Healthcare Economics Professionals Council

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Derrick Boone
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1 Healthcare Economics Professionals Council Price Transparency Panel December 9, 2014 Jim Landman, HFMA, Director, Healthcare Finance Policy, Perspectives & Analysis Suzanne F. Delbanco, Ph.D., Executive Director, Catalyst for Payment Reform Mary Anne Jones, Chief Financial Officer, Priority Health Marti Lolli, Sr Director Product Development and Health Reform, Priority Health

2 Save the Date Next Webinar Wednesday, February 18th Next Live Meeting HFMA Annual National Institute (ANI) June Orlando, FL To request additional information or RSVP, reach out to Celina Kurani at 2

3 Agenda Introductions Jim Landman, HFMA, Director, Healthcare Finance Policy, Perspectives & Analysis Suzanne F. Delbanco, Ph.D., Executive Director, Catalyst for Payment Reform Mary Anne Jones, Chief Financial Officer, Priority Health Marti Lolli, Sr Director Product Development and Health Reform, Priority Health Open Discussion 3

4 Price Transparency Findings of the HFMA Task Force James H. Landman, JD, PhD Director, Healthcare Finance Policy, Perspectives & Analysis HFMA HFMA Healthcare Economics Professionals Council December 9,

5 HFMA Price Transparency Task Force 2

6 HFMA Price Transparency Task Force Report Clarifies basic definitions that are often misused Sets forth guiding principles Establishes roles for payers, providers, others Reflects consensus of key stakeholders hfma.org/transparency 3

7 Definitions of Key Terms Cost, charge, and price should not be used as interchangeable terms. Cost varies by the party incurring the expense. Charge is the dollar amount a provider sets for services rendered before negotiating any discounts. Price is the total amount a provider expects to be paid by payers and patients for healthcare services. 4

8 Definitions of Parties to a Transaction Care Purchaser Individual or entity that contributes to the purchase of healthcare services. Payer An organization that negotiates or sets rates for provider services, collects revenue through premium payments or tax dollars, processes provider claims for service, and pays provider claims using collected premium or tax revenues. Provider An entity, organization, or individual that furnishes a healthcare service. 5

9 An Actionable Definition of Price Transparency Readily available information on the price of healthcare services, that, together with other information, helps define the value of those services and enables patients and other care purchasers to identify, compare, and choose providers that offer the desired level of value. 6

10 Guiding Principles Price transparency information should: Empower patients and other care purchasers to make meaningful price comparisons Be easy to use and easy to communicate Be paired with other information that defines the value of services for the care purchaser Enable patients to understand the total price of their care and what is included in that price And price transparency will require commitment & active participation of all stakeholders. 7

11 Roles for Key Stakeholders Health plans should serve as the principal source of price information for their members Providers should be the principal source of information for uninsured patients and out-ofnetwork care Referring clinicians should use price information to benefit patients All stakeholders can offer a price information resource to consumers 8

12 Health Plan Role Health plans should serve as the principal source of price information for their members. Tools for insured patients should include: The total estimated price of the service A clear indication of whether a particular provider is in the health plan s network A clear statement of the patient s estimated out-of-pocket payment responsibility Other relevant information on the provider or service sought 9

13 Provider Role For uninsured patients and out-of-network care, providers should: Offer an estimated price for a standard procedure and make clear how complications may increase the price. Clearly communicate pre-service estimates of prices. Clearly state what services are included in an estimate. Give patients other relevant information, where available. 10

14 Referring Clinician Role Physicians and other referring clinicians should Help patients make informed decisions about treatment plans Recognize the needs of price-sensitive patients Help patients identify providers that offer the best value 11

15 Employer Role Employers should continue to use and expand transparency tools that help their employees identify higher-value providers Self-funded employers should identify data that will help them Shape benefit design Understand their healthcare spending Provide transparency tools to employees 12

Pricing Resource for Consumers Describes how to request price estimates, step by step Clarifies what estimates may or may not include Explains in-network and out-of-network care Defines

16 Pricing Resource for Consumers Describes how to request price estimates, step by step Clarifies what estimates may or may not include Explains in-network and out-of-network care Defines key terms Available for posting on your website at no charge hfma.org/transparency ahaonlinestore.org Hardcopies available for purchase in bulk at a nominal price through AHA s online store 13

17 Transparency Issues Yet to Be Addressed Determining effect of transparency on prices For consumers, more transparency is better. But in the B2B marketplace, the jury is still out. Surfacing issues with out-of-network balance billing Inadvertent out-of-network use (e.g., anesthesiologists, pathologists) Emergency care Reassessing hospital chargemasters It is time for change! 14

