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Healthcare leaders to Senate finance committee: “Transparency can only go so far”

June 18, 2013 2:55 pm by | 0 Comments

committee hearing transparency

“CMS is sitting on so much data; it’s a goldmine,” said Giovanni Colella, CEO and co-founder of Castlight Health, before the U.S. Senate Committee on Finance on Tuesday. “Making that data accessible will help everyone better understand quality of care and cost of care.”

But data alone won’t drive down healthcare costs. Colella joined TIME contributing editor Steven Brill and two other healthcare transparency leaders in testifying before the committee on high prices and low transparency in healthcare.

“Transparency can only go so far” in solving the real cost problems, Brill said. Even if patients know what their providers will charge for certain drugs or procedures, and even if they know how much those drugs and procedures actually cost the providers, what can they do about the fact that that price is still too expensive? “While transparency starts the conversation about prices [...] it’s only a start,” Brill said.

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So while measures like CMS releasing chargemaster data have gotten the ball rolling, it will take more than just pushing out data to effect change in the system.

Dr. Paul Ginsburg, president of the Center for Studying Health System Change, proposed that most of the policy efforts put forth so far have focused on transparency for transparency’s sake. Because of the current structure of most insurance plans, the average consumer is indifferent to the cost of the provider he visits, he said, since he will likely pay a set co-pay and will never see the true cost of that provider. Ultimately, lower healthcare prices will come through changes in benefit design, Ginsburg said, even if that means data is less transparent to consumers.

Rather than making price data publicly available to consumers, Ginsburg suggested that purchasers and health plans should analyze the complex data on costs and quality and design benefits that incentivize consumers to choose higher quality and lower cost providers.

“This information has to be customized to consumers, it has to reflect the details of their particular health plan, and I think insurers and employers are best positioned to do that,” Ginsburg said.

This is the kind of approach has taken shape in the tiered network designs being used by several insurers in Massachusetts. Under this system, some insurers assign providers to tiers based on quality and cost measures. They incentivize members to go to a higher quality, lower cost provider.

Another approach referenced by Dr. Suzanne Delbanco, executive director of Catalyst for Payment Reform, was reference-based pricing. Under this design, payers set the price of a particular service, and if a patient receives that service at a higher cost, he must pay the additional costs. This approach is being used in hip and knee surgeries by the California Public Employees’ Retirement System.

Delbanco underscored the importance of both quality and cost data in guiding such plan design. “One of today’s biggest shortcomings is the separation of price and quality information,” she said.

She proposed that quality measures by which providers are evaluated should be the ones where there is the greatest disparity among providers, not just the ones that are easiest to report or are least offensive to providers.  “I think we have probably too many (quality metrics) now and not enough that focus on exactly those points where there’s the greatest opportunity for reducing harm and where there’s the greatest variation in performance,” she said. “We tend to measure things that are easy to collect data on and that show very little difference between providers.”

The full hearing is available online here.

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Deanna Pogorelc

By Deanna Pogorelc MedCity News

Deanna Pogorelc is a Cleveland-based reporter who writes obsessively about life science startups across the country, looking to technology transfer offices, startup incubators and investment funds to see what’s next in healthcare. She has a bachelor’s degree in journalism from Ball State University and previously covered business and education for a northeast Indiana newspaper.
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