Consumer Engagement and Value Driven Health Care Vol No Issue Price Transparency

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					                   POPULATION HEALTH INSTITUTE
                   Translating Research into Policy and Practice
                                                                            Issue Brief
       “Consumer Engagement” and “Value-Driven Health Care”:
              Do we have the right information tools?
Donna Friedsam, MPH                                                                                                 January 2008
                                                                                                                    Volume 8 Number 1
Estimates suggest that 30-40% of health           Effective consumer engagement depends           location, ease of physician referrals,
care dollars are wasted on the costs of poor      on the reporting and provision of data on       established hospital and professional
quality -- overuse, underuse, misuse, dupli-      quality, cost, or price, along with incen-      relationships, judgments of family and
cation, system failures, unnecessary repeti-      tives, financial or otherwise, to use these     friends, and, increasingly, financial in-
tion, poor communication, and ineffi-             data for decision-making. But widespread        centives linked to their health care
ciency.,1,2 Now, health care consumers face       deficiencies in consumers’ literacy and         choices.
growing expectations for their role in            numeracy skills may challenge these ef-
achieving a fix, along with providers, pur-       forts.6 As well, providers need training to     Public reporting on hospital quality in
chasers, and policy-makers.3 More engaged         work constructively with more engaged           Wisconsin8 has been shown to influence
and empowered consumers, it is argued,            patients. Payment systems need to support       consumer views about individual hospi-
could spur providers to eliminate unwar-          models of care that allow for dialogue and      tals. “Public report” hospitals were
ranted practice variation and services of         patient participation. And employers need       more likely to engage in quality im-
marginal benefit, promote judicious use of        to assure the consumers have meaningful         provement and show significant im-
recommended, evidence-based care, and             choice and ability to act on the data.          provement, compared to “private re-
stimulate price competition. These develop-                                                       port” and “no report” hospitals. Though
ments would in turn result in improved            Employer Purchasing Decisions                   consumers often may be unclear about
quality, reduced costs, and better outcomes.4     Efforts to expand consumer responsibility       how to use information in choosing or
                                                  in health care arise from pressure to con-
The quest for better value in health care         tain the growth of health care costs. Pur-
underpins current initiatives in data collec-     chasers are seeking new ways to establish       Wisconsin Resources
tion and reporting, benefit design, informa-      greater accountability in the health care       Wisconsin Collaborative for Health Care Quality
tion technology, payment reform, and ef-          system, linking financial outcomes to 
forts to expand insurance coverage. Many          health outcomes. From their perspective,        Wisconsin Hospital Association Checkpoint and
reforms seek to change incentives that gov-       accountability begins with better measure-      Price point:
ern health care decision-making and behav-        ment of quality and efficiency in the deliv-
ior--incentives that depend on “actionable”       ery of personal health services and better
information. Publicly reported information        reporting of those measures to all stake-       Wisconsin Health Literacy
on health care performance is intended to         holders in the system.                
help consumers select hospitals, physicians,                                                      The Alliance Employer Health Care Cooperative
and treatments based on standardized meas-        Beyond better information, public and pri-
ures for clinical quality, efficiency, and con-   vate purchasers also seek stronger incen-       The Business Health Care Group of Southeast
sumer experience. But what information            tives for quality improvement. They are         Wisconsin http://
tools are needed to advance toward these          developing “pay-for-performance” designs
                                                                                                  Greater Milwaukee Business Foundation on Health
common goals? What is the potential, and          linking provider payments to quality and
what are the limits of such information           outcomes rather than volume and inputs.         Wisconsin Health Reports
tools?                                            Some purchasers use benefit-design strate-
                                                  gies to encourage enrollees to select health    Wisconsin eHealth Care Quality and Patient Safety
Consumer Engagement                               plans or providers based on some weighing       Board
Consumers may play three active roles in          of quality, cost and value.7          
health care.5 They make market choices                                                            MetaStar
among insurance options, delivery systems,        Does Public Reporting Stimulate Health
providers, care and services; consumers as        Care Improvement?                               Wisconsin Healthcare Purchasers for Quality
patients “co-manage” their care with pro-         A growing body of research demonstrates
viders and make choices about their own           the potential impact of public reporting, as    June/WHPQoverview.pdf
health maintenance; and consumers evaluate        well as the current limits in the use of pub-   Wisconsin Department of Health and Family Ser-
the care they receive. Ideally, such engage-      lic reports. Beyond price and quality, con-
ment increases patients’ own quality of care      sumer decisions about health care rely on
as well as the overall quality of health sys-     several factors. Among these, provider
      University of Wisconsin     Department of Population Health Sciences • Suite 760, 610 Walnut Street, Madison, WI 53726-2397
      SCHOOL OF MEDICINE                   Phone: (608) 263-6294 • Fax: (608) 262-6404 •
changing providers, public disclosure ap-    What Tools are Available?                         Indeed, most current enrollees in consumer-
pears to have a “sunshine effect”: It stimu- The internet has made searching for and           directed health plans report that they lack
