Improving Price Transparency: A Review of Public Policy and Private Initiatives. Invitational Learning Session April 8, 2013

Transcription

1 Improving Price Transparency: A Review of Public Policy and Private Initiatives Invitational Learning Session

2 Housekeeping: Please Note the Following You must dial into the conference line and log into the webinar to access both audio and visual of the presentation All lines will be placed on mute during the presentation Any questions can asked through the chat box on the Adobe Connect webinar platform Note questions will be saved for the end While we will attempt to address all questions, we may not have time to respond to all Please CPR staff with any unanswered questions : adilweg@catalyzepaymentreform.org A copy of the presentations will be available on the web at: and

3 Agenda Welcome and Introductions Jennifer Eames Huff, Director, Consumer-Purchaser Disclosure Project and Director of Advancing Policy, Pacific Business Group on Health Background on Price Transparency Elizabeth Bailey Program Implementation Leader, Health Care Incentives Improvement Institute State Report Card on Price Transparency Laws Emilio Galan Special Initiatives Analyst, Catalyst for Payment Reform Private Sector Initiatives Andrea Dilweg Program Director, Catalyst for Payment Reform Influencing Price Transparency in California: A Purchaser Perspective Jennifer Eames Huff, Director of Advancing Policy, Pacific Business Group on Health Questions and Discussion

4 Questions and Discussion FOR MORE INFORMATION VISIT: Jennifer Eames Huff Elizabeth Bailey CONTACT: Andrea Caballero Dilweg Emilio Galan

5 About the Consumer-Purchaser Disclosure Project The Consumer-Purchaser Disclosure Project is a coalition dedicated to improving the quality and affordability of health care in America for consumers and health care purchasers. The project s mission is to put the patient in the driver s seat to share useful information about provider performance so that patients can make informed choices and the health care system can better reward the best performing providers. The coalition is comprised of leading national and local consumer organizations, employers and labor organizations. The Consumer-Purchaser Disclosure Project is funded by the Robert Wood Johnson Foundation along with support from participating organizations. For more information go to Or Contact: Jennifer Eames Huff Director Consumer-Purchaser Disclosure Project jeames@pbgh.org

6 HEALTH CARE INCENTIVES IMPROVEMENT INSTITUTE Not for profit whose mission is to significantly increase the affordability and quality of healthcare in the US Supports a variety of community-based payment reform activities, including Bridges To Excellence and PROMETHEUS Payment Has developed a number of operational solutions to accelerate the implementation of value-based payment programs

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8 CONSUMER COSTS ARE RISING On average, premiums for family coverage have risen 62% since They now account for 20% or more of the average American family s income 1 Deductibles have more than doubled 1 The rate of increase of average family premiums has exceeded the consumer price index and is chiefly responsible for the stagnation of family incomes 2 1. Schoen, et al. State Trends in Premiums and Deductibles, : Eroding Protection and Rising Costs Underscore Need for Action. The Commonwealth Fund, Kaiser/HRET Survey of Employer-Sponsored Health Benefits,

9 THE (LACK OF) AFFORDABILITY OF HEALTHCARE 54% of middle class families in the US can no longer afford health insurance (was 15% thirty years ago) 3 Health care expenses are crowding out most other discretionary spending, and reducing employment in schools and other social services 4 3. Altarum Center for Sustainable Health Spending Symposium: Sustainable Health Spending and the US Federal Budget July 24, de Brantes, Francois. The Incentive Cure, 2013.

10 POTENTIAL BENEFITS OF TRANSPARENCY Without transparency of price information, consumers are getting the wrong message they often equate higher cost with better quality 5 Transparency increases the likelihood that consumers will choose the highest value options 6 Allows consumers to choose a doctor who provides effective and cost-efficient care 7 Helps providers evaluate appropriate care 7 Allows employers and health plans to design cost-based benefit plans 7 5. Sommers, et al. Focus Groups Highlight That Many Patients Object To Clinicians Focusing On Costs. Health Affairs. February Hibbard, et al. An Experiment Shows That A Well-Designed Report On Costs And Quality Can Help Consumers Choose High- Value Health Care. Health Affairs. April This Costs How Much? an RWJF Aligning Forces for Quality initiative