18 Transparency: A strategic lever to creating a high-value health care system Suzanne F. Delbanco, Ph.D. Executive Director December 9, 2014

and price Benefits that encourage consumers to seek high value providers Payments

19 Who We Are Why We Care About Price (and Quality) Transparency Shared Agenda Because quality and price vary so much but are uncorrelated, we need: Transparency on quality and price Benefits that encourage consumers to seek high value providers Payments designed to cut waste or reflect performance December 9,

Current Status: Price Transparency Transparency is in demand: Purchasers with rising health care costs asking consumers to take on more financial responsibility, motivating them to seek efficient,

20 Current Status: Price Transparency Transparency is in demand: Purchasers with rising health care costs asking consumers to take on more financial responsibility, motivating them to seek efficient, higher-quality care. Massive growth of health plan, independent, and state-based price transparency tools and solutions with widely varying designs and approaches; but utilization is lagging Longstanding barriers remain: gag clauses, data ownership issues, accuracy of price estimates, low consumer engagement, poor availability for physicians Price is an estimate of a consumer s complete health care cost on a health care service or set of services that: reflects negotiated discounts; is inclusive of all costs to the consumer associated with a service or services, including hospital, physician and lab fees; identifies the consumer s out-of-pocket costs. December 9,

Transparency is a Building Block for New Benefit Designs Employers strategies to mitigate cost increases include: Raising deductibles

Employers strategies to improve quality include: Onsite clinics Consumers are now willing to make trade-offs, such as travelling for

Consumers are increasingly ready to trade choice for a lower premium And are more often seeking and using lower cost settings, such as

21 Transparency is a Building Block for New Benefit Designs Employers strategies to mitigate cost increases include: Raising deductibles Consumer-directed health plans with HSAs High-performance networks Unbundling dental and medical coverage Dropping high-cost plans Employers strategies to improve quality include: Onsite clinics Consumers are now willing to make trade-offs, such as travelling for care, or tolerating narrower networks if it reduces their cost sharing. Consumers are increasingly ready to trade choice for a lower premium And are more often seeking and using lower cost settings, such as retail clinics Sources: Towers Watson; HRPA report, Common Wealth Fund Photos from Grand Rapids PCMH and Kaiser Health News Source: Harris Interactive Consumer Survey December 9,

consumers to insert preferences Include information on Rx and ancillary services to help chronically-ill and elderly Help consumers avoid unneeded care Encourage consumers to act on

22 Next Up: Educating and Engaging Employees and Physicians? Help consumers understand their share of cost, total cost, and their spending and utilization Show consumers quality measures that matter Allow consumers to identify best buy Allow consumers to insert preferences Include information on Rx and ancillary services to help chronically-ill and elderly Help consumers avoid unneeded care Encourage consumers to act on information To the Audience: How comprehensive is your support? Are consumers using it? Is there a discernible shift in where consumers seek care? Are outcomes better? Have costs gone down? And, support physicians who need information to protect patients and the bottom line December 9,

23 Contact Information and Questions FOR MORE INFORMATION VISIT: CONTACT: Suzanne Delbanco December 9,

24 Transparency Transforming health care through engagement Mary Anne Jones, Chief Financial Officer Marti Lolli, Sr Director Product Development and Health Reform

25 The journey of transparency As a healthcare system, our experience is unique A decade of adjustments in reimbursement models Radical first step of disclosing charges Front-line leading plans to deliver cost information to membership - Healthcare Blue Book partnership First to deploy innovative benefits supporting consumer engagement

26 What is a transparency product? Go green and get paid A health insurance product that motivates consumers to shop for lower cost providers In our case: - Leverages the information provided through shopping tool - Incents consumers to go green through the use of rewards or penalties

27 What is a transparency product? Continuum of products PriorityHSA PriorityRewards Reference Pricing Structure

28 Employers can save The numbers don t lie Professional Pharmacy Facility Priority Health data shows savings is available Fair market price for joint replacement - CALPERs saved 19% PLUS employee cost-sharing savings

29 Tools and Engagement More than a product New cost calculator tool designed with the customer in mind what do they want to know? Integrate into our customer service, prior auth and case management conversations High concierge service to support members along the journey

30 Long term strategies for provider systems Market is insisting that we change There are sustainable options available Focus on building integrated value sites

31 Save the Date Next Webinar Wednesday, February 18th Next Live Meeting HFMA Annual National Institute (ANI) June Orlando, FL To request additional information or RSVP, reach out to Celina Kurani at 2

Price Transparency in Health Care. Report from the HFMA Price Transparency Task Force

Price Transparency in Health Care Report from the HFMA Price Transparency Task Force HFMA Price Transparency Task Force Therese Allison Consumer Peter Angood, MD CEO American College of Physician Executives