Attitude adjustment required to bend the cost curve

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The lack of price and quality transparency in U.S. healthcare has fueled spiraling costs but has not promoted quality care. A pair of experts proposed a transparency initiative under the Affordable Care Act (ACA) to achieve high quality and cost control. They made the case for their proposal May 27 in Annals of Internal Medicine.

Bob Kocher, MD, from University of Southern California in Los Angeles, and Ezekiel Emanuel, MD, PhD, from University of Pennsylvania in Philadelphia, wrote, “All data on price, utilization, and quality should be made publicly available unless there is a compelling publicly accepted justification to keep it confidential.”

Their rationale? Higher premiums and less effective competition harm all stakeholders. Transparency, they argued, is key to a revamped healthcare system that delivers higher quality and improved cost control.

Lack of transparency falls into three categories—price, utilization and quality, according to Kocher and Emanuel.

Patients cannot obtain price information. That’s because multiple factors are combined in healthcare prices. Compounding the issue is the more than 200 percent disparity in local hospital pricing.

Patients also often cannot obtain data on how many procedures a provider performs, which is an important predictor of quality.

Finally, “access to quality data is very limited and thus far better performance has not led to market share gains.” Kocher and Emanuel pointed to the lack of quality metrics and explained that existing metrics focus on inpatient care processes for nine diseases or procedures: coronary artery bypass graft surgery, congestive heart failure, chronic obstructive pulmonary disease, diabetes, community-acquired pneumonia, pregnancy, hip replacement, knee replacement and organ transplants.

Although ACA requires release of Medicare claims data and Medicare physician quality reports, regulations have limited dissemination to a few “qualified entities” with the technical capacity to analyze the data.

Health plans present another barrier. That’s because many succumb to employers’ demands for broad provider networks that include academic medical centers. The problem is that 30-40 percent of academic medical centers prohibit transparency.  

Why is the transparency initiative necessary? As accountable care organizations proliferate, providers need to identify those “who can consistently deliver high quality care, with fewer complications, at an affordable price in order to capture more savings and achieve quality metrics goals.”

Kocher and Emanuel cited a systemwide change in attitude as a prerequisite for meaningful progress on transparency. All payers should be required to make claims data publicly available, and patients should be provided personalized pricing information, they wrote.

The authors concluded with suggestions for major stakeholders. They recommended the federal government ease restrictions on access to Medicare data, states require providers to share prices with patients prior to elective procedures and health plans and employers support transparency tools.