11 PAIRING PRICE WITH QUALITY INFORMATION Price and quality information must be tied together and easily accessible by and relevant to the consumer Episode of Total Knee Replacement A B C Episode Price $18,500 $20,500 $25,000 Complication Rate 10% 2% 5% Co-pay $1,850 $2,050 $2,500

12 WHAT IS THE STATE OF PRICE TRANSPARENCY TODAY? State 34 states currently require reporting of hospital charges or reimbursement rates Some states operate consumer-facing transparency tools Federal Medicare provides an online tool that calculates expected out-of-pocket drug costs for beneficiaries Medicare operates Hospital Compare and Physician Compare Private-Sector Transparency tools have been developed by a number of national health plans and other commercial vendors These tools vary in functionality and availability Health plans, commercial vendors, states and the federal government have all attempted to address price transparency

13 PROJECT GOAL The objective of this project is to examine whether state laws in existence today provide assurance that consumers will have adequate access to health care price information Unless the private sector steps forward and provides all of the health care price information consumers need, today s laws are too narrow in scope

14 CATALYST FOR PAYMENT REFORM (CPR) CPR is an independent, non-profit corporation working on behalf of large employers and public health care purchasers to catalyze improvements in how we pay for health services and to promote higher-value care in the U.S. 3M AT&T Bloomin Brands The Boeing Company CalPERS Capitol One Carlson, Inc. Dow Chemical Company ebay, Inc. Equity Healthcare GE Group Insurance Commission, MA The Home Depot Marriott International, Inc. Ohio Medicaid Ohio PERS Safeway Inc. South Carolina Medicaid TennCare Verizon Communications Wal-Mart Stores, Inc.

15 BEST PRACTICE: NEW HAMPSHIRE

16 BEST PRACTICE: MASSACHUSETTS

17 THE REST OF THE PACK: 2 As, 5 Bs, 7 Cs, 7 Ds, 29 Fs

18 1. Comprehensive Review of State Legislation 50 state review of legislation (including enacted bills, acts, and statutes) related to price transparency Included a previous NCSL review, state legislation websites, WestLawNext databases and other resources Reflects all relevant state legislation passed from 1960 today Most comprehensive review to date

19 2. Establish Criteria for Evaluating Legislation Scope of Price Charge Actual Average Reimbursement Scope of Services All services Only IP or OP Only Most Common IP or OP Scope of Providers Providers Hospitals Physicians Surgical Centers FOUR LEVELS OF TRANSPARENCY: Reported to the State Available Upon Request Public Report Internet Website

20 Establish Criteria for Evaluating Legislation Provision for publishing a report to the state only Scope of Price Legislated (three levels, can only have 1 score out of 3) Paid Amounts and Charges 4 Paid Amounts 3 Charges 1 All IP and OP 3 Scope of Services Legislated (three levels, can only have 1 score out of 3) All IP or OP 2 Scope of Health Care Providers Legislated (three levels, can only have 1 score out of 3) Most common IP or OP 1 All hospitals and providers 3 All hospitals or providers 2 Susbet of hospitals/providers 1 Ability for patient to request pricing information prior to rendering of services 2 Scope of Price Legislated (three levels, can only have 1 score out of 3) Paid Amounts and Charges 4 Paid Amounts 3 Charges 1 All IP and OP 3 Scope of Services Legislated (three levels, can only have 1 score out of 3) All IP or OP 2 Scope of Health Care Providers Legislated (three levels, can only have 1 score out of 3) Most common IP or OP 1 All hospitals and providers 3 All hospitals or providers 2 Susbet of hospitals/providers 1 Provision for publishing a public report on pricing information 2 Scope of Price Legislated (three levels, can only have 1 score out of 3) Paid Amounts and Charges 4 Paid Amounts 3 Charges 1 All IP and OP 3 Scope of Services Legislated (three levels, can only have 1 score out of 3) All IP or OP 2 Scope of Health Care Providers Legislated (three levels, can only have 1 score out of 3) Most common IP or OP 1 All hospitals and providers 3 All hospitals or providers 2 Susbet of hospitals/providers 1 Provision for posting pricing information on a public website 5 Scope of Price Legislated (three levels, can only have 1 score out of 3) Paid Amounts and Charges 4 Paid Amounts 3 Charges 1 All IP and OP 3 Scope of Services Legislated (three levels, can only have 1 score out of 3) All IP or OP 2 Scope of Health Care Providers Legislated (three levels, can only have 1 score out of 3) Most common IP or OP 1 All hospitals and providers 3 All hospitals or providers 2 Susbet of hospitals/providers 1 1 (weight) Subtotal: Total: Grade: A

