Transcript Document

Price & Cost Transparency:
Understanding the Issues –
Shaping the Agenda
Consumer-Purchaser Disclosure
Project: Invitational Working Session
May 25, 2006
Agenda
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•
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Goals, Drivers & Context
Audiences for Price Information
Defining Price & Cost Information
Examples of Price Transparency
Major Issues and Questions
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Why New Attention to Price/Cost?
• Consumer Demand
– Increased cost sharing
– More consumers in plans with coinsurance
– Equity concerns regarding pricing for the uninsured
• Private Purchaser
– Inclusion of cost/price information in NCQA new health plan
“Physician/Hospital Quality” Accreditation Module
– Push for efficiency leading to cost alone
• State Interest
– Legislation mandating publication of chargemaster
– Concern for equity of pricing for the uninsured
– Public reporting efforts
• Federal Interest
– Price transparency core element of Administration Initiative
– CMS Request for Comment (Fed.Reg. due 6/12/06)
– House Ways & Means Hearing
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Goals of Price/Cost Transparency
• Promote higher value – linking quality and cost
• Enable consumers to make better informed choices
(especially as they bear more direct out-of-pocket
exposure)
• Bring market forces to bear on providers to reduce
costs
• Encourage payment system overhaul by making
transparent current dysfunction
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Administration Comment Request
• “Any” ways HHS can encourage transparency in health care
quality and pricing – voluntary or through regulatory authority
• How could CMS use of its regulatory authority to enhance
transparency of quality and pricing information?
• Would the publication of Medicare rates be helpful or harmful?
– Should CMS publish is risk-adjusted DRG rates for every
hospital?
– Should HHS establish conditions of participation for
hospitals that require posting of prices and/or policies
regarding discounts and other payment options for
uninsured patients?
– Should CMS publish total payments over an episode of
care?
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Context:
Who’s Doing
the Spending
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Context:
Where’s the
Money Going
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Nonelderly Coverage
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Context: The Uninsured
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Plan Enrollment of Covered Workers
Conv/FFS
3%
PPO
61%
HMO
21%
POS
15%
Source: Kaiser/HRET 2005 Annual Employer Benefits Survey
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Costs in Context – Consumers in PPOs
Single
Family
Share of Premium
-- Worker
-- Firm
Total
$603
$3,547
$4,150
$2,641
$8,449
$11,090
Annual Deductible
(In-Network)
$323
$679
Out-of-Pocket Maximum
For In-Network care; may be larger or no max for Out-of-Network.
“Low”: 29% Single; 25%
Family (by Large Firms Offering)
“Medium”: 36% Single;
37% Family
“High”: 34% Single; 36%
Family
>$1,499
>$2,999
$1,500-$2,499
$3,000-$4,999
<$2,500
<$5,000
Source: Kaiser/HRET Employer Health Benefits, 2005 Annual Survey
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Costs in Context – Consumers in HDHPs
Single
Family
Share of Premium
-- Worker
-- Firm
Total
$423
$3,008
$3,503
$2,654
$5,876
$8,530
Annual Deductible
(In-Network)
$1,870
$3,868
Out-of-Pocket Maximum
For In-Network care; may be larger or no max for Out-of-Network.
