As the new consumer increasingly pays for more of his healthcare expenses, he will shop for quality and price when possible. This means that prices for services and procedures need to be transparent for the consumer. As seen in Chapter 4, one reason the retail clinics are popular is because the prices are posted and the consumer knows what he has to pay for the visit in advance. This chapter is about providers who need to pay attention to quality transparency and the resources that are available to consumers.
When Docs Did Docs
Back in the 1970s, physicians were in charge of ensuring that physicians were behaving appropriately when it came to hospital utilization. It was proclaimed and accepted that only physicians could know and assess the work of other physicians; therefore, only physicians could review other physicians’ quality. This was the time period before the proliferation of managed care.
To contain healthcare costs, Congress created review organizations across the nation in 1972 to monitor the medical necessity and appropriateness of hospital admissions and lengths of stay of its patients covered by Medicare, Medicaid, and Maternal Child Health. The Department of Health and Human Services was responsible for paying their bills. The General Accounting Office (GAO) said, “PSROs are groups of local practicing physicians who organize and operate peer review mechanisms to assure that healthcare services provided under three federal healthcare programs—Medicare, Medicaid and Maternal and Child Health—conform to appropriate standards and are delivered efficiently, effectively and economically.”
Professional Standards Review Organizations (PSROs) had the responsibility of pre-authorizing elective procedures, performing random concurrent reviews of hospitalized patients, and conducting post-discharge reviews. All of these review data were captured on paper and manually keyed into a local database that updated a national database from all the PSROs. During this time period, concerns centered around the need for admitting patients into the hospital, performing a procedure as an inpatient vs. outpatient, appropriateness of a procedure relevant to the diagnosis, complications, and long hospital lengths of stay.
PSROs also analyzed the data in their region to determine if there were any outliers in terms of treatments when looking at the aggregate data.
True Story
In one California PSRO, it was the responsibility of the physicians of the Data Committee to review specific physicians whose data fell outside of the normal ranges for length of stay, complications, procedures, and other indicators of quality. Most of the questions about a physician’s practice were explained by the committee as acceptable fluctuations and did not indicate a serious issue. If the committee felt that further investigation was necessary, one of the committee members would call the physician and talk to them about what they were seeing as a pattern. Once in a while, they would be surprised. One OB/ Gyn showed a high volume of hysterectomies. While that alone was not a problem, but there were a higher than usual number of younger childbearing aged women who had the procedure. That was unusual. After discussing the procedures with the OB, the PSRO’s reviewing physician discovered that the OB doctor was from India and it was common practice to treat chronic pelvic pain with a hysterectomy if the woman had borne children. She was counseled by other doctors and monitored.
This is an example of how doctors used to cautiously control themselves. The PSROs no longer exist due to politics, but there is growing information about physician and hospital quality available online to the consumer.
Healthcare Industry Is a Dark and Opaque Place
Shoppers want to know prices—it is critical input to know how much something costs in order to compare. Without prices, there is no shopping—only buying in the dark. In healthcare, comparisons are more difficult because if a consumer asks the price of a procedure, the answer may often be that they don’t know.
The lack of transparency in the healthcare industry frustrates consumers, employers, and government payers. Consumers have been in the dark about the cost of medical services from providers and facilities. The rise in high deductible plans makes detailed prices from hospitals, doctors, and insurers important for consumers who want to shop for services and get good value while ensuring quality.
As an example of the lack of transparency, 45 states received a failing grade in an annual report card1 that measures how much access patients have to actual prices for medical care. Obviously, there is a long way to go in nearly all the states.
California published a website, www.cahealthcarecompare.org, in September 2015 that provides cost and quality information in one place on 100 procedures. The site provides the range of prices paid by the insurer, which is considered more useful than the price charged since insurers only pay a fraction of the billed charges. For 100 procedures and conditions, it lists:
average price by geographic region
average out-of-pocket paid by the patient
individual hospital quality ratings for the procedures on a 1 to 5 scale
detailed cost estimates for a specific insurer (accessible by health plan members only)
There are many facts that play into a consumer’s decision in selecting a physician or hospital. These may include:
Financial relationship with pharmaceutical companies or medical device manufacturers
Physician outcome measures (complication rate, mortality rate)
Hospital ratings
Volume of a specific procedure
Social media reviews
Location
There are many sources for finding this information, but the consumer must often diligently dig for data on the Internet. Some information has limitations based on the data source, but consumers who want to know more before making a decision on the best doctor or hospital for their treatment will likely find some information more helpful than none.
