Price Transparencyʼs Role in Healthcare Purchasing Reform

Abstract

I CONCUR WITH Sandy Lutz and Richard Clarke that price transparency is a growing national trend in healthcare. I also believe that this trend will ultimately have a positive effect on the institution of healthcare. Here's why. Having comparable quality measures allows healthcare providers to better judge their performance and improve quality processes. If providers rise to the occasion, examining and refining their procedures, cutting unnecessary and duplicative costs, and streamlining processes, they create a win-win situation. Consumers will win with higher quality care and lower prices. Healthcare organizations will win by operating more efficiently and earning consumer trust. How providers respond to calls for transparency in price and quality reporting could well be a harbinger of their future success. To establish trust and earn consumer loyalty, Lutz and Clarke point out that providers must communicate their policies and prices to consumers. I believe that a crucial part of effectively communicating is making the information easily accessible. As part of our communications strategy at ProHealth Care, a community-based healthcare system in Waukesha County, Wisconsin, we produce a yearly document titled High Cost of Health Care. This publication includes information about local charges for care as well as expanded information about our publicly reported quality measures. In High Cost of Health (which is also posted on our website www.prohealthcare.org), consumers may view and compare our prices to those of other acute-care hospitals in Waukesha and Milwaukee Counties for top-ranked diagnosis-related groups (DRGs). The publication also reports our quality performance ratings, which are benchmarked and validated by outside agencies. Additionally, we have established a Consumer Inquiry Line; the charges for common medical procedures at ProHealth Care facilities are available to consumers 24/7, either online or by phone. It is our hope that the quality information, used in conjunction with our charge data, will help consumers make educated healthcare decisions. Although having individual provider data available is important, it is just one step of a larger process. As Lutz discussed, eliminating multiple proofs of concept through coordination of data becomes essential to making the data and comparisons meaningful. Wisconsin is a leader in its attempts to coordinate data from Healthcare providers throughout the state. At the Wisconsin Hospital Association (WHA) Information Center, we established the Wisconsin PricePoint System, which is dedicated to collecting and disseminating complete, accurate, and timely data about charges and services provided by Wisconsin hospitals and ambulatory surgery centers. To encourage easy access to quality and cost information, many of ProHealth Care's consumer publications provide links to PricePoint and other objective sites, including Leapfrog (www.leapfroggroup.org), HealthGrades (www.healthgrades.com), and Wisconsin Checkpoint, a quality and safety reporting initiative by WHA (www.wicheckpoint.org). The demand for transparency is just one of many issues instigating a dramatic and necessary paradigm shift in healthcare business practices. Value-based purchasing does not occur in healthcare as it does in other markets. If attempts to create a healthcare market fail, the pressure for political solutions to healthcare financing will be irresistable. …