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Transparency in Health Care: Will Posting Prices Cut Costs?
- 1. Transparency in Healthcare: Will Posting Prices Cut Costs? Laura Medford-Davis, MD, MS Baylor College of Medicine @MedfordDavis
- 2. Agenda • Why do we need transparency? • Evidence for transparency • Current state of transparency
- 3. What we know: Costs vary wildly Dartmouth Atlas
- 4. What we know: Costs vary wildly Dartmouth Atlas And costs are high… and confusing
- 5. Typical ER Bill-Facility Charges Service Quantity Total Charge Level 4 ER Visit 1 $954 Conscious Sedation 1 $22 Ankle XR 2 $586 BMP 1 $199 CBC 1 $133 Coags PT 1 $15 Coags PTT 1 $108 Dilaudid 1mg/ml 4 $12.16 Propofol 10mg/ml 2 $19.20 IV Push 2 $136 TOTAL $2,184.36
- 6. Typical ER Bill-Professional Charges Service Quantity Total Level 4 ER Visit 1 $329 Conscious Sedation 1 $200 Ankle XR 2 $116 Lower Leg Splint 1 $475 TOTAL $1,120
- 7. Typical ER Bill-Costs TOTAL $2,184.36 Medicare - $424.85 Insurance Adjustment - $1,657.12 Patient Responsibility $102.39
- 8. Healthcare spending for a family with average income of $66,570 Premium Contribution $3,100 Out-of-Pocket Costs $1,952 Tax contributions to government health programs $4,664 Foregone Wages $6,482 TOTAL $16,198 Polsky D, Grande D. N Engl J Med 2009;361:437-439.
- 9. Kaiser Family Foundation from AHRQ-MEPS Table 1.1 Out-of-Pocket Spending up 73% 73%
- 10. High-Deductible Plans also increasing SOURCE: KFF 2016 Employer Health Benefits Survey 4% 29%
- 11. Average deductible $1.3K for ESI and $3.1K for individual marketplace plans SOURCE: The Commonwealth Fund
- 12. 1 in 4 Americans report serious financial harm from healthcare costs Healthcare costs caused a serious financial problem • Set up a payment plan with a hospital or physician • Spent all or most of my personal savings • Contacted by bill collectors • Unable to pay for basic necessities like food, heat, or housing • Taken on credit card debt that may be difficult to pay off • Taken out a loan that may be hard to pay back • Declared bankruptcy 44% 26% 42% 39% 27% 23% 19% 7% SOURCE: NPR/Robert Wood Johnson/Harvard School of Public Health poll Patients’ Perspectives on Health Care in the United States, 2015
- 13. SOURCE: Gallup Annual Health and Health Care Poll, 2015 1 in 3 Americans delay needed healthcare due to costs 31%
- 14. Despite this trend, only 30% of doctors regularly discuss costs with patients SOURCE: Medscape Physician Compensation Report 2016
- 15. Shopping for healthcare is difficult, and most patients are unable to negotiate If you tried to shop around for care, how difficult was it to find prices? If you tried to negotiate, were you successful in getting a lower price? NO 67% DIFFICULT 69%
- 16. Agenda • Why do we need transparency? • Evidence for transparency • Current state of transparency
- 17. Medical Economics: Supply and Demand are based on price
- 18. Evidence is weak • It works in other industries – But sometimes it doesn’t • It didn’t work in New Hampshire • It might have worked for MRIs – Spend decreased 18% – Hospital-based MRI price decreased 12%, reducing price variation 30% • <10% of people use price transparency tools that do exist SOURCE: Center for Studying Health System Change Issue Brief, Impact of Health Care Price Transparency on Price Variation: The New Hampshire Experience; Wu et al, Price Transparency for MRIs increased use of less costly providers and triggered provider competition
- 19. Agenda • Why do we need transparency? • Evidence for transparency • Current state of transparency
- 20. Options for price transparency • All-Payer Claims Database (APCD) – Gold standard – Compile payments from all payers – May be posted online or may reside in a state data repository • Mandatory sharing of charge lists – In a central website or on a provider website – Upon request
- 21. SOURCE: HCi3 and Catalyst for Payment Reform July 2016 Report Card on State Price Transparency Laws 7 states have no price transparency laws, but only 7 have robust APCDs
- 22. Gobeille v Liberty Mutual: A threat to price transparency and APCDs • Feb 2016 • States cannot compel self-insured employers to participate in APCDs • Responsibility punted to federal regulations
- 23. Result of price transparency law requiring providers to post prices in OH
- 24. CVS displays Minute Clinic prices online
- 25. Healthcare Blue Book colonoscopy
- 27. Questions
Editor's Notes
- Maybe?
- Maybe?
- Charges vs Costs (Costs to provider, payer, and patient) Ankle Fracture Visit Level 4 It’s complicated (depending on their insurance)
- Charges vs Costs (Costs to provider, payer, and patient) It’s complicated (depending on their insurance)
- Charges vs Costs (Costs to provider, payer, and patient) It’s complicated (depending on their insurance) ~18% uninsured; ~60% privately insured; ~22% public Hospitals: cross-subsidizing
- Median income is only $48,201. This was 2006. 24%
- Out of pocket AFTER premium cost up 73% 1996 to 2009
- High Deductible Health Plan (>$1000) enrollment tripled from 2006 to 2012 (10% to 34%) Average for employer-sponsored deductible plans is now $1,217 in 2014 (“high” deductible=>$1000) More patients will be asking questions about quality and cost where previously they were insulated from the information or from caring
- Anecdote about patients not filling scripts (45y/oF with hemorrhagic stroke; 47y/oM died of pneumonia didn’t fill insulin or levoflox)