Some states such as Massachusetts mandate that health insurers publicize their prices, and they are listed on the state’s website for consumer affairs. Online tools allow the consumer to calculate their cost based on their health plan. Even with the calculator, the shopper needs to read the fine print on what is included in the list price.
For consumers who don’t live in states with mandatory public pricing, more help is on the way in the form of businesses that give shoppers the ability to check prices in advance. Clearhealthcosts.com, a nonprofit initiative in partnership with public radio stations, makes it easy to compare prices in certain healthcare markets. That website shows, for example, that the cash price for a lower-back MRI without contrast in the San Francisco area ranges from $260 to more than $10,000. It also lists the price that Medicare pays for the procedure. The consumer knows the lowest and highest cost for the procedure in her geographical area and is now an informed shopper who can choose a provider with the right price for her budget and check for quality information.
Clearhealthcosts.com started out focusing on four procedures—mammograms, lower-back MRIs, intrauterine devices (IUDs), and diabetes test strips—but they allow reporting on any procedure and display prices for Medicare, private insurance patients, and self-pay patients.
Clearhealthcosts.com “crowdsources” prices by asking consumers to use their medical bills and insurance explanations of benefits to report what they have paid for various services. Major philanthropies are getting behind this concept. In 2014, the John S. and James L. Knight Foundation provided grant funding to get the initiative started in California; this year, the Robert Wood Johnson Foundation is funding the rollout in Philadelphia. They are currently in seven major metropolitan areas (New York, Los Angeles, San Francisco, Dallas-Fort Worth, Houston, San Antonio, Austin).
Another example of businesses offering price transparency is Castlight Health, which draws on historical claims data and details of an individual’s insurance benefits and deductible status to provide estimated cost information. It can be customized to an employer’s plan so it knows where an employee is on his deductible and it can advise how much a service is going to cost overall and how much the employee will need to pay.
Healthcare Bluebook is another new business breaking the barriers to transparency along with quality. Geared toward consumers, employers, and providers, Bluebook shows a range of prices and calculates a reasonable price based on location for medical services. Prices are available for various procedures at imaging centers, ambulatory surgery centers, sleep centers, as well as for physicians and hospitals.
Guroo is a website where consumers can find information about the cost of procedures and conditions in a specific geographic area. The data are from Health Care Cost Institute (HCCI) and based on over 40 million people between the ages of 18 and 64 whose health insurance is provided by employers. Quality information is on doctors and hospitals, but does not include labs, imaging, or other stand-alone facilities. A consumer searching on prices for MRI will not find a quality rating associated with the independent facility. That leaves the consumer making a choice on cost without a clear indication of the quality.
Price Transparency
Price transparency is key for both consumer satisfaction and keeping the cost of healthcare down.
A Public Agenda national survey2 of 2,010 adults sponsored by the Robert Wood Johnson Foundation in 2014 found that 56 percent sought out price information and 21 percent compared prices across providers. People with higher deductibles, women, and people with a college degree are more likely than other Americans to have sought price information. Sixty-seven percent of those with deductibles of $500 to $3,000 and 74 percent of those with deductibles higher than $3,000 have tried to find price information before getting care. Fifty-nine percent of women and 62 percent of respondents with college degrees report having tried to find price information. Contrary to the concern that people would be unwilling to choose lower-priced care, fearing that it would be lower quality, the survey suggests most Americans do not necessarily equate cost with quality. Seventy-one percent say they do not think higher prices indicate better quality care and 63 percent do not think lower prices are typically a sign of lower quality care.
