For years now, we’ve heard that healthcare transparency is the wave of the future—the thing that would transform the healthcare industry, the end-all-be-all of healthcare consumerism. True to the prediction, in recent months, state legislatures (like those in Florida and Connecticut) have begun floating transparency laws to help consumers know the cost of treatment before they receive it. Back in January 2015, Blue Cross Blue Shield of North Carolina made its prices public by facility for many common procedures. And according to the PwC Health Research Institute’s “Top health industry issues of 2016,” transparency made the list of top 10 concerns for the coming year.
While healthcare transparency has struggled to take hold, I’m not ready to declare it dead. In fact, I think healthcare transparency remains the wave of the future if we can overcome a few barriers.
Defining cost and quality
The traditional equation of healthcare transparency was simple: offer information about cost and quality so members can make informed choices.
However, contractual agreements between payers and providers often limit how much information about the price of medications, procedures, or facilities can be revealed. Therefore, some payers release data that reflects regional average costs for a procedure—not specifics. Also, some databases still rely heavily on government plan data, like Medicare.
Quality poses a greater challenge still. How is quality defined? Is it about the effectiveness of treatments? The outcomes of providers? Is quality relative to the amount spent (like a measure of ROI) or is it independent of cost? And, above all, how do we show quality in a way everyday members with no medical training will understand?
While the traditional equation sounds logical, maybe it no longer makes sense in our evolving industry.
Instead of looking at cost and quality as separate indicators, what if transparency revolved around the nexus of the two: value.
Focus on cost, not value
In October 2015, the National Bureau of Economic Research released a study exploring how members of a large self-insured group changed their spending behavior when they moved to a high-deductible plan. Unfortunately, they didn’t start shopping around for lower-cost services and providers. Instead, they simply reduced their utilization—even for preventive care services.
Based on the data, the group did lower their costs. But did they maintain or increase their value? For transparency to take hold, we need to shift the conversation from cost to value. And the first step toward increasing the value of healthcare is presenting cost and quality data in context for members.
Lack of context
Cost and quality data mean little without connecting them to a member’s benefits plan. Since transparency data often is presented through a separate tool in some dark corner of the portal, members don’t have the context to help them understand the true impact of their choices on out-of-pocket costs.
For transparency to take hold, we need to present cost and quality data, like a provider’s quality scores and true out-of-pocket costs, in simple language alongside a member’s benefits.
Even better, let’s make it easy for members to take action on the data they see. See a provider you like? Click to schedule an appointment. Find a lower-cost way to fill your prescription? Click to switch.
At its core, the transparency equation still stands: consumers need to know about cost and quality to make informed decisions. But only when we help them see the link between costs and quality, benefits and behavior, will transparency move into its transformational role in our industry.
Chuck Rolfsen is Chief Revenue Officer for Healthx. He helps Medicaid health plans, commercial health plans, and other Healthx clients develop strategies to streamline administrative processes and improve the quality of care.