21 3. Provide Resources to Legislators & Others 1. Report Card 2. Reference Table

22 THE GRADES

23 REFERENCE TABLE: THE WORK *For Illustrative Purposes Only

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25 EXAMPLE: MASSACHUSETTS (1) Data Collection: Previous Reports MA State Legislature website WestlawNext Database

26 For all relevant laws: Massachusetts General Laws 12C 10 Massachusetts General Laws 12C 16 Massachusetts General Laws 6A C 16K Massachusetts General Laws 111C 228 Review of reports & websites (2) Reference Table (3) Simplified Table (5) Report Card (4) Grading Sheet

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28 IMPLICATIONS OF STATE LEGISLATION State-wide laws not cutting it, but may evolve Other factors at play price transparency alone won t solve the problem Lack of competition among providers Consolidation drives up prices Information alone does not change behavior Reform of payment methods needed Benefit designs that help consumers select highest-value providers How you can use the data you have Health plan tools improving rapidly Healthy competition from independent vendors Use of CPR s Health Plan sourcing, contracting and management tools available at

29 HEALTH PLAN SOURCING, CONTRACTING AND MANAGEMENT OPPORTUNITIES Health Plan RFI questions on Price Transparency Availability of transparency tools that facilitate comparison by cost and quality in a single, user-friendly platform Proportion of plan spend included in tool Proportion of providers withholding price information Willingness of health plans to allow purchasers to share data with third-party vendors RFI:

30 HEALTH PLAN SOURCING, CONTRACTING AND MANAGEMENT OPPORTUNITIES Health Plan Model Contract Language Provisions on Price Transparency Quality and efficiency Price Third-party data use Consumer tools and incentives Information available to Plan Participants: Provider background Quality performance Patient experience Volume Efficiency Price of services Meet Specifications in CPR s Comprehensive Specifications for the Evaluation of Transparency Tools New! Model Contract: del.pdf

31 HEALTH PLAN SOURCING, CONTRACTING AND MANAGEMENT OPPORTUNITIES Health Plan User Group Metrics on Price Transparency Proportion of plan spend represented by the services included in plan s transparency tool. % of professional claims and hospital claims run through contracts that limit sharing price and quality information with Plan Participant Full disclosure of prices to facilitate cost comparisons by Company or any third-party vendor contracted by Company. HPUG Information:

32 STIMULATING BETTER TRANSPARENCY TOOLS 5 main categories: Scope Utility Accuracy Consumer Experience Data Exchange, Reporting and Evaluation The Specifications are: Comprehensive Organized into Core and Expanded Based on capabilities that exist today Specifications: y_specifications.pdf

33 A CALL TO ACTION: PRIVATE AND PUBLIC CPR s PRICE TRANSPARENCY ACTION BRIEF CPR members call for increased price transparency in healthcare Promoting transparency is a multistakeholder endeavor requiring coordination across the industry Price Transparency is only a part of bending the cost curve in health care Action Brief: ice_transparency.pdf

34 Influencing Price Transparency in California: A Purchaser Perspective Jennifer Eames Huff, MPH Director, Advancing Policy

35 The Pacific Business Group on Health The Pacific Business Group on Health helps employers improve the quality of health care and limit health care cost increases for their employees. Our 50 members spend 12 billion dollars annually to provide health care coverage to more than three million employees, retirees and dependents in California alone. Our vision is of a health care system transparent about the quality, cost and outcomes of care, where consumers are motivated to seek the right care at the right price and providers are incentivized to offer better quality, more affordable care. PBGH

36 PBGH Members PBGH

37 Background For years certain California health care systems, most notably Sutter, have used market power to drive up prices. These systems have also used market power to impede transparency initiatives. Gag clauses are contract provisions providers require in contracts with plans that prohibit the use of claims data to inform purchasers and consumers without permission. PBGH

