Three major health insurance players – Aetna, Humana, and UnitedHealthcare – have teamed up with the non-profit Health Care Cost Institute (HCCI) to launch an online portal where they will publish information on their healthcare prices. Scheduled to go live in early 2015, HCCI “expects additional carriers to participate in the near future” as many major insurers have already expressed interest in joining the initiative.
Price transparency has been a cause for concern throughout US healthcare reforms early stages, and this initiative by HCCI seems to be laying the foundation for other policy provisions to follow. The US has become notorious for its lack of price transparency, mostly because the majority of its patients and insureds are covered by private or government-funded insurance, meaning price data is disclosed from the public.
Providing public access to healthcare price transparency tools is expected to exert downward pressure on costs as consumers can make a more informed decision when obtaining medical care, while analysts will be able to study pricing trends under more detail.
Access to Price Data Through HCCI's Portal
HCCI hopes its online portal will provide healthcare consumers with “a single source of consistent, transparent healthcare information based on the most reliable data available, including actual costs, which only insurers currently have.”
The tool will grant access to aggregate pricing data from commercial health plans, as well as data on Medicare Advantage and Medicaid health plans, if however, each state agrees to participate in reporting. The PPACA has encouraged the publishing of government-funded healthcare cost data and this will be its first attempt to do so since the act was passed.
Cost data is set to be supplemented with information surrounding the quality of care administered and other useful data to help consumers combat the powers providers have over price setting. For those who choose to subscribe to the tool, they will have password-protected access to prices related to their individual health plans and medical care. HCCI has also indicated the willingness to help employers customize their own portals for use by their workforce.
While healthcare price transparency may be one step closer thanks to the HCCI and its partners, it remains clear that further initiatives need to be taken to turn healthcare into a multi-faceted industry, even when it comes to price setting. An Aetna spokesman said, “We believe that the healthcare system should be redesigned around the consumer. Delivering reliable, transparent cost and quality information to consumers is a major part of that process.”
What Next for Healthcare Price Transparency
Access to data is only one reform encouraging price transparency that may seem to solve a lot of the mysteries behind healthcare prices in the US. However, if coupled with multiple other reforms and policy provisions, the potential savings could be in excess of $100 billion over 10 years.
A report by the Center for Studying Health System Change titled Healthcare Price Transparency: Policy Approaches and Estimated Impacts on Spending hopes to quantify the potential savings from taking the necessary policy initiatives. The report proposes implementing the following initiatives to help continue along the path HCCI has set out:
1. Use state all-payer claim databases (ACPDs) to report hospital prices:
- Save up to $55 billion by using claims data to make employers more aware of price differences and realize savings from narrower provider networks and tiered benefits; by increasing pressure on high-price hospitals to reduce or justify their prices; and by informing the discussion of policy options for controlling costs.
2. Require electronic health record systems to provide prices to physicians when ordering diagnostic tests:
- Providers are often unaware of the cost of the services they are ordering. Providing cost information to physicians would enable informed, shared decision making about the relative value of discrete tests or treatments when developing patient-specific treatment plans, and could potentially save $25 billion.
3. Require all private health plans to provide personalized out-of-pocket expense information to enrollees:
- Reduce health spending by $15-20 billion by developing more effective patient-facing transparency tools and/or steeper incentives for their use.
By gaining the support of both payers and providers, healthcare price transparency can have a much larger significance towards a future healthcare landscape where quality drives cost, and not vice-versa. While the demand remains in the minds of the patients - employers, physicians, and health plan issuers can further influence healthcare spending if they make decisions based on what care costs.
That’s why PayerFusion uses price data reflecting provider and insurer payment histories when negotiating an individual’s medical claim. We see healthcare price transparency as a major tool towards containing an insured group’s medical costs and help us adhere to our goal of achieving maximum savings for insurance payers. Learn more by contacting us here or subscribing to our Health Insights monthly newsletter here.