All Quiet on the Transparency Front: Fees Still a Mystery and Hospital Quality Data Spotty

What’s a consumer to do?

A similar relation exists between large employers and institutional providers (hospitals.)

The lack of cost transparency stands in the way of health cost control, as this previous SmartHR blog post says, because it makes plan members unable to see prices before services are actually rendered, and impossible for individual plan members (on whom plan sponsors shifted risk with the consumer-driven-health (CDH) model) to budget in advance.

Employers and members at consumer-driven plans would gain needed insight if:

• full price information on each and every provider were available; and
• there were comprehensive quality ratings on each and every provider.

How far away are we from that? Leapfrog Group CEO Leah Binder says insurers and providers have “a very, very long way to go to. They’re not keeping pace with other industries on openness,” she said, adding that “other industries are so far ahead [on transparency] it’s astonishing.”

I spoke to Binder yesterday about employers and health purchasing.

In a perfectly transparent world, employers could:

• verify that they got high-quality services whenever high rates were paid;
• avoid paying high prices for low-quality services; and
• seek out low-cost-for-high-quality opportunities.

In this clip, Binder suggests that employers can use Leapfrog’s website to steer employees to the best care.

The Leapfrog Group teams with very large employers to persuade hospitals to post the cost and quality information they once shared only with large purchasers such as Aetna, CIGNA and Medicare. Leapfrog bases its ratings on factors including mortality, infection rates and structural management systems.

Binder suggested that most employers can bring value-based purchasing to their health plan in at least two efficient ways.

• A modest change to the plan document can reward members for using high performance providers. Members who use quality-accredited facilities get their deductibles waived. That’s simple for the plan and it has significant steering capabilities.
• Computerize drug ordering and management systems. This would have benefits for cost/efficiency as well as quality of care (because mismanagement of drugs is the most common cause of injuries from care).

Some Facts Are Still Untouchable

But when I checked the ratings for hospitals in my area on the Leapfrog Group’s website, I found that most were not rated on the site, because the group depends on the hospitals themselves to voluntarily submit data. They can opt out.

Photo: Todd Leeuwenburgh

Can it be that Leapfrog — which appears to me to be an objective source of provider quality ratings on outcomes and management — is being stymied because providers can stifle news unbecoming to them?

Now I can’t tell you I know exactly why each hospital wouldn’t report outcomes to the public through Leapfrog; perhaps we can just note how the incomplete database shows the limits of the concept until providers add more data.

It might possibly indicate also that employers are underestimating their own clout as buyers and they need to assert themselves more in direct negotiations with institutional providers, Binder said. Employers have a right to more data than they think they can get now, she said. They’d do better to assert their own interests instead of trusting that insurers will do it for them, she said.

Employer-purchasers need to stop relying on insurers to solve their problems with health care. [Employers] can not delegate away this problem; they have been delegating too much onto insurers and health plans [their interest in doing so is not identical to employers and insurers will only do so much for employers]. But the bottom line is you still have the same providers; we’re all paying for the same hospitals; so the employer is the fundamental place the whole thing has to start.

Employer’ groups need to insist on advance fee list, in some form or another, from the hospitals. This is especially important for plan members in [CDH] plans, where customers care about how much things cost.