Average
$2,859
$5,075
Contribution to HSA or HRA
Note: only approximately 20% of firms fund accounts or offer HSA eligible accounts
employees can fund
Firm Contribution
$792
$1,556
Source: Kaiser/HRET Employer Health Benefits, 2005 Annual Survey (examples for “HRA”)
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Medicare Coverage
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Sources of
Payment for
Medicare
Beneficiaries
Source: Kaiser Family
Foundation, Medicare
Chartbook 2005
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Medicare
Out-of-Pocket
Spending
Source: Kaiser Family
Foundation, Medicare
Chartbook 2005
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Medicare
Out-of-Pocket
Source: Kaiser Family
Foundation, Medicare
Chartbook 2005
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Medicare Out-of-Pocket for those with
High Costs
Source: Medicare Beneficiaries Out-of-Pocket Costs: Are Medicare Advantage Plans a
Better Deal? May 2006, Commonwealth Fund
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Remember the Value Equation
Adapted from Regence Blue Shield
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Price/Cost Information Users
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•
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Consumers
Providers
Plans
Purchasers
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Consumers’ Circumstances
• Plan/Payer Status
– Health plan enrollee
– Medicare FFS
– Uninsured
• Health Status/Condition
–
–
–
–
Procedure/Medical
Urgent/Non-urgent
Chronic
Preference Sensitive
• Education/Information Seeking
See Appendix for Consumer Vignettes
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ALL Consumers Need Price
Information that is “QUAARP”:
• Linked directly to Quality measures
(outcomes, patient experience, compliance
with EBM)
• Understandable
• Actionable
• Accessible
• Relevant to their circumstances (health and
coverage status)
• Predictive (accurate)
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Consumers’ Needs by Payer Status
(“QUAARP” Plus)
Consumer Type
Price Information Needs
Health Plan Enrollee
• Relative quality/price of plan
choice
• Plan design specific (copays,
coinsurance, OOP Max,
deductible, funded accounts,
in/out-of-network pricing)
Medicare FFS
• Relative quality/price of plan
versus FFS choice
• Terms of Medicare supplement or
Part-D plan
Uninsured (or out-of-plan)
• Information to shop/negotiate
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Consumers’ Needs by Health Status/Issue
(“QUAARP” Plus)
Consumer Type
Price Information Needs
Procedures/Medical
• IF non-urgent
• Total costs of all related care
(facilities, tests, RX, professional)
Chronic Conditions
• Total costs of all related care
(facilities, tests, RX, professional)
• Plan negotiated pricing
Preference Sensitive
• Costs in context of information to
inform exercise of preference
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Purchasers’ Information Needs
Purpose
Price Information Needs
Select Health Plan(s)
• TOTAL Population Cost
• Link to quality information for
value assessment
• Risk and benefit adjustments
needed
Select “high performing
networks” and drive R4P
(rewards for performance)
• Episode of care
• Link to quality information
Promote consumer engagement • “QUAARP”
in price and quality decisions
• At actionable level for consumer
• Link between quality information
with price
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Health Plans’ Information Needs
Purpose
Price Information Needs
Provider contracting and
payment
•
•
•
•
Select “high performing
networks” and drive R4P
(rewards for performance)
• Episode of care
• Need quality information
Negotiated unit price
Episode of care costs
Need quality information
Risk and benefit adjustments
needed
Promote consumer engagement • “QUAARP”
in price and quality decisions
• At actionable level for consumer
• Link between quality information
with price
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Providers’ Information Needs
Purpose
Price Information Needs
Benchmarking to maximize
income
• Comparison to peers (practice and
region)
Support engagement in R4P
Programs (Rewards for
Performance)
• Comparison to peers (practice,
region and quality performance)
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Consumer Care Types
•
Procedures:
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–
•
Outpatient
Inpatient (e.g., Hip Replacement, Delivery, CABG, Disk Surgery)
Discrete Services
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–
–
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Preventive Screening
Tests (e.g., MRI, biopsy)
Prescription/OTC Drugs
Ongoing Chronic Care
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–
–
–
•
Diabetes
Asthma
COPD
Depression
Emergent and Very Expensive – “Never-Relevant Events”
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Heart Attack
So expensive – OOP irrelevant
