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Health Care Price Transparency

Added on: 10/02/13 by G. Alan Kurose, MD

I am writing to provide public comment to OHIC regarding Health Insurance Bulletin 2013-1, entitled “Health Care Price Transparency”.    I offer comment from the perspective of 20 years of primary care practice experience, and my current role as CEO of Coastal Medical.

Price transparency is essential to meaningful transformation of the health care delivery system in Rhode Island.  Awareness of the price of medical care – on the part of both providers and consumers – is a necessary condition for improving the affordability of health care.  I applaud OHIC for taking action to compel health insurance issuers to disclose price information to health care providers, and ask OHIC to consider including language in the bulletin that specifically allows health insurance issuers to disclose that same price information directly to consumers.

Providers at Coastal Medical are at a crossroads.  The state and national trajectories of rapidly rising healthcare costs tell us that the status quo in healthcare is not sustainable.  We have addressed our performance in measurement and improvement of quality.  We have remedied some of the shortcomings of our provider-centric system, and established a more patient-centered process of care.  We have embraced a proactive approach to population health, and are engaging patients to pursue healthy lifestyles and partner with us in managing chronic disease.  We are starting to learn how utilization of services, price of services, and the incidence and severity of disease might interact with choice and benefit design in a population to determine the total cost of care.  Now we have reached the point where lack of information about price is impairing the ability of providers and patients to make informed decisions.

Time magazine’s recent “Bitter Pill” cover story shines a bright light onto the financial mine field confronting patients forced to make urgent choices about healthcare without information about out-of-pocket expenses.  The poignant stories of these individuals ravaged by disease and then plagued by financial ruin beg the question of how anyone can reasonably argue that some greater good is being served by keeping patients in the dark about pricing.  Some have said that making price data available without quality data will lead consumers to rush to the lowest cost provider.  An article in this month’s Health Affairs punctures that myth, citing evidence that consumers in fact take high price as a surrogate for quality when quality data is not available, and in that circumstance actually tend to seek care where the cost of care is higher.  I believe there is no justification for a paternalistic viewpoint that those in the know must “protect” consumers by keeping them ignorant of the cost of their own health care

Efficiency of healthcare markets has long suffered from the fact that payment by health insurers for care has largely shielded consumers from concerns about the cost of that care.  Now that dynamic is changing, and the time is ripe for lifting the veil off of price.

At Coastal Medical, we are committed to the pursuit of Triple Aim goals: better population health, better health care, and cost efficient care.  Confidentiality clauses in existing contracts between health insurance issuers and providers of services (hospital care, specialty care, imaging, lab services, etc.) create a barrier that is preventing us today from fully understanding and effectively managing total cost of care.   As an accountable care organization (ACO), we need price information to determine how best to apply our finite population health management resources where they can have the most impact. 

We acknowledge a pressing need for more data on quality and outcomes.   However, we believe lack of current availability of that data should not stop us from looking at price now.  Creation of health care price transparency for both providers and consumers will be a major step toward making health care in Rhode Island more affordable.