Transparency in Healthcare Economics

The Power of Information

The idea is: if people have access to information regarding the quality and cost of healthcare services then they will make better decisions regarding those services. In addition, by making decisions with this information they will enhance the competitive environment which will have the effect of improving quality as well as to optimize the value to cost ratio. One of the biggest complaints from many consumers of healthcare services is that they simply don't have access to this type of information. As it turns out all consumers have access to some of this information, the problem is much of this information has not found a place where it can be gathered, sorted and presented for all who seek its use. Later in this blog I will discuss an alternative way to do this but in the mean time I want to mention that there are others who are currently working diligently to improve the access to this type of information.

"We're from the government. We're here to help."

In an effort to improve access to information regarding healthcare quality the federal government has encouraged hospitals to begin reporting such information to the public. The United States Department of Health and Human Services through the efforts of the Center for Medicare and Medicaid Services (CMS) and other members of the Hospital Quality Alliance: Improving Care Through Information (HQA) have created a website that allows consumers to compare hospitals on how well they perform for certain medical conditions. While it lacks specific information for helping consumers on a day to day basis it is at least a step in the right direction. CMS also provides inpatient hospital cost data on its website. On June 1, 2006 Medicare posted information about payments it made in fiscal year 2005 for common elective procedures and other hospital admissions. This included the top 31 elective inpatient hospital Diagnosis-Related Groups (DRG). It has recently been updated to include fiscal year 2006 data. The information can be downloaded as an Excel spreadsheet but is not very user friendly for most consumer purposes.

The Report Cards Are In

As it turns out the federal government is not the only one who provides information on healthcare quality. Even at the state level this type of information can be found. For example South Dakota lists pricing information for its citizens and anyone else interested in this cost data. For a fee Healthgrades Inc. will prepare a report on just about any physician, hospital or nursing home in the United States. Hospital systems, such as Clarion Health which is affiliated with Indiana University has also gotten in on the act and provided their own cost information in order to attract consumers. While some may debate the value of these sources of quality and cost information there is no doubt that there is a steady drum beat marching consumers in this direction. What many of these websites lack is information that is either useful for the individual consumer or is presented in a format that is not easy to interpret. You know this is serious business when Google gets on the bandwagon. They are in the process of also taking on the many challenges presented by the current healthcare system with the assistance of its advisory group. It is just a matter of time before access, cost and quality information is set free from the bonds of the current healthcare system.

Power to the People

As I mentioned in the opening, consumers really do possess this information; they just haven't put it together in a format that is useful. When a patient develops a medical problem and enters the healthcare system searching for a solution they begin to gather information. They engage physicians, hospitals and insurance companies in their quest. All the while they are gathering information and probably not realizing the value and the power of this information. They develop opinions about the doctors and hospitals. They learn about their specific disease process and what it really will take to treat it. They experience the services directly and have first-hand knowledge of the treatments and the outcomes (assuming they survive). In the end they will also learn what it will really cost when they receive their bill or explanation of benefits (EOB). What they don't realize is that their bill, which every patient dreads receiving, holds the key and can be the admission ticket to the source of all the information they seek. What if there was a gathering place for all of this information that each consumer accumulates? What if patients who are currently in the healthcare system had a process by which they forward this information to a central clearing house which could then sort it and enter it into a database that could be searched in a way that was useful to future consumers? Healthcare consumers could then be empowered by this storehouse of collective information. The transparency consumers seek is really already there it just hasn't been brought together yet into a meaningful gathering place.

Elements of the Platform

As I have discussed previously we need transparency in our healthcare system. Consumers want information that will be useful for helping them make meaningful decisions with regards to their health. This is especially important when it comes to information about cost, quality and access to healthcare. Consumers own this information right now. What they need is a platform that will gather, sort and present it back to them in a way that allows them to be empowered by it. What I am proposing is one such process for doing so. The platform would be Internet based and organized as a Healthcare Club. Patients across the country could send there EOB's or bills to a central gathering place via mail, FAX, or e-mail. This information which reflects real world experience of the healthcare system would then be sorted and entered into a database. Patients who provide information would then become members of this Club and automatically gain access to the accumulated data. They could also be surveyed on their specific experience of the healthcare system which would add additional information. Consumers that wish to access this database could either contribute their own information or could buy a membership into the Club. The key is to create a database that would be easy to navigate and present information in a way that has meaning to people. The goal is not to teach patients how to communicate like doctors in order to learn from this data; the goal is to learn how patients communicate their healthcare concerns and reflect back meaningful information in a language they understand. That is one of the problems with most of the current websites that provide information; it is generally in a language that only healthcare natives understand. Transparency means more than just seeing what everyone else is seeing but also understanding what everyone else is seeing.

One Stop Shopping

Imagine that you just returned from your Primary Care Physicians (PCP) office where you learned that the pain you have been experiencing in your right upper abdomen is due to gallstones. You are told you will probably need your gallbladder removed (Cholecystectomy) and are referred to a General Surgeon for this operation. Normally you would schedule an appointment with the surgeon and wait a week or two to be seen. The surgeon would then schedule your operation at their convenience which could also be another couple of weeks or more. You would most likely not seek a second opinion and simply agree to have the operation by the surgeon to whom you were referred, at a time and place of their choosing. How would things be different if you were a member of the Club? You would go home and access the Club's website. There you would be able to enter through your personal portal and begin your search. You enter in the type of operation you need and you are immediatly provided a list of surgeons and hospitals you have access to in your area. You are also provided typical cost data for each of those listed in your search results and this could be adjusted based on your insurance. In addition you would have access to other members opinions of their experience. Risk adjusted quality rankings could also be provided in time as the amount of information grows in the database. You would then choose your surgeon and the hospital based on a careful consideration of cost and quality. If you wanted you would receive information regarding your specific medical condition. In addition, you would also be able to access the surgeons appointment schedule and choose when you would like to be evaluated just like you would using any other internet based scheduling system. (Think airline, hotel and car rental industries.) Why would a surgeon or any other physician agree to this? Because for those on the top of the list this is how they will attract more referrals. Not only that but if their quality rankings are good enough they will learn in time to adjust their rates accordingly. Transparency works both ways and any informed consumer must anticipate this when we develop true transparency in healthcare economics.