Transparency is likely to increase as the Centers for Medicare and Medicaid Services (CMS) are working to create fixed price packages of care for its beneficiaries. The model is intended to incentivize high-quality, well-coordinated, and efficient care over the full episode of care. For example, Medicare recently announced the mandatory bundled payment model for knee replacement and hip replacements in the Comprehensive Care for Joint Replacement (CJR) model that covers surgery and 90 days post-procedure care. Hospitals and providers are financially motivated to consider the needs of each patient while implementing quality improvements such as improved transitions between medical settings, reduced hospital readmissions, and reduced lengthy post-acute stays that will result in better patient outcomes and keep costs within the package fee. An episode of care is defined as including the procedure, inpatient stay, hospital care, post-acute care, and provider services. The package prices went into effect in April 2016 nationwide in 67 of 75 metropolitan areas.
As the industry moves to value-based care with CMS leading the way, more common procedures will be attached to a fixed package fee. Then it will be only a matter of time before surgical centers and diagnostic procedure companies follow Walgreens, CVS, and Surgery Center of Oklahoma with full price transparency and quality ratings to attract customers.
Finding Provider Scores and Star Ratings
Online rating systems of physicians and hospital performance are proliferating to meet consumer demands and the need to know anything they can before putting themselves and their trust in the hands of providers. The risk of complications and death can be much higher at one hospital than one just down the road. The Leapfrog Group reports that selecting the right hospital can reduce the risk of avoidable death by 50 percent based on analysis of their safety score grades. Consumers are being urged to compare the quality of hospitals and physicians to get high quality care and the information is becoming more available, although not all hospitals are committed to transparency.
The following are six consumer-friendly websites where consumers can retrieve performance and quality information.
The Leapfrog Group. A survey of hospitals is conducted each year to evaluate hospital performance on quality, safety, and resource use, using national performance measures to evaluate individual facilities. Leapfrog ratings are unique because they report the hospitals that have adapted Leapfrog’s Never Event policy.3 A Never Event, defined by the National Quality Forum, includes surgeries performed on the wrong body part or the wrong patient, leaving a foreign object inside the patient after surgery, or death resulting from devices or contaminated drugs. The survey is voluntary and about half of all hospitals respond. Leapfrog also provides hospital safety scores that reflect how safe U.S. hospitals are for patients by protecting them from preventable errors, injuries, and infections. Scores are released twice a year and use letter grades A, B, C, D, and F. The scores are a composite of 30 publicly available measures of patient safety and include data from CMS Hospital Compare, Leapfrog Hospital Survey, and American Hospital Association Annual Survey.
Healthgrades. This site helps consumers find a doctor, hospital, and care. Searches can be done by condition, procedure, or physician specialty. Healthgrades offers consumers the ability to research a condition, prepare for a procedure, and a health test to assess the severity of a condition. Healthgrades hospital ratings analyze patient outcome data from almost all hospitals in the United States. Ratings are for procedures, conditions by category, patient safety, patient experience, readmission rates, and timely and effective care. Healthgrades uses Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) data from CMS for the patient experience measurement.
ProPublica. This investigative journalism nonprofit organization has several areas where they have increased transparency and made information available online:
Surgeon Scorecard—Experts calculate the death and complication rate for eight elective procedures based on Medicare data.
Dollars for Docs—The payments made by pharmaceutical and medical devices companies to doctors, podiatrists, dentists, chiropractors, and optometrists for promotional speaking, consulting, meals, educational items and research are listed. Based on the CMS Open Payments list mandated by the Affordable Care Act (ACA) and made public by the federal government in 2014, Dollars for Docs is a more user-friendly version of the data.
Prescriber Checkup—This tool compares drug choices of physicians within Medicare Part D.
Nursing Home Inspect—Compare nursing homes across the country based on deficiencies and penalties as well as searching inspection reports for trends and patterns.
Dialysis Facility Tracker—This website is for dialysis patients who want to compare the quality of care at individual dialysis clinics.
ER Wait Watcher—This tool lists each hospital’s average wait times in the emergency room (ER) before one of four outcomes; being seen by a doctor, sent home, given medication for a broken bone, and additional time waiting before being admitted to the hospital.
Consumer Reports. Using their iconic red and black filled circles, Consumer Reports published infection ratings of more than 3,000 U.S. hospitals in 2015. The hospital detailed ratings display patient safety scores, patient experience, patient outcomes, hospital practices, and heart surgery. Consumer Reports ratings combine different public datasets, including CMS’ Hospital Compare website. The site provides detailed guidance on how to choose a physician or surgeon, as well as other consumer advice. Ratings of doctors in California, Massachusetts, Wisconsin, and Minnesota are provided. Surgeons who performed heart bypasses are also rated.
