The need for healthcare transparency is in the news.In April of this year, the Archives of Internal Medicine published an article, “The Confusion of Hospital Pricing” by Roni Caryn Rabin. The cost of a routine appendectomy in California supposedly ranged from around $1500 to nearly $183,000. This story was featured on ABC News, which you can find at the link shown here.This story highlights some of the issues around transparency. Those of us that understand insurance claims know at least the $1500 amount is wrong – unless the patient had the procedure at home without anesthesia. But we can all agree there is a problem here.
Humana, Anthem and UHC have had a transparency tools available for the last few years. Are any of these companies promoting cost savings associated with these tools?
But in the right format, transparency DOES work!Serigraph working with AFG; Manitowoc Co. working with M3Why haven’t the brokers successfully replicated this success?
Let’s be honest – it’s easier to sell discounts than a program that requires actual behavior change.Here’s the problem:
Which provider is offering the best discount?3 years ago broker’s were comparing UHC’s 30% average discount to Anthem’s 28%. Today these average discounts are what? 38% – 42%? So this is why the cost of healthcare has dropped 10% over the last 3 years…
Here’s some Alithias client data looking at Colonoscopy episodes, with the prices ranging from around $1800 to $3700.Which provider offers the best discount?Most transparency tools don’t track utilization, but if you don’t know where the employees are going, how do you know they’re getting the best price?If you don’t try to manage steerage, discounts don’t matter!
Kaiser Foundation study: Some patients were “insulted” when asked if they should consider cost when making healthcare decisions.An employee was asked, “What is the biggest problem with consumer driven healthcare today; ignorance or apathy?” The employee answered, “I don’t know and I don’t care.”So why doesn’t transparency work? Because it’s only part of the answer.
If you are asked about transparency tools, or want to sell them, there are 8 “must haves” in order for the tools to be most effective.
Today’s presentation is really about the broker’s role in transparency – Why it matters, what quality means to transparency, how to get employees engaged, setting expectations and measuring performance, recommending the right tool for your client, and the importance of choosing the right ASO.
This is why everyone is talking about transparency today.
400% increase in HDHP plan participation
Employers are trying to bend the healthcare cost curve by putting more responsibility on the employee.
Typically seen in the form of HDHP’s, increased co-insurance, and increases in out of pocket maximums.We know from the Rand study that just showing costs won’t change behavior. But the corollary is that without transparency, HDHPs won’t change behavior. If an employer expects their HDHP to change employee behavior, they should couple it with a transparency solution. But not all solutions are the same.
The tools look at things differently.Some just show the technical component, others just the retail amounts.“If you aren’t controlling the diabetes, the cost of the amputation doesn’t matter.”
Here is an Alithias report that highlights the importance of considering an episode of care, i.e., all the potential associated claims – as opposed to just the actual procedural component. Again, looking at a Colonoscopy with Biopsy – 3 different episodes, ranging from $1400 - $3100. If the transparency tool doesn’t consider anesthesia, pathology, and labwork – the estimated cost won’t be accurate.
Some tools use projected data at the zip level, which often isn’t accurate enough to make a difference.I’ve had many conversations with Jerry Frye at BSG about which procedures to display and how to display them. “If you aren’t controlling the diabetes, the cost of the amputation doesn’t matter.” My argument is that the tool should show both the chronic and acute Tx costs, so we’re starting to work together to figure this out.
Just a few comments about quality information. A good transparency tool should have some quality information. The issue is that according to a UC Berkeley study, patients currently don’t use quality information to make healthcare decisions.
We happen to have a number of very good health systems in WI, so perhaps the quality differences aren’t sufficient to get people concerned. But what is “quality” anyway? Hospitals = Adherence to protocols | Patients = outcomes.Beware user generated content.When everything is important, nothing is important. I love my Dr – He is always testing me, checking on my weight and and asking me to stop smoking. He really cares.I hate my Dr. He is always testing me, asking me to lose weight and stop smoking.
Perhaps the most important factor in any transparency initiative is getting the C-suite behind the programYou may want to do a communication audit at the time of open enrollment to see what communication medium resonates with employees. We believe that 7 – 9 annual exposures are required to change behavior, so we have designed a communication plan with that number in mind“Everything should be designed to be as simple as possible, but no simpler.” EinsteinWhat to expect: Direct correlation between utilization and incentives. $50 sign up = 67% engagement. 3% after 6 months, 11% after 18 months (Manitowoc Co.) 5% - 25% engagement; 5% - 15% cost savings.
The ability to customize the tool will help engagement. On the Alithias site, HR administrators can create active or static announcements on the fly.
We have also added some “gamification” features to keep people interested.“Everything should be designed to be as simple as possible, but no simpler.” EinsteinWhat to expect: Direct correlation between utilization and incentives. $50 sign up = 67% engagement. 3% after 6 months, 11% after 18 months (Manitowoc Co.) 5% - 25% engagement; 5% - 15% cost savings.
