Louisville Medicine Volume 65, Issue 11 - Page 7

From the PRESIDENT Robert A. Zaring, MD, MMM GLMS President | rob.zaring@glms.org TAKE A CLOSER LOOK At Your Pricing I n late 2017, a national organization known as The Healthcare Executive Group released a list of the Top 10 issues facing health care in 2018. Among them is the difficulty of creating cost, or price transparency, for medical services. Lawmak- ers, doctors and patients all have a big stake in access to this information. This should surprise no one given the cost of the US health care system, which currently exceeds 3 trillion dollars and represents 17 percent of the GDP. We expect that these costs will continue to grow at an average rate of 5.8 percent per year through 2025. Therefore, lawmakers are looking at different ways to lower costs; it is difficult to be a thrifty shop- per when you don’t know the price or you’re not paying the bill. How ever, one aspect of this conundrum has changed. Consumers are paying more of the bill by themselves with out-of-pocket costs reaching record levels in 2016 at $352 billion. The cause of this greater financial customer participation is the growing use of high deductible health care plans. In 2016, 51 percent of health care consumers with single coverage faced deductibles of at least $1,000. Physicians and hospitals are now start- ing to hear the demand for greater transpar- ency on pricing from the public. In a world where charges often have little connection to reimbursements collected by a provider, this can be exceedingly challenging. This can be even more exasperating when you consider the various negotiated rates insurance com- panies have with providers and the myriad of insurance terms which patients don’t fully understand such as copays, co-insurance, and deductibles. Regardless, lawmakers have taken some steps to increase price transparency. Some states have developed laws requiring medical price transparency, but have faced bitter enmity from provider organizations who see the information as proprietary. Many states have tried to solve the problem by creating All-Payer Claims Databases which collect data from multiple sources. These databases have had varying impact and only those backed by strong laws and good websites have been success- ful. The Catalyst for Payment Reform and Healthcare Incentives Improvement Insti- tute looked at various states to determine if the state had effective or non-effective price transparency initiatives. Forty-three states received a “F” with only Maine, New Hamp- shire and Colorado receiving an “A”. This analysis was disheartening for many price transparency advocates, but has spurred more states into looking more carefully at the subject. Patients’ attitudes to medical price trans- parency are interesting and reveal valuable information for physicians and hospitals who must confront the problem. A survey by Accenture Consulting found 91 percent of patients want to know their out-of-pocket cost upfront and almost half would consider going to another provider to get that infor- mation. Even though studies have shown shopping for price saves on average 10-17 percent for services, only 11 percent say they want the information for that. The majority of patients want the information for budgeting. Both insured and uninsured patients remarked on having great concerns regarding their ability to pay out-of-pocket costs, and a growing number are seeking the pricing information with or without the help of their provider. This has not necessarily resulted in greater shopping but often has resulted in patients opting not to have the service. Those that have the information and decide to have the service have been shown to be far more likely to pay their bills. As mentioned, shopping even with the information is limited, but those that do shop focus on services such as dental and vision and much less on things like surgery or chronic care. Patients have also shown that when they do shop they do not just look for the lowest cost but what they view as the highest value. Things such as brand name, viewed quality, friend recommendations as well as physician referrals would seem to have a much greater impact on patient de- cision making. It has been shown that some consumers using health care cost calculators have chosen the most expensive providers believing the more expensive provider will have better quality. Numerous tools from health insurance companies and stand-alone applications are available to patients to help evaluate price. The large health insurance compa- nies all seem to have pricing comparative (continued on page 7) APRIL 2018 5