Health & Human Services

A Dose of Transparency

State-sponsored Web sites are enabling consumers to compare hospital and physician prices and performance.
by | September 2006
 

If you suffer from heart disease and live in Florida, you can click on a state Web site and figure out which hospital in your county--or anywhere in the state for that matter--has the best record for cardiac care. FloridaCompareCare.gov will tell you each hospital's survival rates for, say, coronary artery bypass surgery--plus how well the hospital does with surgical infection prevention. And that's not all. The site lets you know how much each hospital charges for the procedure and its accompanying hospital stay--and how that compares to other hospitals in the state.

The idea behind the site, which lists information for a dozen health problems, is, says Alan Levine, who headed Florida's Agency for Health Care Administration when the site was being developed, to "improve care and reduce costs" by giving citizens "the tools to compare outcomes and prices between health care providers and medical services."

It's a consumer-driven world out there. Health care costs and provider performance are becoming the business of patients. That's because patients are increasingly bearing the brunt of a shift in who pays the health care bill. A significant number of employers, for example, are asking employees to pay not only a greater share of the insurance premium but also larger co-payments for doctor visits and various procedures. In addition, consumer-driven health plans, such as Health Savings Accounts, are edging into the mainstream of insurance coverage. HSA plans, for instance, put money in an account that employees use to pay for their day-to-day health care. If they use it all up, they can end up paying a significant portion of their health bills out of their own pockets.

With these new responsibilities, patients need more information about the cost and quality of care. Along with Florida, a handful of states- -Maryland, New York and Texas, among them--are or will shortly be feeding that need with state-backed Web sites offering comparative information about hospitals and, in some cases, individual physicians.

But consumer service is only a piece of the picture. There is an even loftier goal: reducing overall costs within the health care system. That is, in the best of all possible worlds, patients would choose the highest quality facility--the hospital with, say, the lowest mortality rates and the best score on infection rates. Over time, the hospitals that perform poorly--those with, say, high infection rates that add unnecessary costs to the system--would be driven out of business. The information on price could push physicians at the high end of the spectrum to voluntarily lower their fees.

In the real world of day-to-day practices and habits, however, questions abound about whether consumers are in a position to benefit from the information available to them. Despite the increasing pressures on them to compare quality and price, they may actually be drowning in data and finding it difficult to make use of the information. That raises the issue of whether state efforts to create Web sites that offer quality and cost comparison shopping are worth the political hassle it takes to get them up and running.

CHANGING BEHAVIOR

It would seem prudent for a patient who is ill--facing, for example, heart surgery or a hip replacement--to check out the bona fides of possible service providers. But many factors run counter to that instinct. Patients may, in fact, have little choice. "If you're desperately ill," says Elizabeth Teisberg, co-author with Michael E. Porter, of "Redefining Health Care: Creating Value-Based Competition on Results," "you are in your doctor's hands and not likely to argue with him about which hospital he's going to send you to for an operation--or to change physicians to use a doctor who operates at a high-rated facility."

The record on consumer reaction to Web site information echoes Teisberg's observation. Take a recent assessment of New York's public report card on deaths from coronary bypass surgery. For 15 years, the state has been keeping tabs on hospitals and doctors who perform the surgery, and researchers have found that heart patients who pick a top-performing hospital or surgeon from that report card are half as likely to die as those who pick a poor-scoring provider. However, according to the recent analysis of patient behavior, patients and their cardiologists are not flocking to the top-rated providers. "Patients can dramatically cut their chances of dying by selecting a top performer," says Ashish Jha, lead author of the study and a professor at Harvard University's School of Public Health. "But there's no real evidence that patients use the information to pick a better hospital, even though it's free and easy to access."

Jha's findings are confirmed by a study of another program. Mathematica Policy Research analyzed Hospital Compare, a federal program that gives patients a means of comparing hospitals in terms of quality measures and thereby choosing the best one for the type of care they need. To provide potential patients and their families with information to make such judgments, Hospital Compare asks the institutions--4,200 acute-care and critical-access hospitals nationwide participate--to submit data on quality measures for treating heart attacks, heart failure and pneumonia, and for preventing surgical infection. Hospitals are asked, for instance, how often they prescribe a beta-blocker drug when heart attack patients are discharged and whether they check to see if pneumonia patients have received an influenza or pneumococcal vaccine. These are accepted as "best practices" or appropriate performance measures for hospitals, and now that information is available for patients and their families to use.

As in Jha's study, however, Mathematica researchers found that patients aren't benefiting all that much from Hospital Compare. There is, Mathematica senior health researcher Mary Laschober notes, "little empirical evidence that consumers have altered their behavior in response to publicly reported quality measures."

Laschober's next point, however, keys in on what may be the ultimate importance of a Web site that provides comparative data. "Hospitals," she writes, "respond in positive ways to public reporting." Many of the those in the Hospital Compare database immediately began improving their scores from one reporting period to the next. Eight in 10 reported significant improvement on one or more scores while only 5 percent reported a decline in one measure or more.

