The federal government’s promotion of high deductible health plans is a catalyst for price transparency initiatives, which the Department of Health and Human Services (HHS) says can lower costs and increase quality, while private health insurers say they are offering price transparency systems to meet marketplace demand – because their members want more price and quality information about medical services rendered by hospitals and physicians.

Hospital and/or physician pricing information is being disclosed in a variety of formats, while insurers say they are studying how to render it in the most useful way for consumers. Some display ranges of charge data, which they say is easily obtained and offers a basis for systematic comparison, but concede is at best a proxy for actual costs and reimbursements. Several insurers offer hospital price comparisons for various medical procedures that are based on actual fee schedule amounts but displayed in the form of ratings – akin to multiple star or dollar sign ratings in restaurant guides. Some insurers disclose those ratings for various medical procedures at the level of geographic region, while others show ratings of specific hospitals and physician practices. One insurer – Aetna – is disclosing precise reimbursement fee amounts for specific procedures in specific physician offices.

The price transparency concept and its various approaches raises several questions, including what form the data should take, for whom is the data really useful, what the "well-informed consumer" will do with his or her knowledge, whether disclosure will result in lower prices, and whether it could have unintended negative consequences.

Few consumers are likely to have CPT code books when examining cost data, and insurers say a balance must be struck between precision of the information and a layperson’s ability to comprehend complex factors that contribute to health care prices. Depending on provider contract language, health plans may not be at liberty to disclose provider-specific fee schedules. Price shopping interest is limited or absent when patients are not exposed to out-of-pocket costs, while many services – particularly hospital inpatient procedures – exceed even the financial obligations of those with high deductible health plans. Employers, on the other hand, may find price data valuable when deciding what health plan to choose for their employees and how much to pay for it. Providers may also use peer pricing benchmarks to improve their own efficiency – which is being increasingly rewarded in pay-for-performance programs, and may use specialist pricing information to alter their referral patterns to meet the needs of the patient. Learning competitors’ specific reimbursement rates could give providers incentive to lower their prices (as envisioned by CMS), or it could give more bargaining leverage to underpaid providers and drive prices up. Some studies suggest that pricing data disclosure may promote inappropriate rationing of health care services, while others show that it can successfully promote efficient utilization while improving health status.

Drivers of Price Transparency

"As we give consumers better information on how their health care dollars are spent, they will demand more value for their money, and the result will be better treatment at lower costs," said HHS Secretary Michael Leavitt, in announcing the federal government’s price transparency initiative for hospitals. Leavitt said that HHS is committed to promoting price and quality transparency, as well as greater use of health information technology, to support a consumer-oriented – or patient focused – health care system.

The Bush administration is promoting high deductible health plans as part of that "transformation," and HHS regards price transparency as a key element in the success of those plans, inasmuch as price information is necessary for meaningful decision-making by insureds who bear the greatest out-of-pocket costs: those who have annual deductibles of at least $1,050 for an individual and $2,100 for a family. High deductible health plans, which many health insurers actually call "consumer-driven health plans," are used in combination with medical savings accounts: either individually-owned health savings accounts (HSAs) or employer-generated health reimbursement arrangements (HRAs). Both types are federally tax-advantaged, and while HRAs are also exempt from state tax, HSAs will get a boost in Pa. next year as the 2006-07 state budget will make HSAs exempt from the state’s 3.07 percent personal income tax.

Several private insurers interviewed for this article point out that copayments and deductibles are rising for more traditional insurance products, like PPOs and point-of-service plans, making price transparency increasingly relevant to many more insureds other than those with high deductible health plans, as well as to payors seeking value in their health plan purchasing. Exposure to a 20 percent deductible for a hospital inpatient procedure, for example, would seem to offer sufficient motivation for PPO and HSA members alike to shop for price.

To further its promotion of consumer-driven health care, the Centers for Medicare & Medicaid Services (CMS) began this June posting on its website average prices that Medicare pays (based on 2005 data) for 30 common elective procedures at hospitals, listed as average ranges by county. CMS noted that, "the federal government is the biggest single purchaser of health care in America, and by taking steps to post prices and quality data, we hope to encourage more insurance companies, hospitals, clinics and doctors to do the same." CMS said it plans to post payment information for common elective procedures for ambulatory surgery centers later this summer, and common hospital outpatient and physician services this fall.

