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Defining Value in Healthcare through Price and Cost Transparency

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Presentation by Laura Medford Davis for the Third Annual Policy Prescriptions® Symposium

Laura Medford-Davis is a Robert Wood Johnson clinical scholar at University of Pennsylvania and a practicing emergency physician.

The symposium is designed for clinicians, healthcare workers, and healthcare executives interested in exploring the major themes that will emerge in health policy throughout the year. This year, the symposium will emphasize value in healthcare, health information technology, gun violence, insurance choices, the Affordable Care Act, and the viewpoints of the Presidential candidates on health care.

Published in: Health & Medicine
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Defining Value in Healthcare through Price and Cost Transparency

  1. 1. Defining Value in Healthcare Through Price and Cost Transparency Laura Medford-Davis, MD MS @MedfordDavis
  2. 2. The Following Presenters Have Disclosed Relevant Financial Relationships: Cedric Dark, MD MPH FAAEM FACEP Community Health Choice, Event Sponsorship; Schumacher Clinical Partners, Event Sponsorship Seth Trueger, MD MPH Emergency Physicians Monthly, Employee, Salary The Following Presenters Have Disclosed No Financial Relationships: Megan Douglas, JD Elena M. Marks, JD MPH Laura Medford-Davis, MD Bich-May Nguyen, MD MPH The Following Planners Have Disclosed Relevant Financial Relationships: Cedric Dark, MD MPH FAAEM FACEP Community Health Choice, Event Sponsorship; Schumacher Clinical Partners, Event Sponsorship The Following Planning Committee Members and Staff Have Disclosed No Relevant Financial Relationships: Emily DeVillers, CAE Kay Whalen, MBA CAE Janet Wilson, CAE I have nothing to disclose.
  3. 3. Objectives • Evidence: Benefits of transparency • Policies around transparency • Resources for transparency
  4. 4. Health care biggest source of debt
  5. 5. 1/3 of people with medical debt cannot pay for other basic needs; 2/3 cannot pay other general bills
  6. 6. 2/3 of people who struggle to pay medical bills are insured
  7. 7. High Deductible Health Plans & Out-of-Network
  8. 8. Out-of-Network Bills
  9. 9. Percent of Covered Workers in a Plan That Includes a Deductible, 2006-2015 55% 59% 59% 63% 70% 74% 72% 78% 80% 81% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
  10. 10. Average deductibles >$1,200 for Employer- Sponsored insurance and >$2,900 for Obamacare
  11. 11. Less than 1 in 6 doctors consistently discussing costs with patients
  12. 12. 79% say shopping for health care is difficult, and 67% who tried to negotiate were unsuccessful
  13. 13. Objectives • Evidence: Benefits of transparency • Policies around transparency • Resources for transparency
  14. 14. Evidence is Mixed • Patients informed of MRI costs and options pre-MRI – 18% cost reduction • Employer offered a price transparency tool – Tool used before 6% of claims – Those who used it were more expensive pre-tool – 14% cost reduction • Employer offered a price transparency tool and another did not – 10% of employees used it – $59 price increase
  15. 15. Objectives • Evidence: Benefits of transparency • Policies around transparency • Resources for transparency
  16. 16. Best Practices for Transparency • Estimates tailored to the patient, provider, and insurance plan – Specific prices, not averages, medians, or ranges • Quality information • Real-time availability
  17. 17. Problems with Current Transparency Tools • Episodes not clearly defined – CPT codes • Limited number of services included • Not linked to quality • Hard to keep up-to-date with inflation and contract changes • Skewed by overutilization (and underutilization)
  18. 18. Price and Complication Variation – Medicaid Vaginal Delivery (HCi3)
  19. 19. Barriers to Transparency • Non-disclosure agreements • Price protected under Trade Secrets • Most-Favored Nation clauses • Anti-tiering clauses
  20. 20. HCi3 – State Report Card on Price Transparency Laws
  21. 21. 28 States Have Price Transparency Laws • Allow states to collect information • Require hospitals to disclose to the state • Average charges or chargemasters • Price disclosure upon request
  22. 22. States with Stronger Laws • MA & WA: Insurance companies → Patients • KS: Insurance companies → Providers • CO: public all payer claims database – Hospitals → Patients (average cost)
  23. 23. California: Price, Price change, Quality
  24. 24. Florida Hospital CompareCare
  25. 25. Florida # of Hospitalizations, Charge Range, and Average Length of Stay
  26. 26. Oregon PricePoint: Volume, LOS, Price
  27. 27. New Jersey Price Compare: Volume, Price
  28. 28. Objectives • Evidence: Benefits of transparency • Policies around transparency • Resources for transparency
  29. 29. Dartmouth Atlas of Health Care
  30. 30. Dartmouth Atlas of Health Care $219,591.42 $141,546.80 $119,526.19 $119,299.22 $117,916.27 $102,629.93 $99,255.48 $82,744.36 $77,528.25 $68,835.92 $42,120.81 $0.00 $50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00 1. Los Angeles Community Hospital 37. MD Anderson Cancer Center 97. Brigham & Womens 98. Hospital of the University of Pennsylvania 113. Park Plaza Hospital 266. St Lukes Episcopal 328. Memorial Hermann Medical Center 841. Cleveland Clinic 1093. Scott & White Memorial 1687. Geisinger 2074. Brookings (South Dakota)
  31. 31. Health Care Cost Institute - Guroo.com
  32. 32. Health Care Cost Institute - Guroo.com
  33. 33. Screening Colonoscopy
  34. 34. Screening Colonoscopy
  35. 35. Objectives • Evidence: Benefits of transparency • Policies around transparency • Resources for transparency
  36. 36. Key Takeaways • We have a lack of transparency in the USA • Evidence on the benefits of transparency is mixed • The majority of states have “policies” but most are weak and ineffective • Resources for cost comparisons exist, but most provide averages or insurer-specific information
  37. 37. Questions

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