HR administrators can easily track user points to help manage the program and support awards.
Example report summary
Rebates are another option.
Easy for administrators – just click on the “set rebates” tab
Then input the rebates at the locations they want, hit submit, and
Users see the rebates associated with the location on the site. If the rebate option is not taken, this column is hidden to users.
Interestingly, about 50% of our client’s employees either don’t have regular access to computers or the internet at home. As much as I’d like this to be an internet only tool, some people want to “talk to a human.” Prairie States can provide this option through the nurses in their 5 Star program.What to expect: Direct correlation between utilization and incentives. $50 sign up = 67% engagement. 21% after 18 months (Manitowoc Co.) 5% - 25% engagement; 5% - 15% cost savings.
So - this should save millions, right? No – but it’s a great start.
We have created a “what if” tool in our software that allows clients to look at a given procedure, view utilization, and then calculate the potential savings with steerage.
In this example, this client would have saved $29K if they were able to get 100% steerage to the Sheboygan Surgery Center OR just pay a flat amount of about $2600 for the procedure.
My point is that the broker should work with the client to set expectations. No one’s checking the website if they’re having a heart attack! But if you focus on communicating the potential savings for a few common procedures and have the reporting tools to track performance, you have a much better chance of a successful program.
There are a number of tools available, each with different features, so I will quickly share what to look for when choosing a transparency solution
Nearly any free service available on the internet
The ASO has an important role in any transparency solution. Primarily because they need to understand 3 things:The local healthcare and geographic market. When an employee calls for prior authorization, an engaged ASO will understand and empathize with patient needs.The ASO must understand the client needs and multiple plan designs and have the flexibility to accommodate client nuances.Prairie States has nurses answering the 5 Star phones to ensure that if a patient starts asking deeper questions, a correct answer is provided during the call. An educated advocate helps patients understand what they are going in for and may uncover information that could support a better patient outcome.Lastly, the ASO’s objectives should align with the employer.
So when discussing transparency with your clients, it’s important that you:
The Prairie States / Alithias partnership provides one of the best transparency solutions available, and you can feel confident offering this solution to your clients.
The Broker's Role in Making Healthcare Transparency Work
360° Engagement The Brokers Role in Making Healthcare Transparency WorkConfidential
The Problem http://abcnews.go.com/WNT/video/healthcare- cost-shock-23000-appendectomy- 16198878#.T5bd9USe8OQ.email Confidential
The Problem “The lack of transparency and competitive pricing is responsible for between $84B and $174B in wasteful spending.” Don Berwick, former head of CMS “The lack of transparency costs Americans $36B annually.” Thomson Reuters, Transparency Whitepaper, January, 2012 Confidential
The Problem Transparency alone doesn’t work! “Our view is that in their current form and absent any financial incentives, publicly reporting of cost measures is unlikely to lead to the hoped for consumer response.” Ateev Mehrotra, MD, MPH University of Pittsburgh School of Medicine RAND Health Consumers and Providers’ Responses to Public Cost Rreports, and How to Raise the Likelihood of Achieving Desired Results, Abstract Article, 2012. http://www.ncbi.nlm.nih.gov/pubmed/22459922 Confidential
But Transparency DOES work! Serigraph – Paper based, rebate driven Annual insurance premium increase <1/2 national average over 7 years No increase in 2012 Benefits plan consistently ranked as one of the “best things about the company” in employee surveys Manitowoc County (@ 400 employees) – Rebate driven 15 users in first 6 months 45 users within 18 months Documented 1st year savings >$180,000 (Bob Confidential Ziegelbauer, Co. Executive)
Why the Limited Success? Selling discounts is easier than selling value Confidential
Which Provider Has the Best Discount? $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 High $1,500 Low $1,000 Median $500 $0 Confidential
Which Provider Has the Best Discount?If You Don‟tKnowUtilization, DiscountsDon‟t Matter! If You Don‟t Manage Steerage, Discou nts Don‟t Matter! Data for demonstration only Confidential
Why the Limited Success? Selling discounts is easier than selling value Employees are not engaged in their healthcare decisions Consumers have had little incentive to shop for care Few good transparency tools are available Changing behavior is difficult Confidential
What’s Needed Transparency is just part of the answer 1. Motivated client 2. Consumer oriented plan design 3. Simple tools 4. Customized to client 5. Integrated incentive programs 6. Ongoing communication program 7. Multiple employee contact points and options 8. Engaged and knowledgeable ASO Confidential
Presentation Outline I. Why Transparency Matters II. Defining Transparency III. Does Quality Information Matter? IV. Rules of Engagement V. Measuring Performance VI. Selecting the Right Tool– The Good, The Bad and The Ugly VII. Why the ASO Matters VIII. 360° Engagement – Role of the Broker Confidential