Private insurers in Pa. are now beginning to explore a variety of approaches to disclosing hospital and physician pricing information to the public, primarily through their Internet-based "consumer portals," capitalizing on the Web as an increasingly popular medium for consumer-retrieved health care information. These price transparency systems are being promoted in tandem with quality comparison systems, in the belief, shared by CMS, that an appraisal of "value" requires that consumers be able to integrate price and quality comparisons among providers. Yet a third variable – patient satisfaction – is poised to become part of the comparison matrix, as CMS is currently field testing a Hospital Consumer Assessment of Health Providers and Systems (HCAHPS) survey on consumers’ experiences with their hospital care, which it hopes to add to the standardized measures of hospital quality in its Hospital Compare public reporting system.

Transparency Systems In Pa.

Pa.’s private insurers are in various stages of rolling out price transparency systems, offering varying levels of price detail for varying levels of provider specificity.

By far the most detailed and specific system discloses physician-specific procedure prices using actual fee schedule amounts paid for services – a system being launched this month by Aetna in Allegheny County and 15 surrounding western Pa. counties, encompassing over 4,200 physicians who contract with the insurer. Aetna is introducing the system in other states and is exploring its potential in other parts of Pa., according to Don Liss, M.D., Aetna’s medical director for the mid-Atlantic region.

Aetna’s online, password-protected consumer portal allows any Aetna member – HSA, HMO, PPO or point-of-service – to type in a physician’s name, specialty or office address within that 16-county region and view a menu of the 20 most common office-based procedures that specialty provides, along with the negotiated rate that Aetna reimburses that physician for each procedure, says Liss. Separate from the list of prices for the top 20 procedures, Aetna’s consumer portal shows members how their plan has paid their claims, the balances remaining in their HSA/HRA and where they are with respect to meeting any applicable deductibles. While most members tend to be Internet-savvy, says Liss, the information is also available through Aetna’s customer service telephone line. Fees tend to be in a relatively narrow price range for the primary care specialties, and the range widens somewhat for subspecialties.

Aetna’s contractual arrangements with network physicians require that they accept the Aetna fee as payment in full for services rendered to plan members, even when the entire fee is inside a patient’s health plan deductible – which is typical of how high deductible health plans function. While the price transparency tool is only available to Aetna members, physicians have access to their own Aetna fee schedule for each Aetna product by calling Aetna’s provider services, says Liss.

When servicing a member enrolled in a high deductible health plan, Aetna asks providers to not collect any out-of-pocket payments from the patient until after the provider has submitted claims to Aetna, which processes the claim and informs the provider what the payment is for each listed service, how much is being paid by Aetna and how much the physician should collect from the member. Aetna also sends the member – and makes available on-line on its consumer portal – an Explanation of Benefits (EOB) notice which spells out the charge, Aetna’s contracted fee for that service with that physician, how much Aetna paid and how much the physician is to collect directly from the member. Each physician involved in the care of a patient bills separately and the EOB notices itemize billing information for each physician.

Aetna offers a debit card system for members enrolled in these plans to make out-of-pocket payments to physicians, with funds drawn directly from the HSA, which Liss says may make it easier for physicians to collect out-of-pocket expenses. So far, Aetna has not heard from physicians that bad debt and difficult collections have been more problematic in high deductible health plans than in other plans, he adds.

Aetna is expanding its transparency efforts – designating specialists in 20 selected markets who have met established thresholds for certain clinical performance and cost-effectiveness measures into its "Aexcel High Performance Network" based on clinical performance and cost efficiency. Aetna doesn’t offer Aexcel in Pa., however.

Aetna does not expect to explore hospital price transparency until sometime in 2007. According to Liss, there is much to be considered when developing a hospital pricing tool, as hospital rates can be very complex and do not lend themselves to an easy-to-understand price transparency model. Aetna does offer a hospital quality comparison tool, which displays information on number of patients treated per year, complication rates, mortality rates and length of stay, adds Liss.

