Posts Tagged ‘HCTI’
Those who have been around me for any length of time know how passionate I am about the need to make the American healthcare system far less daunting for consumers – especially concerning the cost of care, which, for years, seems to have held something of protected status.
With a greater number of U.S. employers striving to curb healthcare costs, often by offering consumer driven health plans, employees and their families are finding themselves increasingly accountable for “shopping” and paying for their healthcare. Now more than ever before, it is critical for patients to understand the costs involved.
Last fall, we introduced our first Healthcare Transparency Index (HCTI) based on several million medical claims in our database from all 50 states. It looked at prescription drugs and revealed pharmaceuticals offer the highest opportunity for cost savings for consumers – and some pharmaceuticals more than others. The Index received tremendous response, especially from those who’re shopping for prescription drugs and using more of their hard-earned money to do so.
We recently released our second Healthcare Transparency Index, this one focusing on routine medical services. In the process, we uncovered four key drivers of cost variances in the data – age, “retail vs. traditional office visits,” location and specialty office appointments. Just a few interesting facts that consumers should take note of:
- For check-ups and well visits, patients age 40-to-64 will pay up to 26 percent more per visit than 18-to-39 year old patients and in that senior group, internal medicine visits represented the greatest cost variance. Lesson? You should be aware that there’s a lot of margin in such visits and you should ask your doctor to help you keep those costs low.
- A child’s physical for camp, school or sports is much cheaper at a retail clinic versus in your primary care physician’s office, from a high of $160 to a low of $29. Lesson? Check your local retail clinic (Minute Clinic; Take Care Clinic; The Little Clinic) for such exams before traipsing off to your doctor’s office.
- Psychotherapy as a specialty has the greatest variance by market amongst specialty medical care. Lesson? You should check the pricing structure of several psychotherapists before setting up an appointment with one because of significant pricing difference for similar-to-identical services.
As the country’s healthcare system moves toward the Accountable Care Organization (ACO) model, where all parties – from patients to hospitals to physicians to payors – are much more holistically involved in care, cost transparency is going to be an important piece of the puzzle. So indexes or studies like our Healthcare Transparency Index are going to be increasingly vital to the nation’s pocketbooks.
Putting power like that into the hands of consumers makes me feel I’ve done my job.
For several years now, my co-workers and I have been advocating market changes that place more information about healthcare costs – and more control of healthcare purchases – into the hands of consumers. We want to reverse the escalating upward trend of healthcare costs in our country and would like to see healthcare “users” be transformed into healthcare “buyers.”
With the growing presence of Consumer Driven Health Plans (CDHP), we’ve sensed our “new consumerism” dream growing more attainable. The remaining challenge though, is cost transparency.
Healthcare consumerism requires consumers to have “skin in the game,” which is exactly what CDHPs do. They provide an incentive for employees to be smart about their healthcare purchases. Yet, it’s also necessary to know the cost of what you’re buying today or in the future relative to your health plan and market so you can make actionable moves. Costs must be transparent for smart purchases to be made.
That’s certainly what we’ve seen with one of our clients, Thompson Machinery, which we recently discussed in the magazine CDHP Solutions. When employees embraced CDHPs containing a cost transparency tool that helped them see the true cost of their healthcare purchases, Thompson employees realized, on average, $200 per employee in savings a year. Multiply that by the number of employees potentially using a high deductible plan (61% of all businesses in 2011 will offer one according to a National Business Group on Health study) and those savings reach well past the millions.
It’s really simple. When you give employees solid, transparent information about their healthcare and the value-driven choices available, invariably they make far more insightful decisions about their care and its quality. It puts more control in their hands. And that simply helps everyone’s bottom line.
We’re excited to see more CDHPs in the marketplace, even becoming the plan-of-choice for many American private-sector workers. Once these plans are coupled with the kind of effective healthcare cost transparency that companies like ours can bring, I have no doubt that Americans will be able to make savvy healthcare purchasing decisions.
The kind that truly drive down costs.
In an article in Monday’s edition of Boston’s MetroWest Daily News , Kevin Schwartz reported how the State of Massachusetts Legislature, Attorney General Martha Coakley and UMass Medical Center’s Dr. Michael Collins are focused on healthcare insurance premiums that are taking a bigger bite out of individual, state and municipal budgets. The state appears to be zeroing in on two possible solutions, a global payment system and cost transparency.
