Shopping for Health Care

Transparency tools that illuminate the price and quality of health are all the rage. But will Americans use them to find good deals?

Thomas Reinke
Contributing Editor

It’s easy to comparison shop these days. In fact, it’s so easy we take it for granted. On Kayak, you can find the cheapest flight and easily filter by how many stops and time of day. Go to TripAdvisor or Yelp, and you can click away to find the most popular hotels or restaurants. And of course, you can read endless customer product reviews when you shop on Amazon.

This same sensibility and experience is now being applied to health care in the form of what the field has elected to call “transparency tools.” The name refers to the fact that until recently, information about prices and quality in health care has been largely hidden in arcane government datasets and private insurance claims. As has often been said, when third-party payers were picking up the tab or charging minimal copayments, Americans had little reason to fret about the price of the health care they were getting. With the advent of higher deductibles and less generous coinsurance, attitudes are changing fast.

Transparency tools—fast, intuitive, and increasingly available on your phone as apps—are being touted as the way to unleash the disruptive power of shopping for health care. They allow people to compare prices for procedures like colonoscopies and for imaging tests like MRIs. An increasing amount of quality data is also available—and comprehensible. For example, CMS’s Hospital Compare tool makes it easy to find out how your local hospital stacks up against others on readmission rates, how patients rated their experience at the hospital, and how it handled certain aspects of care. The information gets quite specific. You can find out, for instance, what percentage of outpatients with chest pains got aspirin within 24 hours of their arrival. In April, CMS added star ratings that summarize patient experience survey data to Hospital Compare so that comparison among hospitals is easy.

Fewer than 20% of Americans have a high degree of trust about quality information from health plans.

But some health plan executives—and the vendors selling these transparency tools—are waving them around like magic wands. There are still plenty of good reasons to be skeptical about how much they can accomplish. For one, providers have considerable influence over prices—and considerable power in referring patients to specific other providers and facilities, regardless of price. When it comes to quality, are we really measuring it or just what can be most easily measured? Perhaps most importantly, even though their own money is increasingly at stake, how many people are really going to be savvy health care shoppers, especially when it comes to sorting out difficult issues of quality?

Hunting for a good deal

Without question, transparency tools are in vogue. CMS has five tools, and 11 states have developed their own tools based on all-payer-claims databases. About 70% of the privately insured population had access to cost-transparency tools in 2013, according to the Government Accounting Office’s report Health Care Transparency: Actions Needed to Improve Cost and Quality Information for Consumers.

Clunky, vague versions are being replaced by ones that are slick and specific. “The transparency tools offered by health plans have made a significant step forward,” says Paul Ginsburg, PhD, a health care policy expert at the University of Southern California. “They now provide consumers with their exact out-of-pocket costs for services based upon their own copays and deductibles.”

Chris Riedl

“What may be defined as quality by experts from a clinical perspective could be very different from what a consumer defines as quality,” says Chris Riedl, the head of product strategy and management at Aetna.

Fueling the proliferation of price-transparency tools is the growing number of people with health savings accounts and other consumer-directed health plans (CDHP). By some counts, almost 1 in 4 Americans with employment-based health insurance has CDHP coverage. Chris Riedl, head of product strategy and management at Aetna, says that people with the company’s CDHP coverage, called Aetna HealthFund, go online to check prices two times more often than traditional health plan members. Riedl says the company’s transparency tools have had more than 5 million hits, with annual increases averaging 40% to 50%. Aetna has looked at 34 commonly used services and found that members saved on average $170 in out-of-pocket costs, while employers saved $610 in allowed costs.

Beliefs about high quality, high cost

Still, today’s transparency tools lack some important features, and consumers may not use them effectively. As Ginsburg points out, the current sweet spot is the routine test or procedure, for which quality may not vary much from provider to provider. When it comes to more complex and expensive services, higher prices are synonymous with higher quality in many people’s minds, even though that may not be the case—and people are more concerned about quality than price. Results from a 2014 survey about health care quality by the Associated Press-NORC Center for Public Affairs Research in Chicago bear this out. The survey found that 48% of Americans believe that higher quality health care costs more. That’s not terribly surprising, but it’s a bit of a reality check if you’re banking on transparency tools and people’s shopping acumen to bring down health care spending.

There’s no shortage of efforts to measure quality and present the data in a way that is average-person friendly. In addition to CMS, private groups like the National Committee for Quality Assurance and the Leapfrog Group have tools that make it easy to search and find quality data. Leapfrog’s Hospital Safety Score is especially easy to use. In the AP-NORC survey, 40% of respondents said they had seen information on the consumer ratings websites HealthGrades, Yelp, or Angie’s List.