HealthAmerica is the only other Pa. health insurer interviewed for this story that is currently offering a consumer portal that discloses physician cost data based on actual negotiated fee schedule rates, albeit at a regional rather than physician-specific level. The cost estimator tool discloses HealthAmerica’s negotiated reimbursement amount or per diem facility fee for about 40 of the most frequent hospital-based, outpatient or physician office-based services – displayed as a regional average cost within western, central or southeastern Pa., according to HealthAmerica CEO Robert Dawson. Listed services include various types of physician office visits, diagnostic tests and surgical procedures.

While it does not offer provider-specific cost information, Dawson notes that the tool does reveal actual cost averages, while demonstrating to consumers important cost differentials between setting, type of test, and type of physician: it reveals that the same service costs different amounts depending on whether it is delivered in a physician office, an outpatient setting or a hospital; some diagnostic tests – for example, a CT scan – are much more expensive than others – such as an X-ray; and a visit to a specialist – for example, a rheumatologist – is more expensive than a visit to a primary care physician for the same service.

The tool also shows how much HealthAmerica’s high deductible health plan members would be responsible to pay out-of-pocket under their specific plan – again, using the regional average cost for a procedure, Dawson adds.

Dawson says HealthAmerica will explore the possibility of making the price information provider-specific, but he notes that there are contractual issues about such disclosure that would need to be worked out.

HealthAmerica also offers a hospital quality comparison tool, which uses data from CMS, Agency for Healthcare Research and Quality (AHRQ) and other public sources, and is looking to refine the quality indicators at the facility level, with the goal of using them at the medical group level, notes Dawson.

Other Pa.-based health insurers are in various stages of launching or modifying price and quality transparency systems.

The Blue Cross Blue Shield Association (BCBSA) has launched a national program it calls "Blue Distinction," which has three components: a hospital quality transparency program, a price transparency demonstration, and a Blue Distinction designation for bariatric surgery and cardiac care centers that meet certain criteria – including procedure volume, provider credentials, equipment and staffing specifications, and process and outcome expectations.

Design of the Blue Distinction hospital quality program is typified by Highmark Inc.’s hospital quality comparison tool, which displays a range of one to four stars to rate individual hospitals on appropriateness of care for common conditions such as heart attacks, heart failure and pneumonia; on surgical site infection prevention; and on patient safety indicators – using measures from CMS and AHRQ. Hospital quality transparency systems have had a head start over price transparency tools, and similar hospital quality comparison tools – essentially allowing more accessibility to information that was already publicly available – are being offered by Pa.’s other Blue plans, as well as by other private insurers.

Seventeen Blue Cross and Blue Shield plans are participating in the price transparency demonstrations, which according to the association’s literature has two goals: "engaging consumers to enable more informed healthcare decisions and collaborating with providers to improve quality outcomes and affordability."

Highmark plans to launch a hospital price transparency demonstration in January, which will display cost information for 20 to 30 of the most commonly performed procedures in two formats: hospital-specific relative cost ratings displayed as a range of one to four dollar sign symbols for each procedure; and a dollar amount cost range for specific episodes of care based on a patient’s demographics and geographic location – along with a list of services normally used to treat a specific illness, explains Carey Vinson, M.D., Highmark’s vice president of quality and medical performance management. National average charges per procedure will be the baseline for the hospital cost rating tool, while Highmark hopes to move that baseline to regional average costs and eventually to Highmark’s average costs, says Vinson. The care cost estimator tool will display price ranges based on Highmark’s actual claims data, Vinson adds.

The hospital cost rating list includes mostly elective procedures for patients with chronic conditions – the ones who are most likely to seek the information and know what to ask about it, says Vinson.

Highmark expects to have some type of relative price ranking comparison tool for physicians, but Vinson says it will take at least a year to work out how to derive an accurate basis for its information. Some physicians have suggested that office care pricing should be made public – showing for example, that a vasectomy performed in a physician office costs $400, while it would coat $1,200 in an outpatient facility, says Vinson.

While Capital Blue Cross did not respond to interview requests for this story, BCBSA literature lists Capital is the only other Blue plan in Pa. that is offering a care cost estimator tool based on actual claims data.