Yelp. The drive to increase transparency in healthcare is evident in the recent partnership between Yelp and ProPublica. Yelp added new data to individual reviews, compiled by ProPublica and CMS, that cover 4,600 hospitals, 15,000 nursing homes, and 6,300 dialysis clinics that will be updated quarterly. The new data supplement Yelp’s star ratings and are displayed with anecdotal consumer reviews.
CMS Compare. The Centers for Medicare and Medicaid Services website, Medicare.gov, provides the ability to compare hospitals, physicians, dialysis facilities, nursing homes, and home health services. It has been made easier for consumers to evaluate with the incorporation of star ratings for physicians and hospitals. CMS data cover the nation.
Seeing Through the Fog
Transparency in healthcare is coming slowly. The information available needs to be evaluated closely by consumers in terms of what is important to them. For instance, when looking up restaurant reviews, the critique of the food by customers is more important to me than the restaurant atmosphere. I read carefully what the reviewers say about specific dishes such as how it is seasoned and what it tastes like. That tells me about the reviewer and whether I have similar likes and dislikes in food tastes. As a result, I disregard what some reviewers say because I don’t agree with what they say is good or bad.
The same principle goes for provider reviews. Finding a provider can follow a general procedure:
Look up providers recommended to you by other people you trust. It’s better if they had the experience themselves.
Go first to Healthgrades.com. This website has all licensed physicians. There may not be a review, but all physicians are there. Find a doctor who has a high concentration of experience in the disease or procedure at your selected hospital.
Look at RateMDs to get general information.
If payments by medical device companies or pharmaceutical companies play a part of your decision, visit Pro Publica’s Dollars for Docs. The Centers for Medicare and Medicaid site for the same information is Open Payments.
Check the Surgeon Scorecard if you are planning to have a procedure. The death and complication rates for surgeons who perform eight common elective procedures are listed by surgeon and hospital.
Check the star rating of the hospital at Healthgrades.com. Avoid one-star hospitals; they have higher complication and mortality rates. Not all hospitals are good at all procedures. Look for a five-star rating for your specific condition. Patients at hospitals with a fivestar rating have a 71 percent lower chance of dying. Healthgrades hospital ratings are based on 45 million Medicare patient records for 4,500 acute care hospitals nationwide.
It is beneficial for healthcare businesses and professionals to be included in reliable sources of data. Just as in researching a restaurant or hotel or masseuse, a healthcare consumer will look at several sources to get as full a profile of a provider as possible, healthcare consumers will evaluate a provider based on multiple sources of reviews. Comparing providers within a specific source is simpler than comparisons across sources because the data will vary based on original data source characteristics and definition of fields.
Providers must pay attention to the ratings. The ratings in combination with first-hand reviews (Yelp and ProPublica) are very powerful to a shopper. The reviews give in-depth detail that explains the rating. If there is a way to respond, do that and offer assistance to resolve the complaint or make it up to them. Healthcare is in a consumer business where when things go wrong, the customer could be badly injured or die. Unhappy customers need to know that someone cares about their poor experience. Their recommendations and reviews affect provider reputations. For many young healthy people, their only experience with the healthcare system may be due to an emergency. While the ER behavior counts, ERs may get a pass for rudeness, long wait times, and less than stellar communications; quality withstanding. Nevertheless, improving the ER experience and receiving good reviews is important to potential patients, especially the young adults who read online reviews to choose their doctors and hospitals.
Elective patients who stay in a hospital or have same-day surgeries as outpatients will be less forgiving in their reviews because their hospital visits are planned. Planned visits, by their nature, have processes and procedures that are known, documented, and follow a schedule. Large deviations from schedules equate to poor customer service. The planned service is what will be rated by patients.
Changing Behavior
Transparency on healthcare services’ quality and cost is necessary for the consumer to have control over their healthcare spending. Right now, it isn’t easy to find a lot of information but the sources are growing rapidly. The first step is finding information that is useful to the consumer. The second step is using the information to take action.
