Center for Improving Value in Health Care
Mar 6, 2013 | 2 comments | Posted by CIVHCAdmin
Consumer Engagement, Controlling Costs, Triple Aim, All Payer Claims Database
Blog also featured in Health Policy Solutions.
An email with the subject line “Patients Prefer High Cost Care” came through my inbox a few weeks ago. It was spurred by a recent study in Health Affairs revealing that patients would typically select a higher cost service like an MRI over a lower cost CT scan even after being educated on the marginal difference between the results.
As a part of CIVHC’s Colorado All Payer Claims Database team, I’m working to develop publicly available consumer information on cost and quality for health care services. The primary purpose of the patient focused information (planned for release by the end of 2013), and the Colorado APCD in general, is to provide transparent health care data to support driving the market towards low cost, high quality care.
So a study showing that insured consumers would select the most expensive procedures even when provided with transparent information about their effectiveness is disheartening to say the least.
Then I stopped and asked myself - if I were given those same two choices, would I have answered differently? I’m not sure I would have. Before my boss reads this and I have to start looking for another job, I’ll tell you why.
As a patient fortunate enough to have insurance, I equate it to being given the choice between a BMW and a Honda, but not having to pay for either one. I know because of my experience working in health care, that I am essentially “paying” for my health care, as is my employer. But even though premium costs continue to rise and I’ve had to assume more of the costs over the years, with a low deductible plan, I don’t have a direct out of pocket incentive to make a smart decision. So why not choose a BMW (MRI) even though I know it’s a luxury and will get me where I need to go just like the Honda (CT scan)?
The Health Affairs article points to several barriers preventing patients from wanting to consider costs when making health care decisions including wanting the best care regardless of price and “deserving” the best because they pay every month for insurance. Other research shows that more education is needed because most consumers don’t realize variation in health care prices exists, and even when they are aware of the difference, they think the higher priced services must inherently be better.
National exposure like the recent JAMA article demonstrating a nearly $100,000 price difference for hip surgeries and the Time Magazine piece identifying exorbitant price mark ups certainly help in the effort to educate consumers that unnecessary variation in health care costs exists. And thankfully health care cost and quality information is becoming more available as other states across the country are developing APCDs like cohealthdata.org.
However, until patients and providers are both incentivized to select the lowest cost, highest quality services, providing information may not be enough to see the changes that our system needs. Payment reform programs like bundled payments and Accountable Care Organizations begin to align incentives on the provider side to lower cost and improve quality. Provider engagement is essential since many patients rely on the expert advice of their physician, but patients have to be at the table ready to make a smart decision too. The trend towards high deductible employer-based plans is increasing the number of consumers with a financial incentive to choose high value providers and services. But only a handful of programs like Engaged Benefit Design here in Colorado provide direct financial incentives to patients to be wise consumers in partnership with their doctor.
I believe we’ll reach the Holy Grail and consumers will truly drive the market when three essential elements come together: transparent data is readily available, insurance benefits and provider payments put financial responsibility on both patients and clinicians, and widespread education makes it a social norm for consumers to shop wisely for health care services.
What do you think it will take to get people to make smart health care decisions? I welcome your ideas.
About the Author: Cari Frank is CIVHC's Director of Communications. Contact her at firstname.lastname@example.org.
This blog also featured in Health Policy Solutions.
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