quality of your practice in a way that is accessible and comprehensible to patients. Do patients really care about adenoma detection or cecal intubation rates? They want to know how often you perform a complete, thorough exam the first time, and whether you have had any scope infections. If you become known as the highest quality GI practice in your market, patients will choose to see you, regardless of price.

AGA can help. The resources included in the Roadmap to the Future of GI can assist in improving the quality of your practice, while our Digestive Health Recognition ProgramTM will ensure you are getting the credit you deserve for practicing high-quality care.

Find out how much the services you provide cost.

Gone are the days of ignoring patient questions about the cost of basic tests and procedures. While it might be impossible to give patients an exact dollar amount, ensure that your office can cite price ranges (with any necessary caveats) for the common office visits and procedures for the major health plans you accept.

Consider getting ahead of this trend by publicly releasing your practice’s data.

Some health systems26 have begun voluntarily posted their self-pay prices on their websites to allow patients with high out-of-pocket costs a window into what they will be spending. You may want to consider this if you wish to make your practice more accessible to self-pay patients or patients with high deductibles. But don’t make this a race to the bottom, where nobody wins.

Use this data to determine your referral relationships.

Even if you have yet to participate in any alternative payment models, use these tools to ensure you are practicing value-based care. Look up how much your specialist peers cost to ensure that the patients you refer are being seen by the highest value (as measured by the ratio of quality to cost) specialists in your market. Those experimenting with bundled payments will find this crucial, as referring to a high-cost or low-quality specialist could quickly result in spiraling costs to your hospital or practice that could impact your bottom line.

Has your price data been publicly released? What have you done about it? AGA would like to hear from you. Please contact Rebecca Leibowitz, director of accountable care and value-based strategy, at rleibowitz@gastro.org or 301-272-1188.

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1 Price Transparency in Health Care: Report from the HFMA Price Transparency Task Force. Accessed Feb. 19, 2015. Accessed at https://www.hfma.org/WorkArea/DownloadAsset.aspx?id=22279.

2 Bernard TS. High Health Plan Deductibles Weigh Down More Employees. The New York Time. Sept. 1, 2014. Accessed at http://www.nytimes.com/2014/09/02/business/increasingly-high-deductible-health-plans-weigh-down-employees.html?_r=0.

3 Overland D. We could save $184B if consumers pay more attention to costs. Fierce Health Payer. Nov. 24, 2014. Accessed at http://www.fiercehealthpayer.com/story/consumers-should-pay-more-attention-to-high-healthcare-costs/2014-11-24.

4 Rosenthal E. The $2.7 Trillion Medical Bill: Colonoscopies Explain Why U.S. Leads the World in Health Expenditures. The New York Times. June 1, 2013. Accessed at http://www.nytimes.com/2013/06/02/health/colonoscopies-explain-why-us-leads-the-world-in-health-expenditures.html?pagewanted=all.

5 Whoriskey P and Keating D. How a secretive panel uses data that distorts doctors’ pay. The Washington Post. July 20, 2013. Accessed at http://www.washingtonpost.com/business/economy/how-a-secretive-panel-uses-data-that-distorts-doctors-pay/2013/07/20/ee134e3a-eda8-11e2-9008-61e94a7ea20d_story.html.

6 Healthcare Bluebook. Accessed Feb. 19, 2015. https://healthcarebluebook.com/page_ProcedureDetails.aspx?id=72&dataset=MD.

7 Engelberg Center for Healthcare Reform at Brookings. Online Health Care Data Sources. Accessed Feb. 19, 2015. Accessed at http://www.brookings.edu/~/media/research/files/papers/2014/12/01%20health%20data/online%20health%20care%20data%20resources.pdf.

8 Murawski J and Doss Helm A. Blue Cross NC price tool could shake up medical industry. The Charlotte Observer. Feb. 3, 2015. Accessed at http://www.charlotteobserver.com/2015/02/02/5489423/blue-cross-nc-price-tool-could.html#.VN4MyLDF-nB.

