Bringing Price Transparency to Healthcare 
Pathways to Leadership Series 
August 26, 2014 
1
Agenda 
•Housekeeping 
•Speaker Introductions 
•Presentation 
•Q&A 
•Conclusion 
2
Speakers 
Bill Kramer 
Executive Director, National Health Policy 
Pacific Business Group on Health 
San Francisco, Calif....
Bill Kramer leads PBGH’s work to advance policy in ways that improve healthcare quality and reduce costs.Bill also serves ...
Bob Shapiro has been CFO since August 2000 and oversees financial affairs, treasury, budget and strategic planning, among ...
Brodie Dychinco is the Vice President of Strategy for HealthSparq, a consumer transparency business of Cambia Health Solut...
The Transparency Imperative 
Who is the Pacific Business Group on Health?
©PBGH 2011 8 
What Purchasers are Looking for: 
a Full Picture of a Provider’s Performance 
Quality + Price = Value 
• Cli...
©PBGH 2011 9 
The Patients’ Perspective 
Patients have 
a fundamental right to know 
about the quality and cost 
of the ca...
©PBGH 2011 10 
Price Transparency 
What it is (or could be): 
• A tool for payers, purchasers (employers) and 
policy-make...
©PBGH 2011 11 
Price Transparency 
Price information should: 
• Reflect negotiated discounts 
• Include all costs associat...
©PBGH 2011 12 
Audience(s) Types of Price Information Needed Example 
Purchasers/ 
Payers 
The total price of individual 
...
Poll Question #1 
Which group do you think is applying the most pressure for price transparency? 
•Payers 
•Patients/Consu...
©PBGH 2011 14 
Using Price Transparency in 
Value-Based Benefit Design 
• Set a payment threshold or 
“reference price” fo...
©PBGH 2013 15 
CalPERS: applying the concept 
to hip/knee replacements 
• Prices varied from $15,000 to $110,000 
(commerc...
©PBGH 2011 16 
Safeway: applying the concept 
to colonoscopies 
• Prices ranged from $887 to $7,245 – an 
8x variation – w...
©PBGH 2011 17 
Range of Prices for Colonoscopies 
Cost Per Procedure – SF Bay Area MSA 
$887 
$916 
$925 
$932 
$965 
$981...
©PBGH 2011 18 
Policies to Advance 
Transparency 
 Prohibit gag clauses 
 Require participation in all-payer 
databases;...
©PBGH 2011 19 
Why providers should start now 
Consumer expectations 
Purchaser expectations 
 High-value providers will ...
About North Shore-LIJ 
•17 facilities 
•4,507 beds 
•673,524 ED visits 
•254,700+ inpatient admissions 
20
$17M 
$150M 
Drivers of Transparency at North Shore-LIJ 
1. New York Public Health Law, passed in 2002 
2. Large Uninsured...
Strategy 1: Call Center 
22 
Created collection agency to reduce costs imposed by third-party agencies 
Segregated 3rd-par...
Strategy 1: Call Center 
23 
Best Practices 
Form unit for patients with financial assistance policy 
Follow script to e...
Strategy 2: Patient Tools 
•Patient Financial Assistance Programs 
•“Understand Your Bill” 
•Make a Payment 
•Hospital Ins...
Spotlight On: Cost Estimator 
Patients care about what they can expect to pay out of pocket. 
The estimates arepresented a...
Why Our Patient Tools Work 
We’ve expanded the call center to handle questions about the price estimator. 
The rundown i...
Next Steps for LIJ 
27 
Address government requirements to post chargemaster 
Competitive Pricing 
Move to complete price ...
Amovementtoempowerconsumerswithinteractivetoolsandinformationsothattheycanchooseprovidersandtreatmentoptionsinamoreinforme...
Affordable care options exist today 
Shoulder arthroscopy 
In Dallas 
$3,000 
to 
$26,000 
In Seattle 
$2,000 to $18,000 
...
50% 
Lower Cost 
Higher Quality Adherence 
No correlation between cost and quality
web- based tools 
Where can we go for answers? 
wellness initiatives 
health assessment 
DM programs
Are we ready for Health-azon?
The information consumers value 
cost 
quality 
convenience 
social
Poll Question #2 
How often do YOU (as a patient) inquire/educate yourself about cost before receiving or seeking medical ...
Shopping tools do work… 
Gallbladder Removal 
Inpatient 
Outpatient 
Surgical 
$19,102 
$11,107 
$6,360 
Cost Estimator us...
… when they are used 
Inpatient 
Outpatient 
Surgical 
$19,102 
$11,107 
$6,360 
Average Cost 
Least expensive 
Most expen...
Proactive campaigns 
Analysis and engagement 
Conveniences 
Take engagement and design to the next level
Q&A 
Bill Kramer 
Executive Director, National Health Policy 
Pacific Business Group on Health 
San Francisco, Calif. 
Rob...
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Sponsored Webinar: Bringing Price Transparency to Healthcare

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More consumers are finally asking for price transparency in healthcare, but most providers are still engrained in the pricing and billing practices they've always used. How can organizations take the lead on providing price transparency that will benefit all the stakeholders in healthcare?