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Cost/Service Categories (1 of 2)
• Total Costs All Care: costs for all medical expenses attendant with
ALL care received by an individual, family OR population. Issues:
• Most relevant information for an employer or public purchaser
• Needs effective risk adjustment for comparative purposes
• Increasingly “plan chooser tools” are estimating consumers’ total costs including
share or premium and all out-of-pocket
• For consumer can address the unknown of future care needs
• Episode of Care Costs: costs for all medical expenses attendant with
a particular procedure including all professional costs, therapy,
diagnostics and drugs. Issues:
• Rarely available or made actionable for consumers or providers
• Annual Treatment Costs: costs for all medical expenses attendant
with a particular chronic condition (e.g., asthma), including all
professional costs, therapy, diagnostics and drugs. Issues:
• Average estimates may vary greatly
• Difficult to predict actual scope of some visits
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Cost/Service Categories (2 of 2)
• Inpatient Costs: costs of particular procedures (e.g., hip
replacement). Issues:
• Cost may only reflect partial elements of total costs (e.g., only those of inpatient
facility, not ancillary physician costs)
• Outpatient Costs: costs of typical outpatient procedures. Issues:
• Costs likely to reflect facility and professional service fees, but may
• Office Visit/Unit of Service: costs for “typical” office visits (e.g.,
physician visit, physical therapy, MRI, x-ray). Issues:
• Difficult to predict actual scope of some visits
• Unit of Service: costs for specific tests, services (e.g., charge
master-detail). Issues:
• Difficult to predict actual scope of some visits
• Prescription Drug: costs of prescription drug associated with
particular treatment. Issues:
• Cost for what course of treatment
• Whether costs compared to alternatives
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Cost Information Displays
• Full charges (no health plan discounts)
• Discounted rates (health plan discount
applied)
• Average costs (NOT provider specific; may
be commercial, Medicare or combined)
• Range of costs (NOT provider specific; may
be commercial, Medicare or combined)
• Provider specific costs – charges, discounted
or relative
• Cost to member/Out-of-pocket
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Sources of Price Information
•
•
•
•
Health plan
Multiple health plan
Medicare
Provider (e.g., hospital)
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Examples of Price Information
In the Market
• New Hampshire: Department of Insurance
and Hospital Association
• Consumers Union (Prescription Drugs)
• United Health Plan
• Aetna
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Presentations
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New Hampshire Price Tools
Department of Insurance: “NH Health Cost” @ www.nhcost.org
Hospital Association: “New Hampshire PricePoint” @ www.nhpricepoint.org
NHCost (Dept. of
Insurance)
Portsmouth General
Hospital, Portsmouth
NH
NHPricepoint (NH
Hospital Assn.)
Hip Replacement
NHCost: “Total hip replacement (PROC 8151
PricePoint: “Major Hip, Knee, Ankle, Foot Surgery,
including Replacement”
NHCost (Dept. of
Insurance)
NHPricepoint (NH
Hospital Assn.)
Uncomplicated Vaginal Delivery
NHCost: “Vaginal delivery without complicating
diagnosis, DRG 373
PricePoint: Uncomplicated vaginal delivery
“Typical” or “Average”
“Price” or “Charge”
$24,162
$35,924
$6,158
$3,714
Facility Cost
$17,165
$35,924
Inclusive
$3,714
Provider Cost
$6,977
Not included
Inclusive
Not Included
$11,140-$41,656
$30,0619 =
“Comparison Group”
$30,433 = “All NH
Hospitals”
$4,400-$8,908
$5,002 = “Comparison
Group”
$4,804= “All NH
Hospitals”
Price Range or
Comparison
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Sample Presentations
• Consumers Union (Prescription Drugs)
• United Health Plan
• Aetna
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Major Alternatives: Strengths,
Weaknesses and Recommendations
• Price in Absence of Quality Information
• Total Costs of Care – Population or
Multi-Condition
• Full charges (no plan/other discounts)
• Actual plan rates
• Average, relative or range of costs
• Others
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Administration Comment Request
• “Any” ways HHS can encourage transparency in health care
quality and pricing – voluntary or through regulatory authority
• How could CMS use of its regulatory authority to enhance
transparency of quality and pricing information?
• Would the publication of Medicare rates be helpful or harmful?
– Should CMS publish is risk-adjusted DRG rates for every
hospital?
– Should HHS establish conditions of participation for
hospitals that require posting of prices and/or policies
regarding discounts and other payment options for
uninsured patients?
– Should CMS publish total payments over an episode of
care?
