Setting Realistic Expectations For Transparency Initiatives In Healthcare

By Ken Perez, vice president of healthcare policy, Omnicell, Inc.

Ken Perez

Transparency has been a popular concept for many years. While some would call it a buzzword, the Trump administration has made it a repeated theme of several of its pronouncements regarding healthcare reform.

Executive Order (EO) 13813, “Promoting Healthcare Choice and Competition Across the United States,” issued by President Donald Trump on Oct. 12, 2017, promoted transparency by aiming to “improve access to and the quality of information that Americans need to make informed healthcare decisions, including data about healthcare prices and outcomes.”

Five months later, at HIMSS18, Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma promised “to put patients at the center of the healthcare delivery system and empower them with the data they need to make the best decisions for themselves and their families.”

And on June 24, President Trump issued an almost 1,600-word EO, “Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First,” that has as its purpose “… to enhance the ability of patients to choose the healthcare that is best for them” by providing them with access to useful price and quality information, which enables them to find and choose low-cost, high-quality care.  Patients will be able to compare prices across hospitals. Posting of standard charge information will apply to all services, supplies, or fees billed by the hospital, and hospitals will be required to regularly update the posted information.

Moreover, this EO mandates that the Departments of Health and Human Services, Treasury and Labor produce a proposal to require healthcare providers, health insurance issuers, and self-insured group health plans to provide or facilitate access to information about expected out-of-pocket costs for items.

The Trump administration is thus taking a consumer-driven approach to try to reduce healthcare costs. As former Rep. Ernest Istook (R-Okla.), president of Americans for Less Regulation, said, “Everything is based upon the theory that consumers would wade through the data to decide whether to seek care from different hospitals or doctors and would pay less.”

But would they? Gallup surveys have shown that Americans are increasingly feeling overwhelmed with the abundance of information. Consequently, consumers take shortcuts to ease the burden. For years, newspapers have lamented that nobody reads their stories, with most readers simply looking at the headlines and skimming a few articles. CNBC reports that about half of the visitors to its website quit after reading the first three paragraphs of a story.

For healthcare, would adding detailed price and quality information—not to mention the requisite navigation of websites beforehand—to the calculus of their decision making be overwhelming? Even if one assumes individuals will access such information, studies show that many consumers prioritize patient-provider relationship, geographic location, appointment accessibility and language competency above clinical quality in their selection of a healthcare provider.

Just as Americans have resorted to shortcuts to deal with general information overload, there is a well-established shortcut for healthcare that they have embraced: CMS’s five-star ratings systems.

CMS has determined and published ratings between one and five stars for overall quality for Medicare Advantage (MA) plans since 2007, nursing homes since 2008, home health agencies since 2015, and hospitals since 2016. In addition, on Aug. 15, CMS announced that it will display star ratings for health plans offered on the Health Insurance Exchanges beginning with the 2020 Open Enrollment Period.

As evidence that consumers access and use MA star ratings in their selection of MA plans, in 2019, 74 percent of MA enrollees with prescription drug coverage (MA-PDs) are in plans with four or more stars, and this continues a multi-year upward trend. The vast majority of MA plans (90 percent) are MA-PDs.

While the Trump administration’s healthcare transparency initiatives are well-intentioned, they may constitute a case of the perfect being the enemy of the good. While admittedly high-level and simple, the five-star ratings systems are intuitive and have a proven track record of use by consumers in their healthcare decision making.

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