By attending this webinar, you will learn:

Key steps in transitioning healthcare to a more price transparent model
How price transparency reduces the cost of care
The benefits of price transparent organizations

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Sponsored Webinar: Bringing Price Transparency to Healthcare

  1. 1. Bringing Price Transparency to Healthcare Pathways to Leadership Series August 26, 2014 1
  2. 2. Agenda •Housekeeping •Speaker Introductions •Presentation •Q&A •Conclusion 2
  3. 3. Speakers Bill Kramer Executive Director, National Health Policy Pacific Business Group on Health San Francisco, Calif. Robert Shapiro ChiefFinancial Officer North Shore —LIJ Health System Long Island, N.Y. BrodieDychinco Vice President of Strategy HealthSparq Portland, Oregon 3
  4. 4. Bill Kramer leads PBGH’s work to advance policy in ways that improve healthcare quality and reduce costs.Bill also serves as Project Director for the Consumer Purchaser Alliance, and on the National Quality Forum Board of Directors, the National Priorities Partnership, the Measure Applications Partnership Coordinating Committee, and the AQA Alliance Steering Group. Prior to joining PBGH in 2010, Bill led his own consulting practice in which he provided policy analysis and guidance on health reform. Bill was a senior executive with Kaiser Permanente for over 20 years and holds an MBA from the Stanford Graduate School of Business and a Bachelor of Arts from Harvard. Bill Kramer Executive Director, National Health Policy Pacific Business Group on Health 4
  5. 5. Bob Shapiro has been CFO since August 2000 and oversees financial affairs, treasury, budget and strategic planning, among other functions for North Shore —Long Island Jewish Health System. Prior to becoming CFO, he was VP Operations/Assistant Administrator. Bob began his career as a senior accountant with Blue Cross Blue Shield of Greater New York in the 1970s. He is an adjunct professor at Hofstra University in Hempstead, N.Y., where he teaches a graduate-level course in health systems finance. He is also a fellow of the Healthcare Financial Management Association. Robert Shapiro Chief Financial Officer, North Shore-LIJ Health System 5
  6. 6. Brodie Dychinco is the Vice President of Strategy for HealthSparq, a consumer transparency business of Cambia Health Solutions. Mr. Dychinco is particularly interested in helping to make choosing health care providers and treatment options more understandable, enabling consumers to take charge of their health. Mr. Dychinco's efforts were recognized by the Blue Cross and Blue Shield Association in September 2012 with a "Best of Blue" award. His contributions in setting a national transparency standard and roadmap for the Blues, as well as his insight to health plans implementing transparency solutions, earned him the honor of being only the 12threcipient of the Guffey award. Brodie Dychinco Vice President of Strategy, HealthSparq 6
  7. 7. The Transparency Imperative Who is the Pacific Business Group on Health?
  8. 8. ©PBGH 2011 8 What Purchasers are Looking for: a Full Picture of a Provider’s Performance Quality + Price = Value • Clinical outcomes • Patient-reported outcomes and experience • Appropriateness based on guidelines • Total cost of care Requirements: • Willingness to share data • Ability to combine standardized data from different sources
  9. 9. ©PBGH 2011 9 The Patients’ Perspective Patients have a fundamental right to know about the quality and cost of the care they receive.
  10. 10. ©PBGH 2011 10 Price Transparency What it is (or could be): • A tool for payers, purchasers (employers) and policy-makers • (Maybe) – a tool for consumers • A key building block in containing overall health care costs by enhancing healthy competition on price and quality What it isn’t: • Publication of hospital or physician “charges” • The solution to all our problems
  11. 11. ©PBGH 2011 11 Price Transparency Price information should: • Reflect negotiated discounts • Include all costs associated with a service or services • Identify the consumer’s out-of-pocket costs
  12. 12. ©PBGH 2011 12 Audience(s) Types of Price Information Needed Example Purchasers/ Payers The total price of individual tests and procedures Price of a routine colonoscopy for use in reference pricing Purchasers/ Payers The total price of bundled services Price for a joint replacement for use in reference pricing and Centers of Excellence contracting Purchasers/ Payers The total price of care for patients with certain clinical conditions Price of managing a patient with diabetes Consumers, Providers Out-of-pocket price to consumers Price of an office visit, test or procedure Policymakers / Regulators Trends in prices within and across geographies and payer type Bundled price of a spinal surgery Uses of Price Transparency
  13. 13. Poll Question #1 Which group do you think is applying the most pressure for price transparency? •Payers •Patients/Consumers •Advocacy Groups •Government/Policymakers •Providers 13
  14. 14. ©PBGH 2011 14 Using Price Transparency in Value-Based Benefit Design • Set a payment threshold or “reference price” for certain elective procedures • Patient can choose any provider, but pays full amount above reference price
