With health care costs continuing to rise and employees taking on an ever-growing share of costs, it’s no wonder the market for price transparency and consumer-oriented tools and solutions continued to grow in 2013. Well over a dozen independent vendors and all the major health plans now offer some type of price transparency tool or “solution” for employers and purchasers, and more join their ranks each year, aided by venture capitalists’ investments.
Policymakers are jumping on the price transparency bandwagon too; on the heels of the release of the HCI3/CPR 2013 Report Card on State Price Transparency Laws, many state legislatures took up the issue of price transparency in 2013 and attempted to pass better laws to empower consumers. But do today’s products help consumers find comprehensive and comprehensible information on health care costs and quality? Are employers finding them they useful—and usable—when trying to educate and empower consumers with the hope of reining in health care spending?
Last November, Catalyst for Payment Reform—a nationwide nonprofit coalition of large employers and other health care purchasers–issued a call to action to health plans, providers, and policymakers. The ask? Help support greater price transparency! Our Statement outlined steps plans and providers could take, including sharing claims data and removing gag clauses. In addition, we issued Comprehensive Specifications for the Evaluation of Transparency Tools, thereby offering employers and purchasers general guidance on features tools should have if they’re to be useful for consumers.
This fall, CPR took a closer look at the more established products in an attempt to answer the question: Are these tools and solutions evolving to become more useful for consumers and employers? We examined fee-based online tools and telephonic solutions available from independent vendors for purchasers and employers, as well as the tools the major national health plans offer freely to their members. We summarize our findings in a new report.
Signs Of Progress
The good news: Most of the tools and solutions we examined are much improved from the products we had just a few years ago, and we have made progress when considering the statement we issued just one year ago. Most products today have physician and hospital information in one place, they have at least some information on both price and quality, and they offer the ability to compare providers by price and quality. Some allow consumers to understand the price for a full episode of care, such as the stages of pregnancy, including delivery. Today, many products estimate both the full price of care as well as consumers’ out-of-pocket costs.
CPR’s 2013 National Scorecard on Payment Reform found 86 percent of plans reported having a cost calculator tool that shares the member’s out-of pocket costs. This is a major step forward. Seven years ago when the California HealthCare Foundation released a report on price transparency products, most did not display out-of-pocket costs. The price estimates today’s products offer to consumers may also be more reliable; most use some form of claims data, as opposed to regional or other averages.
More good news: In recent conversations with several plan and price transparency vendors, many noted that gag clauses were becoming less of a concern, thereby helping consumers gain more accurate price data. Efforts by employer and consumer coalitions to shine light on this issue have been quite helpful. And providers themselves are becoming more supportive of the very concept of transparency. For example, the Healthcare Financial Management Association has a new task force devoted to the subject.
But some of these products need work before they meet the needs of consumers. Some fall short when it comes to how well they help consumers understand value: high-quality care at the lowest cost. The best tools and solutions help consumers understand that more expensive care doesn’t mean better care, and that more efficient care can be of great benefit to patients—it can indicate fewer unneeded tests and procedures and less time wasted in the doctor’s office. The best tools and solutions will help consumers truly understand the meaning of value, why they should care, and how they can identify high-value providers.
For such products to help rein in health care spending, consumers also need to understand their out-of-pocket costs, the full costs of their care, and why both matter. From the perspective of employers and other health care purchasers, better tools will show a consumer both the full price and their share of cost and explain why both are important in the long term. Similarly, to help consumers and employers or other purchasers save money, the best tools and solutions should help steer consumers away from unneeded care and toward lower-cost alternatives. With public education campaigns like Choosing Wisely gaining strength, tools and solutions can build on this messaging to deliver timely prompts.
Unfortunately, the familiar phrase “if you build it they will come,” does not apply to price transparency products. CPR’s 2013 National Scorecard on Payment Reform revealed that 98 percent of health plans say they offer cost calculator tools, but only two percent of patient members use them. The best tools and solutions will have a strong consumer engagement strategy that encourages consumers to use the tool or service on an ongoing basis. Fortunately, several of the tools and solutions we looked at are developing—or have already deployed—engagement tactics based on leading consumer behavior research. Otherwise, consumers have little incentive to shop based on price once they meet their deductibles and realize their employers are now picking up the tab.
Products need to be useful to consumers, but at the end of the day they also must be easy for purchasers and employers to deploy and maintain. To support employee health, many large employers and purchasers already have contracts in place with different vendors, ranging from wellness vendors to pharmacy benefit managers (PBMs). Health plans and price transparency vendors need to be flexible and cooperative, willing to work with other vendors to deploy their product seamlessly, from both the employer and employee perspective. For health plans, this also means allowing self-funded employers and purchasers to take their own claims data to third-party vendors when they desire to work with another entity to create a transparency tool or solution. CPR is hearing that more plans are allowing their self-insured customers to do so. Many of these arrangements are confidential for now, but large employers anecdotally are reporting movement. Our large employer and purchaser members been steadily pushing this agenda for years; It is rewarding to hear about examples of progress.
The Path Ahead
So we will greet 2014 having made progress, with price information more accessible and tools steadily becoming more robust. But there is more work we can all do. First, employers, purchasers, and consumers need to continue to push plans and providers so that those final hold-outs allow claims and other payment and price data to be shared unencumbered by gag clauses. We know also that state legislatures can do more to make both quality and price information publicly available. CPR recognizes organizations like the National Conference of State Legislatures (NCSL) and the National Academy of State Health Policy (NASHP) for helping them along, as well as organizations like the Health Care Incentives Improvement Institute (HCI3) that have created and shared model legislation.
If we really want to help consumers make intelligent decisions about both quality and price, health plans and independent vendors need to accelerate their conversations with employers and consumers and continue to work hard on products that already show lots of promise.