Commercial insurers have taken steps to make sure their tools highlight the cost and quality of providers. Victoria Bogatyrenko, vice president of innovation at UnitedHealthcare, says physicians with its Tier 1 rating have met the company’s criteria for cost efficiency, and members who use the insurer’s cost estimator tool are more likely to use a Tier 1 physician than those who don’t. The program uses a variety of standards, including some developed by medical specialty societies, to evaluate physicians for quality and cost efficiency. The ratings are available online and through the Health4Me app, which has a “guest version” that provides cost information for more than 750 inpatient and outpatient services. Aetna takes a similar approach. Riedl says providers the company deems high quality and cost-effective are in Aetna’s Aexcel Network, and the transparency tool highlights them with a blue star. It is as if the Michelin Guide decided to branch out from rating restaurants and hotels.

Health plans have a trust problem

But health plans have a problem as raters of provider quality: People just don’t trust them. In the AP-NORC survey, fewer than 20% of Americans said they have a high level of trust in information about provider quality that comes insurers or state and federal agencies.

As in many other areas friends and family are the most trusted sources. Physicians fall somewhere in the middle. The survey found that slightly fewer than 50% of respondents trust their regular doctor as a source for information about health care quality.

Flaws in quality measures

But in fairness to health plans and all the other organizations developing quality measures, it’s not easy to know exactly what should be measured—and further, how to make the results palatable to the shopping public. The AP-NORC survey found that people tend to focus on “soft” quality measures like the doctor–patient relationship and a doctor’s personality traits. This emphasis is perfectly understandable. Those are the aspects of medical care that patients experience directly and that don’t require any special knowledge. It’s a classic example of the gap between experts and the public. “What may be defined as quality by experts from a clinical perspective could be very different from what a consumer defines as quality,” notes Riedl.

Jennifer Schneider, MD, chief medical officer at Castlight Health, a developer of third-party price-transparency tools, sees major room for improvement in quality measures. Most of the measures being used today are designed to drive performance in provider organizations, but they don’t resonate with consumers, in her opinion. “We need more robust and meaningful measures,” says Schneider. “What we have now doesn’t help consumers make choices at the doctor level.”

The National Quality Forum is running the Measure Applications Partnership (MAP), a multistakeholder initiative funded by CMS to develop more meaningful measures of quality, including measures that meet consumers’ needs, measures for the public reporting of quality, and measures for performance-based payment. The partnership includes consumers, businesses and purchasers, labor, health plans, clinicians and providers, communities and states, and suppliers. The NQF believes that “MAP’s careful balance of these stakeholder interests ensures that the federal government will receive varied and thoughtful input on performance measure selection.”

However, three years into the process, the program seems to be suffering from analysis paralysis, and it shows just how slowgoing the development of measures can be. MAP released a report in March describing its effort to identify “measures that matter.” The report noted multiple viewpoints on what should constitute a measure that matters, with some stakeholders stressing the importance of process and others preferring structural measures. The program’s stakeholders did not reach a consensus on which measures are the most valuable in driving results.

Even if transparency tools improve so that Americans can become astute shoppers, buying health care will never be as simple as buying an airplane ticket. Often, we’re not free agents when it comes to health care purchases. Decisions about the need for additional care and recommendations about who will provide it are frequently made by clinicians during the course of an office visit or at the time of hospital discharge. Realistically, how are transparency tools and shopping for price and quality going to fit into that scenario? Transparency tools are available to physicians as part of decision-support modules. But as an article in JAMA’s issue on price transparency pointed out last year, these modules often lack the specific rates that a health plan pays each provider and may not incorporate a patient’s specific terms of coverage.

Making the referral “shoppable”

Brian Lobley, senior vice president for marketing and consumer business at Independence Blue Cross in Philadelphia, acknowledges the problem but sees today’s technology and cost shifting to individuals as changing this dynamic. Independence is in the middle of revamping its patient portal and transparency tools that will address what he calls the “shoppable referral.” The goal is to create an app that allows easy cost comparison on a smartphone and real-time information about a member’s out-of-pocket costs, specific to his or her particular health plan. Text messages might remind members that the service they’re scheduling is in a shoppable category, with different prices depending on the facility and provider.

Lobley expects these handy and specific transparency tools to start useful discussions between doctors and patients: “They mean that I can now engage my doctor and say, ‘Hey, going to Dr. Smith is going to cost me $750 out of pocket. I am looking here and this data says that Dr. Jones really has the same or better outcomes and because of my health plan’s contracts, it is going to cost me zero dollars. Why am I going to Dr. Smith?’”

The health insurance industry is undergoing a transformation, Lobley explains enthusiastically, with members becoming active consumers who are keenly interested in getting a good price, just like for an airline ticket or hotel. “At the end of the day,” says Lobley, “I have a responsibility to our members to make sure they’re extracting the right value and experience out of the health plan. I want to protect their dollars as much as they want to protect their dollars. So I want to make sure that they have the information they need to help them save money.”

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