lates providers’ internal quality improve-   disseminating information easier and less         adequate information to support their deci-
ment and affects how purchasers structure    costly. The U.S. Agency for Healthcare            sions.16 The leading web-based consumer
their networks.9                             Research and Quality (AHRQ) offers a              tools vary greatly in performance and often
                                             variety of tools that explain specific condi-     fail to offer specific points of relevant infor-
“Price transparency,” when linked to in-     tions and treatment options, as well as           mation.17 A Milwaukee firm recently re-
centives, is intended to encourage con-      guides to improving and maintaining a             ported that, among companies that offer
sumers and those who make decisions on       healthy lifestyle. Some are for direct con-       health savings accounts, more than two-
their behalf to consider price alongside     sumer use and others are for providers to         thirds of web sites do not help a potential
quality.10 In order to be “actionable,” in-  use and distribute to their patients.13 The       customer decide if such an account is right
formation must be specifically tailored to   Centers for Medicare and Medicaid Ser-            for them.18
the perspectives and needs of its audience. vices (CMS) launched four websites to
Yet much of the financial information now assist consumers in their choice of provid-          Incentives and information work together
available in the health care system might    ers.14 Private health plans, employers, and       with established habits and experience to
be limited in its accuracy, relevance, and   other third parties offer a variety of web-       steer health care decision-making. Signifi-
usefulness to the lay consumer.              based tools for treatment option support,         cant challenges remain toward actionable
                                             hospital choice, selection of drug plans,         information. Progress continues on efforts
Price transparency currently relies mostly and personal cost decision support.                 to develop valid and reliable performance
on retail rather than negotiated prices, and                                                   measures. Equally important is the design
on individual unit prices (office visit, lab In Wisconsin, three organizations are forg-       of objective, evidence-based tools that are
test) rather than prices for episodes of     ing the path in public reporting. The Wis-        compatible with ordinary consumer behav-
care. This limits the utility of such data;  consin Collaborative on Healthcare Qual-          ior and capacity to digest information. Fi-
Wide variation exists in treatment pat-      ity reports outpatient measures along pa-         nally, trusted leaders and institutions must
terns, the volume and bundling of ser-       rameters prescribed by the Institute of           promote broader awareness of effective
vices, such that lower unit prices do not    Medicine. The Wisconsin Hospital Asso-            tools and convince consumers that the use
necessarily translate into lower costs of    ciation Checkpoint and Pricepoint web-            of such tools can yield financial savings and
care. Some tests and treatments, regard-     sites report hospital inpatient data on stan-     better health outcomes.
less of price, may be of marginal value      dard performance and pricing measures
and, at a system-level, provision of more    and will soon provide data on outpatient          Emerging Initiatives
services do not generally yield better out- services. And the nascent Wisconsin                Wisconsin has emerged as a leader along
comes.11 Promising--but still early--        Health Information Organization intends           with national efforts to define quality and
efforts seek to define episodes of care for  to collect administrative data from payers        implement standards for care, measurement
common illnesses, risk-adjust data to ac-    to allow tracking across episodes of care.        and reporting.19 Today, these efforts are led
count for patient severity, and then allow                                                     by a range of organizations representing
for price comparison across these epi-       Do Existing Tools Meet the Need?                  providers, purchasers, payers, businesses
sodes. Beyond overall price, reporting       Despite the proliferation of information          and consumer interests. The organizations
about patients’ out-of-pocket expense        sources, consumers may find themselves            listed in the tables are among those at the
would be more meaningful to individual       bombarded rather than supported in their          forefront of advancing health care data re-
consumers.                                   decision-making. Information is often             porting and consumer engagement in Wis-
                                             disseminated to market a service or prod-         consin and nationally.20
Public reporting can have unintended con- uct rather than promote optimal decisions.
sequences: Some analysts suggest that, in Consumers often cannot assess the validity           References
markets with few hospitals, disclosure of    of the information available,15 and cannot        Full citations available at http://
negotiated prices (for units of services     depend on accuracy or differentiate among
rather than for episodes of care) can sup-   the sources of web-based health informa-          issue_briefs.htm)
press hospitals’ negotiation of further dis- tion.
counts.12 As well, provider prices may not
only reflect variations in efficiency but
also the risk profile of a patient popula-    National Resources
tion. Varying prices may also result from     Agency for Healthcare Research and Quality       Bridges to Excellence
the disproportionate provision of public      (AHRQ): Quality Indicators and Talking Quality
goods such as charity care and graduate           National Quality Forum
medical education. Public policy-makers         
will need to consider how to sustain these    AHRQ Consumer Assessment                         The Leapfrog Group
services if providers can no longer cross- 
subsidize them through the pricing struc-     U.S. DHHS Value-Driven Health Care               National Association of Health Data Organizations
                                               CMS Hospital Compare                            Consumer-Purchaser Disclosure Project
                                               hospitalqualityinits/25_hospitalcompare.asp     National Committee for Quality Assurance

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Description: Consumer Engagement and Value Driven Health Care Vol No Issue Price Transparency