  15. 15. ©PBGH 2013 15 CalPERS: applying the concept to hip/knee replacements • Prices varied from $15,000 to $110,000 (commercial PPO population) • Anthem Blue Cross and CalPERS established a reference price. • Results: • Increased volume of procedures at low-cost hospitals by ~7% • Amount paid per surgery ~26% lower in pilot
  16. 16. ©PBGH 2011 16 Safeway: applying the concept to colonoscopies • Prices ranged from $887 to $7,245 – an 8x variation – with no apparent differences in quality. • Use of reference price encouraged patients to use more efficient providers.
  17. 17. ©PBGH 2011 17 Range of Prices for Colonoscopies Cost Per Procedure – SF Bay Area MSA $887 $916 $925 $932 $965 $981 $1,015 $1,110 $1,169 $1,249 $1,428 $1,463 $1,530 $1,535 $1,642 $1,643 $1,713 $1,721 $1,728 $1,963 $1,994 $2,099 $2,309 $2,320 $2,451 $2,771 $2,816 $2,876 $2,881 $2,987 $3,013 $3,039 $3,049 $3,271 $3,301 $3,318 $3,333 $3,367 $3,647 $3,769 $3,793 $4,518 $4,576 $5,596 $5,682 $5,734 $7,245 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z AA BB CC DD EE FF GG HH II JJ KK LL MM NN OO PP QQ RR SS TT UU Room & Supplies Professional Medications Diagnostics Diagnostic Colonoscopy Providers
  18. 18. ©PBGH 2011 18 Policies to Advance Transparency  Prohibit gag clauses  Require participation in all-payer databases; provide funding  Allow “qualified entities” to sell data and analyses  Standardize measures of cost and quality
  19. 19. ©PBGH 2011 19 Why providers should start now Consumer expectations Purchaser expectations  High-value providers will be the winners – increased volume
  20. 20. About North Shore-LIJ •17 facilities •4,507 beds •673,524 ED visits •254,700+ inpatient admissions 20
  21. 21. $17M $150M Drivers of Transparency at North Shore-LIJ 1. New York Public Health Law, passed in 2002 2. Large Uninsured Population 3. Increased Patient Financial Responsibility 21
  22. 22. Strategy 1: Call Center 22 Created collection agency to reduce costs imposed by third-party agencies Segregated 3rd-party billing and integrated self-pay billing Led to a call center very familiar with the uninsured—an evolution from a collection agency to a help center.
  23. 23. Strategy 1: Call Center 23 Best Practices Form unit for patients with financial assistance policy Follow script to ensure consistent communication, Aggregate functions with regard to payment and billing
  24. 24. Strategy 2: Patient Tools •Patient Financial Assistance Programs •“Understand Your Bill” •Make a Payment •Hospital Insurance Plans •Estimate Your Personal Expense –Calculator •Submit an Insurance Claim 24 Tools on NorthShoreLIJ.com
  25. 25. Spotlight On: Cost Estimator Patients care about what they can expect to pay out of pocket. The estimates arepresented as ranges rather than a single number. Next step: Bundling related procedures often done in tandem 25
  26. 26. Why Our Patient Tools Work We’ve expanded the call center to handle questions about the price estimator. The rundown includes what insurance coverage is expected to pay and what the deductible is expected to be. The financial assistance phone number is available when an estimate is not available via the web-based tool. 26 North Shore-LIJ has received 10,000inquiries about price.
  27. 27. Next Steps for LIJ 27 Address government requirements to post chargemaster Competitive Pricing Move to complete price transparency in 5 years
  28. 28. Amovementtoempowerconsumerswithinteractivetoolsandinformationsothattheycanchooseprovidersandtreatmentoptionsinamoreinformed, convenient,andvalue-drivenway. What is transparency?
  29. 29. Affordable care options exist today Shoulder arthroscopy In Dallas $3,000 to $26,000 In Seattle $2,000 to $18,000 In Boston $4,000 to $22,000
  30. 30. 50% Lower Cost Higher Quality Adherence No correlation between cost and quality
  31. 31. web- based tools Where can we go for answers? wellness initiatives health assessment DM programs
  32. 32. Are we ready for Health-azon?
  33. 33. The information consumers value cost quality convenience social
  34. 34. Poll Question #2 How often do YOU (as a patient) inquire/educate yourself about cost before receiving or seeking medical treatment or care? •Never •Rarely •Sometimes •Often •Every time 34
  35. 35. Shopping tools do work… Gallbladder Removal Inpatient Outpatient Surgical $19,102 $11,107 $6,360 Cost Estimator users choose Non-users choose Average Cost Least expensive Most expensive 41% 55% 10% 70% 20% 4% (2 year period of regional health plan’s claims history)
  36. 36. … when they are used Inpatient Outpatient Surgical $19,102 $11,107 $6,360 Average Cost Least expensive Most expensive $10,319 Average Cost for Cost Estimatorusers $14,195 Average Cost for Non-users Gallbladder Removal (2 year period of regional health plan’s claims history)
  37. 37. Proactive campaigns Analysis and engagement Conveniences Take engagement and design to the next level
  38. 38. Q&A Bill Kramer Executive Director, National Health Policy Pacific Business Group on Health San Francisco, Calif. Robert Shapiro ChiefFinancial Officer North Shore —LIJ Health System Long Island, N.Y. BrodieDychinco Vice President of Strategy HealthSparq Portland, Oregon 39

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