In the past, health care was a limited service that employers provided employees. The service was limited because there was only coverage for certain physicians, medical procedures and prescriptions, depending on the plan.
Today, health care plans, such as Health Savings Plans, give consumers more choices in health care service. For many consumers, more choices lead to confusion and the need for knowledge to make educated decisions. Health care providers advertise their plans as being transparent to ease consumer fears, but it is important for consumers to truly understand the information they are being provided and how to use such information.
The benefit of transparency is that when consumers are armed with information on quality and price, they can make better decisions, according to Sally Stephens, president of Spectrum Health Systems. Transparency is an initiative enabling consumers to compare the quality and price of health care services, so they can make informed choices among doctors and hospitals.
Smart Business spoke with Stephens about transparency, how consumers should utilize this tool and how it is affecting the health care industry.
What is health care transparency?
Today, transparency simply means the publication of provider charges. However, true transparency only occurs when patients understand their out-of-pocket expenses, not just provider charges.
Numerous influential organizations, including the Healthcare Financial Management Association, various state hospital associations, the American Hospital Association and the U.S. government, have come together advocating patient consumerism by trying to answer some very difficult questions regarding transparency in the health care industry.
Some of America’s largest employers and the medical profession are cooperating to lay the foundation for pooling and analyzing information about purchasers, hospitals and physician services. When this data system is in place, the regional health information alliances will turn the raw data into useful and meaningful information for consumers.
How do consumers utilize this tool?
The true purpose of full health care transparency is to provide the consumer with information on quality of care and cost. This tool will allow them to obtain the information that can assist them in making an informed decision regarding the appropriate level of care that is right for them. And, the responsibility will be on the consumer to make sure they access a credible source for this information. After all, this is how consumers purchase any other service or product they buy.
How can this tool benefit a consumer’s overall health care?
Consumers deserve to know the quality and cost of their health care. Transparency provides them with the information necessary and the incentive to choose health care providers based on value. Consumer choice creates incentives on all levels and motivates the entire system to provide better care for less money. Improvements will come as providers can see how their practice compares to others.
Can there be total or true transparency?
The concept of health care transparency is a noble idea. However, the transition from concept to reality creates significant challenges. Complete display of charges is meaningful to self-pay patients, which only represents 5 percent of the average consumers.
For the vast majority of patients to understand consumerism, they need to understand the unique relationships between the entities or the contracts, charges and benefits. So, to achieve true transparency and empower providers and patients to work together, payors need to provide better access to tools that allow ready access to their contracts and charges. This will allow them to better determine how a procedure will be paid; therefore, integration of contracts, charges and benefits provides all the necessary information for patients to become educated consumers.
Are there risks on solely relying on transparency when selecting a health care plan and/or provider?
Giving consumers the information and decision-support tools they need is much more complex than just comparing prices. In fact, introducing transparency depends on a convoluted set of circumstances and challenges. For example, physician fees for a specific service or procedure have little relationship to the total cost of care. Therefore, the total costs associated with an entire episode of care would be more relevant. Currently, cost-of-care measurements are unavailable.
How does transparency affect the relationship between providers and employers?
The goal is that transparency enhances the relationship with doctors and patients. Patient inclusion improves care and can help move us from episodic intervention to a model of chronic care management that rewards keeping people healthy. Data exposure will lead to patient empowerment. Empowerment results in an increased demand for evidence-based medicine because it demonstrates effectiveness and improves quality of care. And, quality of care means lower costs.
SALLY STEPHENS is president of Spectrum Health Systems. Reach her at Sally.Stephens@spectrumhs.com.