Nonprofit partners with payors to promote price transparency

Earlier this month, the nonprofit Health Care Cost Institute (HCCI) in Washington, DC, announced that it had brokered a deal with three large national health insurers to contribute claims data to an online consumer tool that will offer information about the price and quality of 300 to 400 health care procedures—a list likely to include selected medical imaging procedures.

Aetna, Humana and UnitedHealthcare agreed to contribute claims data, and since then, executive director David Newman, PhD, JD, has engaged a number of other national payors likely to join the initiative. If Newman has his way, providers, foundations and disease-specific associations will get into the act.

HCCI, under Newman’s direction, has been aggregating large amounts of health care cost data since the institute was founded in 2011, with financial support from the above-mentioned payors and the Kaiser Permanente organization. Its mission is to foster better understanding of healthcare cost drivers.

The institute produces twice-yearly healthcare cost tracker reports on aggregate trends for commercial and government payors, at both national and geographic levels, publicly available on its website.

Newman has an aggressive timeline, predicting the first tier of the consumer website to be live in November, and all three tiers completed January 1, 2015. Tier 1 will be a public patient web site that requires no registration, password, or user ID, and is geared to those patients without insurance or whose insurers don’t participate in the project.

“It will look very much like Edmunds.com in the sense that it will provide an average price that a specific buyer obtained for an episode of care or a procedure or a service that is discretely purchased,” Newman explains.

The site will feature the top 300 to 400 “shop-able,” “schedule-able” or “discretionary” services or episodes of care that consumers can shop for in both the inpatient and outpatient settings.

Tier II will require a user ID and provide more specific information relative to benefits design and where a patient stands with their deductible.

Tier III will allow large employers to customize the web site around healthcare human resources functions.

A Big-tent Approach

The HCCI database already is fairly rich with claims data that its payor underwriters have been contributing for research purposes, Newman says:  “We’ve taken in over 9 billion claim lines, and expect to have 10 billion by the end of the year.” A claim line represents each billable item, and the example Newman provided are the two individual claim lines represented by the vaccine and the needle used to inoculate a patient.

Ultimately, Newman aims to make HCCI the national repository of all public and private claims data. The institute is in the process of becoming a qualified entity under the Affordable Care Act, which would enable it to request and receive 100% of Parts A, B, C and D Medicare claims data, some of which it already possesses.

It has some catching up to do on the quality data, however, and it is on this front that HCCI hopes to engage providers, both physicians and hospitals.  “Providers could be working in stakeholder groups around the quality measures,” he suggests. “The measures will be applied across the entire data set.”

In other words, providers will not see one insurer identify them as an A and another identify them as a B, because the insurer does not have a large enough set of data. “The insurers have committed going forward to use our estimates of quality,” he says.

He is not ready to provide specifics on quality data for subsets of services, such as medical imaging, but he welcomes the input of the specialty. “Clearly, if radiologists want to reach out, we will make sure they have input into the decision-making process around those measures,” he says. “I don’t mean to pick on radiologists, because I’ve had no interaction with them, but it can’t be to frustrate.”

Goals and Mission

The ultimate goal of the website is to provide consumers with enough data at a granular-enough level that they can go online see what their out of pocket will be for, for instance, an upper respiratory infection if they go to their GP, a walk-in clinic or the emergency room.

The mission of the institute, however, is to research the impact of price transparency on competitive markets, pricing and how to properly and effectively engage consumers.

In January, HCCI announced its academic research partnership program with Yale University, Dartmouth University, the University of Pennsylvania, Northwestern University, the University of Michigan, the University of Minnesota, and MD Anderson. The institute also has partnerships with the Society of Medical Actuaries, MedPAC and CBO.

 “Number one, we are not the cost-control institute,” he emphasizes. “If we are spending more money and getting better care, that’s a good thing because there is value in those additional dollars.”

Nonetheless, to bend the cost curves, it’s necessary to know where costs are going up and then ask the appropriate questions: Are those justified increases in spending?

It is known that health-care cost increases are being driven by price increases, Newman says. “Historically, the government—regulators, policy makers, researchers—have not had good measures in the private sector of where costs are going up and where they aren’t. And it’s not universal. We know that in radiology, costs have been flat for years: the actual prices have been flat, utilization has been down.”

Newman lists a handful of factors that go into consumer decision-making about healthcare: Price, quality, convenience, physician referrals, physician experiences and family members. “There are probably more,” he says. “There’s not a single way that people should be making these decisions. It’s not just price and quality. Our hope is that we will put the information out there and people can use it they way they want to.”