The Paths to Price Transparency

Karen Minich-Pourshadi, for HealthLeaders Media , November 13, 2012
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MNCM developed Minnesota HealthScores, a consumer database of price and quality based on information provided by state health plans as well as data submitted directly by more than 600 medical clinics statewide. Even with all the key stakeholders providing quality and pricing information, creating a formula to calculate the cost of care per condition based on all these entities' data proved to be too complex, Chase says. He says the organization had to take a step back, and it decided to pull total cost of care information from its participants instead.

"We decided we could use that information in a way that's risk adjusted and meaningful for the whole community healthcare system," he notes. "Still, even with the total cost-of-care data we found that each health plan calculated using a different methodology. So now we are working with the health plans to create a communitywide standard to use, so we can get better cost alignment."

Minnesota HealthScores fits the consumer vision of price transparency in that it allows patients to see prices easily online, but ideally hospitals and health systems were also supposed to post price lists openly on their own websites. While some organizations do post a few prices, most do not post full lists. Hospitals and health systems contend that although prices for some uncomplicated procedures or tests can be calculated with relative accuracy and could be posted, others are far too complex and posting an estimate could be misleading; pricing proponents, however, disagree.

"If they say it's hard to do, that's bologna, especially with modern technology. Every other business in the world can do it. With a little bit of effort it can be done, but the risk is that patients will pick and choose, and if a patient is part of the 42 million underinsured, they may back off of getting needed tests entirely," says William Jacott, MD, advisory board member at Minnesota-based Stratis Health System and past chair of The Joint Commission. Bloomington, Minn.–based Stratis Health is a nonprofit organization that leads collaboration and innovation in healthcare quality and safety. "More likely the predominate reason not to post prices is hospitals are protecting their patient populations by keeping the prices under wraps and not giving them the straight scoop on a regular basis."

While price lists are far from the norm—most hospitals instruct patients to call for price imformation—in the past couple of years some hospitals have started adding price tabs alongside quality information on their websites.

Such is the case at Lakewood Health System. It placed quality and price on its homepage under the heading "How do we rate?" and bolded the words, "compare us." The subsection on the site notes, "… in the spirit of 'transparency,' we are giving you the tools right here, to compare Lakewood's services and scores with other healthcare systems. See for yourself by clicking on the tabs: Quality, Service, and Price."

Links allow the patient to review key quality and service data on the system, while the price section lists a phone number that connects patients to a pre-encounter team, which the system started a year ago.

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