In my experience, cost transparency is unquestionably the right approach to take.
Consumers are only beginning to learn that medical, dental and pharmaceutical prices vary a lot, as our inaugural Healthcare Transparency Index, a study of more than a million medical claims data from 50,000 consumers from across the nation over the course of a year, revealed. The key to reigning in healthcare costs in to ensure patients – who, more and more, are having to become healthcare consumers – are equipped with the tools they need to understand the costs so they can proactively make purchase changes that helps everyone’s pocketbook.
Massachusetts’ My Health Care Options Web site, also mentioned in the story, is a great start for the state. That will help engage employees/consumers/patients even more.
No question in my mind, if the Legislature successfully addresses the “cost transparency” issue, they’re well over half way home!
People tell me that I’m pretty passionate about healthcare – I can get fired up on the topic of cost transparency at the drop of a hat. I never thought anyone would match my enthusiasm on this subject … until I met Dr. Larry Van Horn.
As an Associate Professor of Healthcare Management at Vanderbilt University’s Owen Graduate School of Management, Dr. Van Horn has lots of opportunities to sound off on the issue of healthcare cost transparency and what it means to patients and businesses alike. So we were thrilled when Employee Benefits Adviser captured some of his best arguments in a recent podcast.
During his talk with Editor John Ortman, Dr. Van Horn addresses the need for transparency in order to create smarter healthcare consumers and ultimately, a sustainable healthcare system. He also digs into the data in change:healthcare’s Healthcare Transparency Index (HCTI) and the need for cost transparency today, as consumers are being forced to take more accountability for their healthcare purchasing decisions.
Have a listen and sound off with your own thoughts below.
Like the brothers Jake and Elwood from the movie the Blues Brothers, I have been on a mission. A mission and unwavering commitment to follow-thru on a promise made to de-confuse healthcare for anyone who had to access the health system and was baffled by a lack of transparency about cost and value. I promised to change healthcare for the better.
Sitting here in my office on this random Monday morning, I am really excited (I believe stoked may even be a better description of my demeanor). Today is the first of many days to come where I get to live out my personal mission – with the publication of the first quarterly Healthcare Transparency Index and the launch of this blog to support it.
After losing my parents to cancer in 2006, I was obviously overwhelmed with grief. Adding insult to injury was the confusing mess of medical bills and unanswered questions about their care that was left behind. During one of the worst and darkest times of my life, where the last thing I wanted to think about was money, I gained an amazing clarity about an issue that’s plaguing healthcare today – and one that I naively believe we can (nay, must!) fix.
No one argues that our current healthcare system is a mess – we’re all easily on board with that. But the number of theories about its core problems and how to fix them are astronomical. I bet you’re following 17 other blogs that say we need to focus on technology, quality or processes – all of which have their place. But, with that said, here are a few promises to our readers about this blog’s mission and why this one is different.
- We will show you the money – Does anyone even know what healthcare really costs? Because of the way the our healthcare system is inherently set up, we’ve all been shopping without price tags, the wool has been pulled over our eyes, another day another dollar – whatever cliché description you want to use to describe it. This blog is going to expose what the government, pharmaceutical companies, hospitals and insurance companies don’t seem want anyone to know – the true costs of procedures, routine care and prescriptions.
- We will back patients and employers – For the most part, employers and the employees they are trying to insure have been the biggest victims of the mess that healthcare has become. Because of the rising cost of healthcare, employers can’t afford to cover employees the way they used to, and employees are now forced, for the first time, to become really “involved” with their healthcare and make decisions about care that they never had to before. This blog is intended to guide employers and their employees on how to become smart consumers of healthcare.
- We will advocate discussion, welcome debate and receive challengers – We know not everyone will agree with our opinions and perspective – even if they’re backed by three years and $220 million of medical claims data. Even if the most recent research points to a rising number of companies insuring their employees through a consumer directed health plan, we’re used to the arguments against it. So we’re asking you to please read, weigh in, ask questions and consider.
I hope that after you check out a few posts, you’ll be as excited as I am.