One of the universal facts that public health professionals are acutely aware of is that behavior modification is hard. People who are willing and want to change their behaviors find it difficult. There are no secret tricks, but three ways to increase the probability of successful change are:
Make it simple.
Make it easy.
Make it automatic. Don’t require the person to think.
For example, employers are offering benefits to their employees via healthcare alternatives to reduce costs. One type of offering is telehealth. In appropriate situations, the employee can use a telehealth service (e.g., HealthTap, Teladoc, and American Well) to consult with a physician or nurse on a problem instead of leaving work to wait in a doctor’s office. Appointments can be scheduled online with a face-to-face visit or phone call taking place within 10 minutes. The employer pays for telehealth visits as a supplement to health insurance with the expectation that their overall healthcare expenses will decrease if ER visits can be avoided.
Another service that is available to employers lowers pharmacy costs. Self-insured employers must pay for their employees’ pharmacy expenses. One service allows a patient to tell her physician during a visit that she wants to select her medications at Oration instead of a pharmacy. The app on the patient’s phone immediately displays the pharmacies in her specified area with the lowest price of the medications and the total annual cost. A unique factor that makes it easier for patients is that they provide the best savings customized to the patient’s total medications, geography, and personal purchase preferences. The patient selects the location with the price she likes and the prescription is sent to the pharmacy for pickup. Any transfer of information necessary from the old pharmacy is automatically done by Oration.
This is the kind of platform that can make it easier to change behavior by making change simple and automatic. Taking advantage of the lower-cost medication is attractive because many health insurance policies offered post–Affordable Care Act are high deductible plans, which means the patient pays out about $1,500 to $6,000 for healthcare costs before insurance payments start. The patient can add family members to save more. Any savings in deductible payments go directly into the consumer’s pocket. The self-insured employer saves directly on the lower claims for prescription drugs.
The options to save dollars are presented to the employee at the time of purchase and are redeemed with one click on their smartphone. There is no change in the workflow of the physician and he does not need to make phone calls or receive calls from the pharmacies. The employer does not need to install software. It is a good example of a product that is easy to implement and use by all parties—patient, provider, and employer.
Equality for All
Transparency and ratings will make providers more accountable to improve their outcomes of care.
The advantage for providers is that they have access to the same data as the public and can use it to their benefit. Similar to restaurants that post their ratings from the Department of Public Health on the outside of their business for all potential customers to see, hospitals and doctors can also publish their ratings from credible sources on their own websites and Facebook pages.
Providers who do not take online ratings and reviews seriously will be viewed by the new healthcare consumer as providers who are not in touch with their patients.
There will be increasing transparency in healthcare in areas such as healthcare insurance, not less. And consumer reviews will not go away. As more reviews are accumulated online, massive amounts of information will glean patterns that can be assessed by the reader if they are willing to spend the time reading through comments and deciding which ones are applicable.
Transparency on pricing and quality combined with a little bit of homework by the consumer will go a long way toward ensuring highquality patient outcomes.
Transformation Tips: Transparency
Support the front-line staff with price information. Consumers are asking receptionists, hospital staff, insurance companies, doctors, nurses, and hospital billing departments for price information; be consumer friendly and give staff the ability to discuss prices.
Help consumers find price and quality information. Consumers would like quality and price information but most do not know how to find it. Employers, providers, and insurers can help the consumer by making the sources readily available or providing a reputable list.
Counsel consumers about price variation. Most consumers do not know that prices vary. Providers, insurers, and employers can help them understand the services that vary in price and those that do not.
References
Factsheet: Never Events 2016. “Leapfrog Hospital Survey.” www.leapfroggroup.org/sites/default/files/Files/Never%20Events%20Fact%20Sheet.pdf
Report Card on State Price Transparency Laws. 2015. “Catalyst for Payment Reform and Healthcare Incentives Improvement Institute.” www.hci3.org/wpcontent/uploads/files/files/2015_Report_PriceTransLaws_06.pdf
Schleifer, D., C. Hagelskamp, and C. Rinehart. March 2015. How Much Will It Cost? How Americans Use Prices in Healthcare. Canada: Public Agenda.
1 Report Card on State Price Transparency Laws (2015).