Independence Blue Cross (IBC) has been offering a hospital-specific relative cost rating system to its members for over a year which, like the one planned by Highmark, displays one to four dollar sign symbols and a dollar amount range – both based on hospital charge data, says I. Steven Udvarhelyi, M.D., IBC’s senior vice president and chief medical officer. For the past few months, IBC has made available to its members a hospital treatment-specific cost estimator tool that aggregates actual payment data from several private commercial insurers at the regional level. While IBC has no definitive plans for its next version of a price transparency system, Udvarhelyi says it has been investing in its information capability and would like to make better use of its internal hospital and physician data to make cost and quality information more specific and meaningful to consumers, after first sharing that data with hospitals and physicians to get their input.

Many health plans offer tools other than price and quality transparency systems to support consumer decision-making, Udvarhelyi notes, pointing to IBC’s health management program which includes health coaches – RNs who help patients weigh risks and benefits of various medical treatments and procedures. Over the telephone, through interactive websites, and with the aid of videotapes and printed materials, the health coaches offer information in 20 significant medical decision categories, including surgical, cancer and chronic illness, to help patients work with their physicians to decide, for example, whether surgery is the best recourse in the first place for their back pain, notes Udvarhelyi.

Blue Cross of Northeastern Pennsylvania (BCNEP) hopes to unveil high deductible health plans in January and expects to launch a hospital price transparency tool in the future, after making the data available for review by facilities, says Leo Hartz, M.D., vice president of clinical advocacy and chief medical officer.

Geisinger Health Plan is in the process of implementing a hospital-specific cost and quality comparison tool for each of its product lines, using charge data for relative cost rating symbols, while the insurer is contracting with an outside vendor to develop reportable outcome data based on National Quality Forum measures for 20 or so inpatient procedures, according to Anthony Aquilina, D.O., regional medical director.

Those measures are part of the National Committee for Quality Assurance’s (NCQA) new accreditation program for hospitals, which requires public disclosure, while Aquilina notes that the NCQA will start a voluntary physician accreditation program next year using 20 measures in three areas: osteoporosis, eye care and surgical infections. While Geisinger is in a transition period – using its own quality reporting program with the help of a vendor – Aquilina believes the NCQA’s foray into transparency will shape what provider quality measures health insurers will disclose.

For the past four months, Geisinger has made available to its members a primary care physician report card disclosing in aggregate form practice-level grades – one to three stars – on nine measures, including HEDIS preventive and chronic health care measures, patient satisfaction, and case mix-adjusted efficiency, says Aquilina.

While Geisinger does not offer a physician price transparency tool, Aquilina says three of the report card measures relate to cost: a prescription drug utilization measure; an ER utilization measure; and an efficiency rating which reflects how a practice’s global, risk-adjusted cost for all episodes of care compares to peers.

Transparency Limitations, Concerns and Impacts

Employer groups have welcomed the emerging price transparency systems, while some analysts have questioned their utility. The hospital and physician communities have been cautiously receptive, while articulating concerns about the accuracy of information those systems portray and the administrative burdens that multiple reporting systems can pose. Many health plans appear to be sensitive to those concerns, saying they hope to modify their transparency systems as experience with the data evolve, while pointing out the tradeoffs inherent in rendering complex information intelligible and actionable by consumers.

Business trade groups have called CMS’s price transparency system an important first step in making consumers better educated on health care pricing and making health care-related decisions. HHS Secretary Leavitt touted the cost data as especially useful for the uninsured as they seek to negotiate steeper discounts from hospital charges, which Leavitt conceded could be three times as much as what the government or private insurer pays. The American Hospital Association (AHA) expressed skepticism, saying the information doesn’t answer insureds’ need to know what their co-insurance obligations are, and doesn’t help the uninsured obtain coverage. Various press reports also criticized the CMS system’s use of average cost ranges by county as too coarse to be useful to consumers wanting to know specific payment amounts for procedures at specific hospitals.

The cost-reduction capability of consumer-driven health care is still an attractive concept, although proponents of high deductible health plans and HSAs may be overestimating the power of price transparency, says Cliff Shannon, president of SMC Business Councils, which represents 4,000 employers, primarily in southwestern Pa. The information that CMS has made available – relatively complex inpatient procedures – reflects the wrong priority, as a person needing hip replacement or bypass surgery will easily blow through their insurance deductibles and lose all financial incentive to shop, Shannon notes, although he says he in encouraged by CMS’s promise that they will make available information on more "shoppable" procedures.

