One of the most difficult goals of health reform is price transparency -- and one of the biggest uncertainties is whether more transparency will necessarily lead to higher value.
Researchers and insurance managers will consider that question of transparency and value during a session at America's Health Insurance Plans' Operations and Technology Forum in Chicago Nov. 18-20, and in related sessions a diagnosis of the deeply troubled fee-for-service system and the consumer angst and misaligned incentives it has wrought.
After breakfast on Tuesday November 19, Time magazine journalist Steven Brill offers a trip through the annals of consumer healthcare payment, based on his report "Bitter Pill: Why Medical Bills Are Killing Us."
Brill's anecdotes of obscure charges, absurdly high markups and endless bureaucracy resonated with million of readers, and the Senate Finance Committee called him in to testify this past June. Brill's mission in the piece -- to ask (if not entirely find out) "Why are the bills of high?" -- very much mirrors as movement within health reform to empower patients to comparison shop and to demand explanations for billing or even informally negotiate, rather than just accept exhorbitantly high bills and the sometimes ensuing personal bankruptcy.
As an example of the bitterness, Brill opens his piece with the story of a 42-year-old man from Ohio diagnosed with non-Hodgkin's lymphoma and seeking treatment at a leading cancer center: $83,900 due upfront for a treatment plan and initial course of chemotherapy, $283 for a chest X-ray, $1.50 per acetaminophen tablet and a 400 percent markup for the monoclonal antibody Rituximab.
Then there's the $21,000 heartburn bill for a 64-year-old Connecticut woman who had chest pains, was taken by ambulance to a hospital only to be told she had indigestion -- and billed $995 for the ambulance ride, $3,000 for the doctors and $17,000 for the hospital.
And the backdrop is $2.8 trillion in annual healthcare spending, some $750 billion of which is unnecessary by some estimates.
Some advocates in the movement to reduce the wasteful health spending are relying on patients informed of their costs and treatment options to help make healthcare markets for functional, deliver better care and control costs. But there skeptics who argue that accountability and value-based care won't necessarily increase price transparency for consumer out-of-pocket costs, and others think pay-for-value isn't going far enough fast enough.
After Brill on Tuesday, a panel will address that question with a number of perspectives, from Giovanni Colella, MD, CEO of Castlight Health, a digital health startup that lets patients comparison shop for common hospital procedures, Judith Hibbard, a University of Oregon health researcher, and George Lenko, the director of WellPoint's National Network Initiatives.
Absent full transparency, an approach that WellPoint started this past summer is reference pricing -- essentially letting large group employer members name a price for certain procedures.
Partnering with Castlight Health, WellPoint offers employers the option to set a benefit limit or "reference price" for specific types of services and then search to find providers offering the services at prices within their range.
"While some companies are evaluating whether to continue to offer health benefits, the most innovative of them are looking for new solutions to control healthcare costs, while still preserving employee choice and flexibility," Castlight CEO Colella said in a media release in June.