By Geoff Bretches, CHFP, CRCR, CMPE
My high school algebra teacher used to hand out test grades by name apishly calling out the grade you received on the test for all to hear and for your mind to replay all week long until the next test. PC? Are you kidding? At the time algebra was new to me and I would hold my breath hoping I did not hear what others were hearing before me. “Mr. J. A big “flagger” for you!” Flagger was his cherished way of saying you failed and you received an “F” for a grade on that test. It was negative motivation for doing better the next time and going forward. It worked for me. I can’t speak for others. (Perhaps in another post I will highlight Mr. Cates my college Business Calculus teacher who motivated through humor. That worked very well for me too.)
The recently published “2015 Report Card on State Price Transparency Laws“, produced by the Catalyst for Payment Reform – Health Care Incentives Improvement Institute, gives a “flagger”, a bold “F”, to all but three US states for having legislation in place requiring measures to ensure price transparency in healthcare services. The study grades states on the presence of legislation requiring health care pricing be made public through public websites and the quality of the claims data behind the information, specifically, were all-payer claim databases used or were databases made up of just provider reported claims data. The study looked for not only legislation but implementation efforts and results.
It is shocking to realize that the list of “F” grades is 1,566% times greater than the non-F grades. 3 states earned either A or B, with all the others flagging. New Hampshire received the only “A” in the study with both Colorado and Maine receiving “B” grades. Without listing the other states just think of the name of your state and if it is not New Hampshire, Colorado, or Maine, there is a lot of work to do toward achieving price transparency.
“It is time for healthcare providers/systems to bring solutions to the table.”
While I lean toward the side of less government intervention in the marketplace, I realize that sometimes the players and healthcare itself make the game extremely hard and confusing for the public. We see those results in rising medical costs, rising bad debt, increasing health insurance prices, the existence of medical debt bankruptcy, and the list goes on. The causes of this confusion are business contracting rules which the players use to protect themselves and their interests. We cannot fault business for being conducted this way and in any other marketplace we would expect the same. However, in the healthcare space these rules cause great price differences and shadowy price information for consumers.
The Report Card Report discusses the business rules/contracting measures that cause these problems. It goes into detail explaining the use of non-disclosure agreements, aka “gag clauses,” Anti-tiering and anti-steering clauses, most favored nation clauses, as well as trade secret protection measures. (See report for more information on these contractual measures.” It also outlines the best transparency legislation content/angles that can fight against the fog and increase visibility for the public healthcare consumer.
I mentioned before that I lean toward private resolution of industry problems and less government intervention. I believe that the marketplace, through real competition, innovation, and smart use of technology can correct the problems we are experiencing in price transparency. Mandating government websites can be a catalyst for transparency, but government healthcare website success has been questionable as of late, (I refer to the ACA website roll-out. In fact, the private sector was employed to straighten the whole thing out!) It is time for private players to bring the solution to the table. It is time for healthcare providers/systems to bring solutions to the table. Walmart crafted a new way of offering lower prices while still making a profit. The Oakland A’s nearly made the world series in 2002 working smarter and changing the way baseball was managed in the front office. Incidentally, baseball changed forever because of the efforts and the new approach of Billy Beane, A’s General Manager.
I applaud those in the private sector who are working to increase price and quality transparency through innovative measurements and creative use of technology. I recently had coffee with a fellow Alumni from Vanguard University in Southern California who has been working on such an effort. He and his partners have produced a web-based tool, mpirica, for the public to research quality hospitals for specific needed services, including average cost measurements for each hospital. The tool has additional uses for high quality-low cost providers to strengthen their market approach. This is a great example of a private solution addressing a public problem.
Every day we have the chance to make our world a better place. Hats off to mpirica, IBM Watson, physician entrepreneurs providing low-cost alternatives, medical researchers, and many others. While grades range from A to F we all have the chance of making the A grade we desire. We have to think more, listen more, collaborate more, and not give up or give in. The next great innovation, process, technology, tool is waiting to be discovered, understood, refined, and produced. I hope you make yourself a part of a new great thing, a part of the solution to great societal problems.
Have a great day!
Bretches Consulting 