In a recent Deloitte Consulting survey of 500 employers, half of those with 50 or more workers expect the Affordable Care Act to increase access to health insurance but very few expect the law to lower costs or improve the quality of care. In addition, most employers said they lack clear, understandable data on the cost and quality of the medical services their plans are purchasing.
Many said they share information with employees about health care providers, common procedures, medications, cost and quality and credited their third party administrator for analyzing claims data and providing the information. This came as no surprise because even though information on utilization is seldom made available to fully insured groups, reporting has always been a strength of TPAs who administer self-funded health plans.
Cost Sharing Fuels Demand for Information
The huge amount of attention directed at health care reform has gotten people thinking about health care spending like never before. And after several years of rising co-pays and deductibles, it’s no longer just the employer who is concerned about cost.
Despite taking on a greater share of their health care costs, consumers cannot be prudent shoppers without information on price and quality. Common sense reinforces the need for easy-to-understand information and research shows that when information on price and quality is accessible, the vast majority of consumers will select the highest-value health care provider.
More than 30 states currently require reporting of hospital charges or reimbursement rates and many are pursuing legislation to enhance price transparency. Structure and requirements of the laws and pending legislation vary greatly and most do not cover actual prices charged by providers for specific treatments. Some states post health care costs on state-sponsored websites and others have unveiled tools to help consumers compare prices from different providers for various medical services. While Medicare’s Hospital Compare website compares hospitals based on six aspects of care, price information is not yet included.
As we discussed in a recent article, the need for greater transparency has sparked considerable interest in scheduled benefits or “cost plus” pricing, where Medicare is used to determine an agreed payment schedule. Interest in this concept and variations of it will continue to grow since Medicare remains the industry’s most widely accepted index. In the meantime, communications must encourage plan participants and their dependents to ask their physicians for an estimate of costs before care is received. While this step has been talked about for years, the time to act is long overdue.
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In cooperation with NAEBA