Similarly, when the state of Maryland began putting a hospital reporting system in place a few years ago, hospitals were given several years to prepare for the public disclosure and even practiced the data review process for six months before the data went online. During the tune-up phase, the hospitals were able to spot their failings, and most of them changed policies to meet the standards.

Teisberg points out that, unlike patients, providers--doctors, hospitals, clinics--are competing and "they don't want to show up in the bottom 25 percent." Teisberg, who is an associate professor at the University of Virginia's Darden Graduate School of Business, adds that "the importance of reporting results is to enable not just patients to get information but physicians to improve."

PRESSURE FROM THE FEDS

While many hospitals do act to improve, plenty of them don't. The Mathematica study asked hospital administrators what they saw as the barriers to boosting their scores. Several fobbed off the low scores by saying their poor showing was simply a failure of physicians and other staff members to document that appropriate care was given. But other hospitals reported that they were unable to get physicians involved in quality-improvement efforts or that they did not have the financial resources to devote to improvement strategies.

It's also true that some hospitals--and many hospital associations-- are less than enamored with the whole exercise in transparency, in part because prices for any one procedure are likely to vary widely even within a single hospital, with different tabs for various insurers and others for the uninsured. For years, hospital and insurance associations have been successful in lobbying to keep lawmakers from mandating Web sites that would provide comparative quality and pricing data on hospitals. But change is in the air. One reason is a countervailing pressure from the federal government. Hospitals that treat Medicare patients are rewarded financially for reporting their performance data.

But pressure is being felt in the states, as well. Comparative sites are seen as a way to get a handle on quality and price and, thereby, force down the cost of health care. The new mood was palpable in Ohio this year when the legislature considered a bill to have the health department set up a site so consumers could measure hospital mortality rates on certain procedures and compare various charges, such as private and semi-private rooms and common services available through emergency, operating and delivery rooms. The road to passage was far from easy. "It took about two years to work through and pass," says state Representative Jim Raussen, who sponsored the measure. Legislators had to work closely with health insurance companies and the hospital association to craft a bill everyone could live with.

PRICE POINTS

Most state Web sites have a price list of sorts: what hospitals charge for a limited number of services. Unlike Web sites sponsored by health insurance companies, which carry the fees the insurance company has negotiated with the provider (and whose sites are available only to those insured by the company), the state sites are open to everyone and carry a range of charges or average prices. The New York State Health Accountability Foundation, a public-private partnership, maintains a Web site that offers, county by county, the average length of stay in the hospital for 14 different procedures and the average charge. At Albany Medical Center, for instance, surgery for a hip replacement currently means three to four days in the hospital (3.7 is the hospital's average) at an average cost of $21,425, while over at St. Peter's Hospital, hospitalization is closer to four days (3.98 days on average) but the charges are slightly lower at $20,905.

For a patient with a consumer-driven health plan or insurance that requires significant co-pays or deductibles, price is an important factor. But the charges listed are not necessarily what the patient will end up paying. Complications can arise; additional therapies may be needed. And the listed price does not factor in what a particular insurance plan allows or will pay for. "The idea of posting prices poses difficulties," says Robert Doherty, a physician who is also senior vice president of public policy for the American College of Physicians. "There is not a single retail price."

Moreover, Doherty points out, most of the health care dollar is spent in the last few months of life where "people aren't going to pay much attention to price. They just want to get the care they need. So I'm pretty skeptical that posting prices will be a huge boon to lowering health care costs."

Even for those willing to shop for the best price, the information is often difficult to digest. If the prices are presented on a piece-by- piece basis--a site might show that a hospital charges $1,000 for a surgical procedure, $1,200 for the operating room, $500 per day for the hospital bed, $30 for two aspirin--they won't be able to make much sense of it. Moreover, prices for every procedure are not available. Usually, a site will list up to 30 of the most common procedures. But that doesn't mean the surgery or therapy the patient faces is on the list.

Gerard Anderson, a professor of health policy at Johns Hopkins University, sees a possible solution to comparison-shopping in having providers list what percentage of the Medicaid charge they pay. A hospital might report that it charges 125 percent or 200 percent more than the Medicaid base. "That would give people one number to compare," he says. "It would be one number that people could understand."

What health economists such as Teisberg note is that the point of the quality and price reports is not necessarily to put consumers in charge but to drive quality and efficiency simultaneously. "In most industries, that's what happens," she says. "But it requires competition at the right levels. And that is not currently the case in the health care industry."

To the extent that public and easily accessible information puts pressure on hospitals to perform up to a gold standard, the Web sites may be worth state efforts. They could be a force for driving down costs--if they bring about pressure for the widespread use of evidence-based medicine and a beefing up of quality and performance measurements. Otherwise, they are nothing more than another trend-of- the-day solution. "It's just this year's model," Anderson says, "unless we get the methodology right, and we're many years away from getting it right."

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