© Consumer-Purchaser Disclosure Project, 2006
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Template: Considering Price Reporting Options
Strengths
Weaknesses
• E.g.,
• Relevance to
consumer
• Ease of collection
• Accuracy for
consumers
• E.g.,
• High potential
unintended
consequences
© Consumer-Purchaser Disclosure Project, 2006
Recommendations
•
•
•
•
E.g.,
Don’t use
Context needed
How to improve
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Price in Absence of Quality Information
Strengths
Weaknesses
• May drive more rapid • Only partial (and not
development of
most important)
quality measures
picture
• Belief of many
consumers that
“more expensive
means better care”
© Consumer-Purchaser Disclosure Project, 2006
Recommendations
• Promote quality
measures ASAP
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Annual Total Costs of Care (Population or
family/multi-condition)
Strengths
Weaknesses
• Most relevant to
purchaser
• Informs plan
selection
• For consumer
recognizes
unpredictability of
care needs
Recommendations
• Not actionable at
time of “teachable
moment” of illness
• Costs often not
adequately riskadjusted
• Purchasers often
don’t encourage
enrollment in highest
value plan
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Full charges (no plan discounts)
Strengths
Weaknesses
• Easy to collect
• Does not facilitate
provider negotiating
up
Recommendations
• Very misleading for
insured
• Misleading for all
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Actual Plan Rates
Strengths
Weaknesses
• Highly relevant to
insured
Recommendations
• May foster lower
price providers to
raise prices
(negatively impact
plans’ negotiating
strength)
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Average, Relative or Range of Costs
Strengths
Weaknesses
• Recognize
inaccuracy of
general prediction
Recommendations
• Huge variation by
provider, geography
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Major Outstanding Questions
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Price Transparency
Appendix
• Consumer Vignettes
• Covered Workers’ Cost-Sharing and
Coinsurance
• Medicare Benefits and Cost-Sharing
• Consumer-Purchaser Disclosure Project
Information
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Consumer Vignettes (1 of 2)
Personal Circumstance
Price/Cost and Quality Interests
Joan has allergies or hypertension – has
predictable medical services needs albeit w/
swings.
She would value provider choice support – what’s the relative difference in
cost if she uses MD/Practice A versus MD B/practice B for a year of
care…don’t need exact $$; potential interest in relative RX costs and options.
Diane is pregnant or wants a preventive care
checkup/5 yr H&P.
She is purchasing a transaction with relative certainty and she needs the
exact $$ amount of service from provider A vs. provider B; adjusted for her
benefit design.
Bob is choosing his health plan and deciding
on funding an HSA/FSA. He is in good
health/low risk factors.
He can predict reasonably well expected costs but always an element of
uncertainty; he wants help making plan choice (considering his share or
premium) and a budget with average OOP cost of service given the provider
network he uses.
Victor needs therapy for cancer or major
degenerative disease.
Potentially very large RX costs (especially for biologics or injectables) – often
huge markups in this world – Victor wants the price schedule posted just like
FTC mandated for funeral homes in 1980s so he knows cost of each element
of the care package; he wants a market clearing price to drive down the
markups. He may also want costs of in versus out-of-network providers as
he is condition is so serious he wants ability to consider “all options.”
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Consumer Vignettes (2 of 2)
Personal Circumstance
Price/Cost and Quality Interests
Roberta needs surgery that includes
implantable device/part (knee replacement,
pacemakers etc.)
She’s don’t the math and knows that regardless she will hit her OOP
maximum – she’s not price sensitive, she wants information on quality.
Steve has “Quality of Life” purchase interest
and wants to use up his funded HRA.
He wants price information that is as precise as possible to comparison shop
and purchase (e.g., cosmetic repair, Lasik).
Angela has chronic disease that is not well
controlled, peaks/valleys in service use.
She may need more advanced decision support to parse the cost
components that are predictable (like medications or bimonthly office/therapy
visits) to price shop those components to get average $$ cost if I use
MD/practice A vs. MD/practice B.
OR
She want comparison of average episode costs to her for year comparing
providers AND comparing higher severity cases versus well managed chronic
condition.
OR
She may want help in selection health plan that generally does a better job on
mix of quality and cost.
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Coinsurance for Covered Workers
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Cost-Sharing for Covered Workers
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Medicare
Part A:
Benefits and
Cost-Sharing
Source: Kaiser Family
Foundation, Medicare
Chartbook 2005
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Medicare
Part B:
Benefits and
Cost-Sharing
Source: Kaiser Family
Foundation, Medicare
Chartbook 2005
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The Disclosure Project
The Consumer-Purchaser Disclosure Project is a coalition more than 50 of the nation’s
leading consumer, labor, and employer organizations that working to advance publicly
reported, nationally standardized measures of clinical quality, efficiency, equity, and
patient centeredness for health plans, hospitals, medical groups, physicians, other
providers, and treatments. The Disclosure Project is supported by financial and in-kind
support of participating organizations and by financial support from the Robert Wood
Johnson Foundation.
For more information:
Visit our website: http://healthcaredisclosure.org/
Contact:
Katherine Browne
Managing Director
Email: [email protected]
(202) 238-4820
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