Analysis: More transparency (especially for employers & docs) could save healthcare $100B

Although the need for healthcare price transparency for consumers seems to get the most attention, cost information will likely have a bigger financial impact when it’s made accessible to other stakeholders, like clinicians and employers. So says a new analysis from the Gary and Mary West Health Policy Center in Washington, D.C. Written by researchers […]

Although the need for healthcare price transparency for consumers seems to get the most attention, cost information will likely have a bigger financial impact when it’s made accessible to other stakeholders, like clinicians and employers.

So says a new analysis from the Gary and Mary West Health Policy Center in Washington, D.C. Written by researchers at the former Center for Studying Health System Change, the analysis underscores the importance of new health plan designs, revised payment models and transparency with quality data in driving cultural change toward a more rational healthcare system.

The report recommends three policy considerations that the researchers estimate could result in $100 billion in savings over 10 years.

1. Require private health plans to provide personalized out-of-pocket expense information to members

One study last year found that 98 percent of health plans say they offer cost calculator tools, but only 2 percent of members use them. Part of that might be because those tools are limited by a lack of access to key pieces of supplemental information, like outcomes data for specific providers. And although some states like New Hampshire also provide price transparency tools, they aren’t integrated with health plans so they can’t truly be personalized. This initiative would have the most modest impact on overall healthcare costs, but the Center’s analysis calls for corporate, state or national policies requiring health plans to offer provider-, patient- and service-specific cost comparison tools.

2. Create all-payer health claims databases where plans report hospital prices

Agencies in each state would collect claims data in a standardized format from all private carriers, as they do in Massachusetts, New Hampshire, Maine and Rhode Island. Employers would be able to use that data to narrow their provider networks and build tiered benefits. One challenge with this idea is that right now different carriers use different tools, said Josephine Porter, deputy director of the University of New Hampshire’s Institute for Health Policy, at a press conference today. “There’s a real hunger for standardized tools that would allow for consistent reporting at the state level,” she said.

3. Require electronic health record systems to show prices to physicians when they order diagnostic tests

A recent Johns Hopkins Hospital study found that when standard fees were displayed to physicians, they ordered fewer tests. The reasoning is that if clinicians know the cost of the service they’re ordering up front, they’ll be able to work with patients to determine the relative value of tests or treatments. The Center calls for this to be addressed in stage III meaningful use and for EHR vendors to build this capability into their offerings.

[Image credit: West Health]