Staying informed Featured

8:00pm EDT August 26, 2007

The move to improve transparency in health care has had an impact on both consumers and providers. From the consumers’ perspective, transparency can provide the price and quality information they need to make informed choices among health care providers, says William McCarthy, director of large market sales with UPMC Health Plan.

For providers, transparency represents their ability to access the information they need to get a comprehensive view of their patients’ condition so they can offer a well-informed treatment plan. The challenge for both consumers and providers seeking transparency is the lack of detailed, standardized reporting, says McCarthy.

Smart Business spoke with McCarthy about transparency and consumerism and their effects on health care.

How can transparency be used to drive down health care costs?

Consumers can use information on price, quality and effectiveness to improve the value they receive for their health care dollars. This requires consumers to have access to resources designed to help them make those complex decisions.

Technology that allows providers to have a more comprehensive view of a patient’s condition can improve efficiency by eliminating duplication of services and prescriptions and reducing administrative costs.

Transparency in the form of standardized provider reporting improves quality. Studies have consistently proven that higher quality health care translates into lower costs. Health plans are currently using quality measurements that can help to identify providers that are employing best practices and using this information to improve quality among all providers.

How can cost information help consumers of health insurance?

Cost information, quality and outcomes information and alternatives can be very effective tools in helping consumers make health care related decisions.

Pharmacy leads the way in terms of transparency. Most health plans have a wealth of information available to consumers in terms of cost, effectiveness and alternatives so that they can make informed decisions regarding which types or brands of drugs they should consider. This information has been around long enough that conversations between doctors and their patients about it are commonplace.

Fewer resources are available to consumers when it comes to comparing doctors and hospitals. The information available today is fragmented, and there has been no industrywide standard.

Health plans also offer provider comparison tools, like Health Advisor, that can help consumers choose a hospital based on factors they find important, such as cost, outcomes, etc. However, consumers may find these tools to be confusing or misleading. Within the next few years, we will see the standardization of provider information that should make it easier to understand.

What should business owners know about a health care plan before they purchase?

Business owners should ask the following questions before choosing a plan:

  • How does your health plan report quality, and how do you measure up to your competitors?

  • What types of decision-support tools do you have to help my employees make informed decisions about how to improve their health and how best to spend their health care dollars?

  • What strategies do you have available to improve the health and productivity of my employees?

  • How will you engage my employees and their families in programs to improve their health?

  • Do you have examples of your success in improving the health and productivity of an employee population?

How do transparency and consumerism benefit business owners?

Business owners and executive leadership must lead the way in creating a culture of health within their organizations. They must support the introduction of tools and programs designed to engage employees and offer them the information and incentives that get them to change. If they are successful, they can reap the rewards of a healthier, more productive work force.

The term ‘consumerism’ as it relates to health care benefits is often tied to high-deductible health plans (HDHPs); however, introducing consumerism does not necessarily mean introducing HDHPs. Consumerism can be introduced in the form of cost information, decision-support tools and health promotion strategies that reward employees for improving their health. This can be introduced with HDHPs or more traditional plan designs.

How does it benefit employees?

Employees continue to share in the cost of health care increases through employer cost sharing, so they have a financial interest in getting the most value they can for their health care dollar. Employees also continually seek out strategies to improve their health, and offering the resources they need helps employees take steps to improve their quality of life and their satisfaction with their health care program.

How does it benefit health care providers?

Providers are looking for ways to deliver their care more effectively and efficiently. Improving transparency through standardizing and streamlining reporting, storage and access to medical records will help them be proactive in their treatment.

WILLIAM MCCARTHY is director of large market sales with UPMC Health Plan. Reach him at or (412) 454-5102.