38 PBGH

39 Pricing Transparency in California: Old School Office of Statewide Health Planning and Development Payers Bill of Rights (AB 1045 and AB 1627) Common Surgeries and Charges Comparison PBGH Hospital Value Index PBGH

40 PBGH

41 PBGH Hospital Value Index Private payers pay about 40 percent more than they should to make up for both shortfalls from the uninsured and government reimbursement programs and hospital profits. There are wide and unexplained regional differences in what hospitals are charging private insurers and patients. For example, the average price paid to hospitals in the Sacramento region was 30 percent higher than the statewide average for the same mix of hospital services even after adjusting for wage differences. Across the state, the markup for some hospitals is about five times that of others. These differences would appear to be due primarily to variation in hospital pricing policies related to market conditions. They cannot be explained by charity and indigent care or by teaching status. Report-exec-sum_FINAL.pdf PBGH

42 Pricing Transparency in California: SB 751 SB 1196 Next Generation California Healthcare Performance Information System (CHPI) Cost Calculator Tools (e.g., Castlight, Thomson- Reuters, Health Plans) Benefit Redesign PBGH

43 Public Policy in California SB 751 After January 1, 2012, bars contract provisions between hospitals/facilities and health plans that restrict sharing cost ranges and quality with enrollees Hospitals/facilities have opportunity to review at least 20 days prior Post on website: "Individual hospitals may disagree with the methodology used to define the cost ranges, the cost data, or quality measures. Many factors may influence cost or quality, including, but not limited to, the cost of uninsured and charity care, the type and severity of procedures, the case mix of a hospital, special services such as trauma centers, burn units, medical and other educational programs, research, transplant services, technology, payer mix, and other factors affecting individual hospitals." SB 1196 After January 1, 2013, bars contract provisions between all providers that restrict sharing claims data with qualified entity Qualified entities under Affordable Care Act can receive Medicare claims data to compile with Medicaid or private sector claims PBGH

44 California Healthcare Performance Information System (CHPI) CHPI is a non-profit, public benefit corporation whose goal is to serve as a trusted source of healthcare data to measure performance, educate the public and drive improvements in healthcare in California PBGH is staffing CHPI through a Professional Services Agreement, with a 3 year term Designated as a Medicare Qualified Entity PBGH

45 CHPI Key Objectives Create and administer a multipayer claims database aggregate, score and report data supplied by multiple California health plans, Medicare, and other data suppliers Produce performance ratings of physicians, medical groups, hospitals and other providers Educate the public about performance information and support policies to reduce barriers to such information PBGH

46 PBGH Cost Calculator Evaluations 2006: Initial cost calculator analysis 2011: Third party cost calculator evaluation Castlight and Thomson Reuters Low interest in group purchase, but drove rapid improvement in health plan tools 2012: Health plan shopping services Methodology: used member log-ins Nine use cases for apples-to-apples comparisons Benchmarked to third party tools Dimensions: Shopping functionality Comparison of hospital and physician fees Cost comparison across settings as alternatives Cost comparison for treatment alternatives and/or other options Shop for medications PBGH

47 High-level Findings United Healthcare: High Cigna: Medium-High Anthem: Medium Aetna: Medium HealthNet: Low PBGH

48 Dissemination of Findings Individual plan narrative analyses with screenshots sent to plans for review Sent letters to plans from PBGH User Groups: Address weaknesses and deficiencies in cost calculator Incorporate all providers allowed fees per SB751 Requested response Sent to PBGH members, posted to website: Summary grid comparing plans grades across dimensions Individual plan narratives Tip sheet for employees More at: PBGH

49 Example of Individual Plan Narrative PBGH

50 Example of Individual Plan Narrative PBGH

51 Overcoming Barriers to Pricing Transparency Require all-payer, all-provider claims database including Medi-Cal, commercial health plans, and self-funded employers to submit data (with paid amounts) Litigation to prevent pricing based on undue market power Monitoring of the degree and impact of market concentration and anti-competitive actions Employer action to educate and incentivize employees to choose high-value providers PBGH