9 Hancock J. Will Health Reform Bring New Role, Respect To Primary Care Physicians? Kaiser Health News. July 10, 2014. Accessed at http://kaiserhealthnews.org/news/carefirst-primary-care-costs-specialists-hospitals/.

10 Ghertner D. The problem with health-care cost transparency. CNBC. July 30, 2014. Accessed at http://www.cnbc.com/id/101880007.

11 CMS. Accessed Feb. 19, 2015. https://data.cms.gov/.

12 PriceCheck: A community-created guide to health costs. Accessed Feb. 19, 2015. http://www.scpr.org/price-check.

13 CMS. Medicare Provider Utilization and Payment Data. April 9, 2014. Accessed at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html.

14 BlueCross BlueShield North Carolina. Accessed Feb. 19, 2015. Accessed at http://www.bcbsnc.com/content/providersearch/treatments/index.htm#/.

15 HFMA. Price Transparency in Health Care Report from the HFMA Price Transparency Task Force. 2014. Accessed at https://www.hfma.org/WorkArea/DownloadAsset.aspx?id=22279.

16 MacDonald I. Price transparency: A first step toward true healthcare reform. Fierce Health Finance. Sept. 18, 2014. Accessed at http:\www.fiercehealthfinance.com\story\price-transparency-first-step-toward-true-healthcare-reform\2014-09-18.

17 Lowes R. Medicare's Look-Up Tool for Doc Pay Reveals and Conceals. Medscape. April 29, 2014. Accessed at http://www.medscape.com/viewarticle/824267.

18 Ubel P. How Price Transparency Could End Up Increasing Health-Care Costs. The Atlantic. April 9, 2013. Accessed at http://www.theatlantic.com/health/archive/2013/04/how-price-transparency-could-end-up-increasing-health-care-costs/274534/.

19 California HealthCare Foundation. Value Judgment: Helping Health Care Consumers Use Quality and Cost Information. Accessed Feb. 19, 2015. http://www.ncqa.org/Portals/0/Public%20Policy/CHCF%20ValueJudgmentQualityCostInformation.pdf.

20 Gruman J. Are the benefits of price transparency overstated? KevinMD.com. April 17, 2015. Accessed at http://www.kevinmd.com/blog/2014/04/benefits-price-transparency-overstated.html.

21 Ghertner D. The problem with health-care cost transparency. CNBC. July 30, 2014. Accessed at http://www.cnbc.com/id/101880007.

22 Whaley C et al. Association Between Availability of Health Service Prices and Payments for These Services. JAMA. 2014:312(16). Accessed at http://jama.jamanetwork.com/article.aspx?articleid=1917438.

23 Castlight Health. How U.S. workers search for healthcare. Oct. 7, 2014. Accessed at http://www.castlighthealth.com/how-u-s-workers-search-for-healthcare/.

24 Ubel P. How Price Transparency Could End Up Increasing Health-Care Costs. The Atlantic. April 9, 2013. Accessed at http://www.theatlantic.com/health/archive/2013/04/how-price-transparency-could-end-up-increasing-health-care-costs/274534/.

25 Tu HT and Lauer J. Word of Mouth and Physician Referrals Still Drive Health Care Provider Choice. Center for Studying Health System Change. December 2008. Accessed at http://www.hschange.com/CONTENT/1028/#ib2.

26 Ubel P. How Price Transparency Could End Up Increasing Health-Care Costs. The Atlantic. April 9, 2013. Accessed at http://www.theatlantic.com/health/archive/2013/04/how-price-transparency-could-end-up-increasing-health-care-costs/274534/.

27 Brino A. Who moves first in price transparency, providers or payers? Healthcare Payer News. Oct. 31, 2014. Accessed at http://www.healthcarepayernews.com/content/who-moves-first-price-transparency-providers-or-payers#.VNKEnNLF98F.