Saturday, December 13, 2008

A Step Toward Transparency

Massachusetts is setting a new bar with their website "My HealthCare Options". As reported in the Boston Globe:
"Brigham and Women's Hospital, Massachusetts General Hospital, Children's Hospital, Boston, and a few others are, on average, paid about 15 percent to 60 percent more than their rivals by insurers such as Blue Cross and Blue Shield of Massachusetts and Harvard Pilgrim Health Care. The gap is even more striking for individual procedures, which can be two or three times more expensive in one hospital than in another."
It will be interesting to see if the stark price differential between centers affects where people seek their care. How important will "brand name" become when people are saddled with higher and higher proportion of their direct health care costs?

But what is clear is a precedent for reporting this data is established. As we consider this step, will patients actually use the information? Will it really affect their decision-making or where they seek their care? Will their trust in their doctor take a back seat to price? Will patients, finally seeing what a procedure costs, delay their care or do without entirely?

On first glance, the website seems understandable and easy to use. But to find the actual cost ranges for procedures, the patient has to "drill down" deeply in the site to see the actual cost estimates side by side. Further, the choices of procedures available to view were very limited. I could not find any information of procedures for cardiac electrophysiology, for instance, while angioplasty and open heart surgery were listed. But even with this information, patients will still be unable to decipher their direct out-of-pocket costs, since there are a multitude of insurers and "plans" out there with even more deductibles. This might serve as a deterrent to using this site, since patients still find the billing and payment cycle of today's health care far too confusing as they try to understand what they have to pay.

But this is a step in the right direction, I think. Insurers can use this data to negotiate with hospitals. Hospitals can use this site to compete against the other hospitals in town and display ads that say "The Cheepest Angioplasty in Town!" (As an aside, I wonder if people really want the "cheepest" since it might infer an inferior product. Ah, the joys of being a medical marketer...)

Unfortunately, for patients outside Massachusetts, there's still a long way to go. But I suspect other states will soon be forced to follow Massachusett's lead as the Big Boys in Washington wrestle with our ever-escalating health care costs.


h/t: BNET Healthcare.

Addendum: 11:50 AM CST: Oh, and what about that little problem of doctor professional fees and out-of-network providers? Just because the patient knows the cost of the hospital procedure, these published costs say nothing about the "professional" costs billed separately by the doctor. (See how confusing this is to the patient?) Needless to say, we've still got a long way to go before this mess is simplified.


Anonymous said...

I have had BC/BS PPO insurance for > 15years. This year they printed the service agreement booklets and mailed them; I briefly perused the plan changes, noted the rate increase and figured I'd stay w/ BC/BS. Well, apparently they have now proposed to implement a $7500 deductible for using an out of network surgeon for elective procedures. Since I've used out of network docs on several occasions for procedures and surgery in the past I was not willing to accept this potential change in the plan. Even when I knew the ICD 9 codes and CPT codes for procedures BC/BS would not give me prospective reimbursement rates when I went out of network.
Since there is pretty good likelihood of me needing out of network care again I opted out of BC/BS and chose another insurance co. as did one of my physician colleagues. It is getting way too complicated to keep up with the insurance companies. My MD colleague who did an extensive analysis of several of the insurance plans (thus saving me a lot of work) said that he had a tough time doing comparisons using plans w/ HSAs and high deductibles vs standard plans, he couldn't imagine trying to be elderly and trying to figure this stuff out.

Evan Falchuk said...

I’m glad they’re doing this but unfortunately it highlights the serious limitations on the quality and cost information out there. I spent about a half hour poking around at the site and the various sites it links to, pretending to be a cancer patient trying to decide what to do. There was really nothing at all which would be of much help to me.

Again it is good that this attempt to help is out there, but the execution is so far off that it runs the risk of people being cynical of it and never coming back as it improves. There is a lot of work to do on this.

I enjoy your blog, Dr. Wes.


Dr. Val said...

Hospital quality data has been available in a moderately user-friendly format since 2003 at Memorial Hermann Hospital. They were dismayed to see that very few patients had perused it.

The Surgeon General told me that the average health literacy of Americans is at a 6th grade level. Others have suggested that might be optimistic.

Until this information is displayed in a manner consistent with general health literacy, it will not influence behavior. Of course, it might not influence behavior for other reasons too.