Why Transparency Matters Payors understand that cost transparency is required to support free market healthcare Employers are shifting accountability and responsibility toward the consumer in the form of HDHPs Confidential
Why Transparency Matters The market is at an inflection point for “funders” and consumers of healthcare. Confidential
Plan Design Matters HDHPs Co-insurance Out of pocket maximums “Absent incentives… publishing cost information is unlikely to change behavior.” “Absent transparency… HDHPs are unlikely to change behavior.” Confidential
Defining Transparency Allowed vs. Billed (retail) amounts Includes technical (facility) and professional (MD) components Episode of care vs. the surgical procedure Confidential
Cost Variability / Claim Variability Confidential Data for demonstration only
Defining Transparency Allowed vs. Billed (retail) amounts Includes technical (facility) and professional (MD) components Episode of care vs. the surgical procedure Location level detail Actual vs. projected Actual location vs. Zip code Chronic and acute conditions Confidential
Quality Consumer reports in health care: do they make a difference?Schauffler HH, Mordavsky JK.SourceCenter for Health and Public Policy Studies, School of Public Health, University of California, Berkeley, California 94720-7360, USA. email@example.com “Quality „Reports‟ don‟t change behavior” Confidential
Quality More expensive must be better! Lack of Trust Who defines quality? Sources? Important vs. unimportant measures Hospital, Group or Provider level detail Confidential
Quality Screens(Data fromWHIO, WHA, HHS, WCHQ, Vitals.com, Providers) Confidential Data for Demonstration Purposes Only
Group Affiliation Data for Demonstration Purposes Only
In Network MD Names.Group Quality Ratings. Data for Demonstration Purposes Only
Additional Quality Information Board Certification Patient RatingsPatientComments Average Wait Time Confidential
Patient Ratings“Based on 5Ratings”You Get WhatYou Pay For Confidential
Rules of Engagement C Suite Commitment Communication Audit Do employees have access to computers? The internet? Email culture? Mailbox culture? Water cooler culture? Intranet site? Company newsletter? How do you get people to give to the United Way? Customization Confidential
Rules of Engagement C Suite Commitment Communication Audit Do employees have access to computers? The internet? Email culture? Mailbox culture? Water cooler culture? Intranet site? Company newsletter? How do you get people to give to the United Way? Customization Gamification Confidential
Points Reporting Set Date Rang Monthly Quarterly AnnuallyConfidential
Easy to Administer Export as needed Custom Business Rules for PointsConfidential
Rules of Engagement C Suite Commitment Communication Audit Do employees have access to computers? The internet? Email culture? Mailbox culture? Water cooler culture? Intranet site? Company newsletter? Gamification Rebates Confidential
Setting RebatesConfidential Data for demonstration only
Custom Rebates Set By Location Set Different AmountsConfidential Data for demonstration only
What User’s See Confidential Data for demonstration only
Rules of Engagement C Suite Commitment Communication Audit Do employees have access to computers? The internet? Email culture? Mailbox culture? Water cooler culture? Intranet site? Company newsletter? Gamification Rebates Phone support What to expect Confidential
Colonoscopy Differences by FacilityLikely Charges calculated on total book of business Data for demonstration onlyConfidential
Potential Savings with Steerage Data for demonstration onlyConfidential
Measuring Performance Setting Expectations Discretionary vs. Non-discretionary decisions What are you measuring? How are you measuring it? Does the transparency tool provide reports? Communicating results Confidential
Selecting the Right Tool The Good Use actual claim history Incorporate plan design at employee level Provide network level detail Have integrated engagement tools Linked to quality information Multiple employee engagement options Reporting tools to measure performance Customized for the client Knowledgeable ASO partner Simple / intuitive Confidential
Selecting the Right Tool The Bad Regional data Procedures vs. Episodes Ignores common ancillary costs (path, lab, handling) Requires clairvoyant users Intimidating - TMI Not linked to plan design or network Subjective “ratings” with unknown metrics Difficult to track / measure performance Wait for information Little quality information Confidential
Selecting the Right Tool The Ugly Retail prices Show only technical / facility component Minimal or subjective quality information Heavy reliance on user ratings Suggests exact costs are known Heavy reliance on user ratings Require users personal information Expensive Too simple? Confidential
Importance of the ASO All healthcare is local Client needs Flexibility Nurse advocates vs. $15 / hr staff Do ASO objectives align with your clients? Confidential
360° Engagement Role of the Broker Identify the right client Offer consumer oriented plan designs Select a knowledgeable ASO Choose the right transparency tool Set expectations Identify the right metrics Support or provide a communication plan Track and report performance Confidential
The Result Our partnership with Prairie States provides unique combination of information, analytics and incentives engages employees in their healthcare decisions and supports consumer driven behavior that results in cost savings. Reduction in healthcare costs of 5% - 15% Maximizes the value of the healthcare benefit Engaged employees with better visibility to healthcare cost drivers. Immediate value to clientsConfidential
Thank You Contact: Ross Bjella 414 469 9265Confidential Ross@alithias.com