Price and quality transparency

States reluctant to target hospital costs in employee health plans, new study finds

Hospital prices are cited most frequently by state plans as their top cost driver, but state negotiators are more likely to target other forms of health care spending when it comes to curbing costs, a new study found  (Source: “States don't want to tackle high hospital costs,” Axios, June 17)

According to a new study by Georgetown's Center on Health Insurance Reforms, state health plan administrators are “fully aware that hospital prices are the primary driver of the steady increase in the cost of employee health benefits. Yet they remain focused on secondary drivers such as excessive or inappropriate utilization.”

State employee health plans are often the largest employer purchasing insurance in their state, so in theory, should have significant clout when negotiating prices. But according to the report, plan administrators say it is hard to go after these prices because of a lack of competition between hospitals, hospitals' political clout and employee pressure to keep broad provider networks.

HHS finalizes price transparency rules

Health insurers will be required to publicly post, in advance, the price for the most common services and procedures, under a rule finalized by the federal Department of Health and Human Services on Thursday (Source: “New Trump policy will force insurers to disclose prices up front,” The Hill, Oct. 29).

Patients will eventually have access to new information about cost, including an estimate of their cost-sharing liability, through an online self-service tool. Currently, this is information that patients typically receive only after they get those services, through an explanation of benefits form.

Beginning in 2022, insurers will be required to make available data files on the costs of various procedures, to better allow for research studies, and to help developers design tools to let patients compare costs across insurance plans. The requirement will take effect for 500 of the "most shoppable" services beginning in 2023, and then for all services starting in 2024.

HPIO releases revamped health transparency resource page

The Health Policy Institute of Ohio’s newly updated healthcare cost and quality data transparency resource page includes federal, state and local-level healthcare cost and quality datasets, tools and reporting, as well as information on organizations setting healthcare quality standards.

In 2012, HPIO released its first Health Data Transparency Basics publication which provides an overview of the availability of transparent, accessible health data and discusses how access to information on price and quality impacts consumer choice, quality of care, healthcare spending and health outcomes. Due to growing interest in the topic, HPIO released a second iteration of the publication in 2016, Healthcare Data Transparency Basics, which explores the rationale for healthcare price transparency, the challenges it presents and potential policy approaches at the state level to increase transparency.

Hospitals, other providers fighting Ohio price transparency law

The Ohio Hospital Association and several other provider organizations have filed a lawsuit against the state of Ohio to block a law requiring price disclosures to patients before they are given non-emergency treatment (Source: “Ohio hospitals want to overturn price disclosure law,” Dayton Daily News, Dec. 27, 2016).

Before non-emergency services are rendered, a healthcare provider would have to give patients written estimates on how much their insurer will be billed for each procedure, test or service, how much their insurers will pay, and calculations for the patients’ out-of-pocket costs. The hospitals, doctors and others suing the state call it “poorly written, confusing, ambiguous ... and impossible legislation.”

The bill’s sponsor, Rep. Jim Butler, R-Oakwood, countered that the health care lobby is resisting price transparency. “It is definitely not something that is impossible for them to carry out. They just don’t want to carry it out. That’s the problem,” Butler said.

In late December, Williams County Common Pleas Court Judge J.T. Stelzer issued a 30-day restraining order, blocking the law from taking effect Jan. 1, and scheduled a hearing for Jan. 20. The list of groups joining the lawsuit is extensive: Ohio Hospital Association, Ohio State Medical Association, Ohio Psychological Association, Ohio Physical Therapy Association, Ohio Chapter of the American Academy of Pediatrics and others.

The Kasich administration declined to comment on the suit, saying it doesn’t talk about pending litigation.

States pushing for more RX price transparency

Outraged by exorbitant prices for certain prescription drugs, lawmakers in at least 11 states have introduced legislation that would require pharmaceutical companies to justify their prices by disclosing how much they spend on research, manufacturing and marketing (Source: “High Drug Prices Prompt Demands for Transparency,” Pew Charitable Trust Stateline, March 7, 2016).

The bills are similar to a provision in President Barack Obama’s proposed 2017 budget. The sponsors of the measures say they have a variety of goals: to educate policymakers and consumers about the reason for high prescription drug prices; to shame pharmaceutical companies into moderating their prices; and, in some states, including Massachusetts, to actually place a ceiling on prices that are determined to be unjustified.

The prices of medications rose 9.4 percent between 2006 and 2013, compared to a general inflation rate of 1.5 percent, according to the AARP.  Spending on prescription drugs rose by 12.2 percent in 2014, while overall health care spending grew by 5.3 percent, according to the federal government.

In addition to Massachusetts, transparency measures have been filed or carried over from last year in Colorado, Michigan, North Carolina, Oregon, Pennsylvania, Tennessee, Virginia and Washington. A proposal in New York has the strong support of Democratic Gov. Andrew Cuomo, while one in California was defeated in early January. Unusually in these days of hyper-partisanship, some of the bills have been filed by Republicans and some by Democrats.

Study: Medical prices higher in areas with more large doctor groups

Prices for many common medical procedures are higher in areas where physicians are concentrated into larger practice groups, according to a new study (Source: “Medical Prices Higher In Areas Where Large Doctor Groups Dominate, Study Finds,” Kaiser Health News, Oct. 9, 2015). 

The October Health Affairs study examined the average county prices paid by preferred provider insurance organizations in 2010. Researchers found that for12 of the 15 procedures studied, prices were 8 to 26 percent higher in counties with the highest average physician concentration compared to counties with the lowest average concentration.

Although larger practices may have the resources to provide benefits to patients through better care coordination or access to new technologies, among other things, these practices’ greater market power may enable them to charge higher prices than smaller practices, the study authors said.

The study focused on 15 high-volume, high-cost medical procedures across a variety of specialties, including vasectomy, laparoscopic appendectomy, colonoscopy with lesion removal, nasal septum repair, cataract removal and knee replacement. The prices studied reflected the negotiated prices between the PPOs and the physician groups, including payments made by both the plan and the patient. 

Study: Dramatic health cost disparities found at local level

A new study from a national health care group found that the cost for imaging services not only varies between regions, but can also differ greatly within the same town (Source: “Health care costs vary widely, study shows,” USA Today, June 30, 2011).

According to change:Healthcare’s quarterly healthcare transparency index, patients, for example, pay as much as 683% more for the same medical procedures in the same town, depending on the doctor they choose.

The organization, which markets tools designed to provide greater price transparency for patients, looked at claims data from May 2010 to May 2011 for 82,000 employees of small businesses to determine price differences for several procedures: MRIs, CT scans, ultrasounds and PET scans.