Complexity and variation of information also needs to be addressed. "You can’t even begin to understand hospital pricing unless you have a CPT code book in front of you," says Shannon, adding that consumers need to know what questions to ask about their care and its cost, e.g., whether their mammogram should be digital or analogue, and how much a physician reading fee adds to the cost. While it may be difficult for consumers to figure out different carriers’ approaches to price transparency, Shannon believes the details can be made intelligible over time, especially if Medicare steps in to codify the definitions and categories involved. Employers might also provide ombudsman services to help employees understand the complexity of medical cost factors, he adds.

Price transparency systems are also a boon to payors and employers, who would be in a better position to understand "what things really cost" in a health care marketplace where pricing is "designed to be unintelligible," says Shannon. An employer struggling to pay for health care coverage, for example, might not like it upon learning that private insurance pays a highly-reimbursed institution 20 percent more than what Medicare pays, while reimbursement rate differences among institutions become legitimate public policy questions when a UPMC, Penn or Hershey are doing well and several community hospitals – which are paid a lot less – are struggling or facing closure, Shannon says.

Health care transparency in worthwhile and necessary, but confronts several serious limitations, according to Karen Davis, Ph.D., president of the Commonwealth Fund. In testimony delivered before the Energy and Commerce Committee Subcommittee on Health this March, Davis and a colleague acknowledged that transparency and better public information on cost and quality are essential to help providers improve by benchmarking their performance against other providers, to encourage private insurers and public programs to reward quality and efficiency, and to help patients make informed choices about their care. "But it is unreasonable to expect that information on prices, total bills, and quality will cause the health care markets to perform like markets for other goods and services," Davis testified, because health care is not a "homogeneous commodity" and "conditions required for perfectly competitive markets do not exist in health care, making the health care market quite different than markets for other goods and services."

"Patients will never have as much information about the care they need as the physicians who care for them. Health care decisions are often made under emergency conditions and emotional stress. Both the insurance industry and the health care delivery sector are highly concentrated, leaving patients with few genuine choices," Davis testified.

Patient use of information is not likely to "transform health care," according to Davis, since most health care costs are incurred by those who would not be in a position to shop for their health care – very sick patients often under emergency conditions – and higher cost-sharing is misguided because there is considerable evidence that patients with high out-of-pocket costs – particularly those with poorer health or lower incomes – are far more likely to delay, avoid or skip health care because of cost.

There is often no standard set of services that is provided to patients with a given condition, according to Davis, and the total bill depends on the tests ordered, the length of hospital stay and the number of specialists consulted – most of whom the patient with a complex or serious condition cannot choose – anesthesiologists, pathologists, radiologists – while no one provider quotes a price for all of the care needed over time for an acute episode or for a chronic condition.

Studies systematically find that public information on quality is not used by patients, Davis noted, pointing to pioneering efforts by Pa. and New York in publishing cardiac surgery mortality by name of surgeon and hospital, yet few patients avail themselves of this information.

Provider response to public information, on the other hand, is one of the strongest arguments to public reporting, said Davis, citing studies of quality improvement by hospitals and physician groups that reported quality data publicly and made improvements after investigating reasons for poor performance.

It will be at least five to ten years before systematic information on health care quality and cost is available, and then only if the federal government provides leadership to develop better databases, Davis maintained. Medicare could, for example, forge public-private partnerships to create a multi-payer database using uniform quality metrics and transparent methodologies for adjusting quality and costs, and a National Quality Coordination Board within HHS could be created to oversee development of quality and efficiency measures, ensure timely collection and reporting of them and encourage their incorporation into public and private pay-for-performance payment systems, according to Davis.

In defense of the rationing incentive accompanying high deductible health plans, Shannon believes that consumers will learn to ration care appropriately as they gain more experience with increased cost obligations, which will require them to become increasingly aware of the consequences of their behavior. The long-term security of the U.S. health care system requires that individuals be accountable for their lifestyle decisions and learn that their health and financial security are at stake, believes Shannon, adding, "You’re bringing rationality to your health, not rationing."

Health insurers have cited data that such responsible behavior is possible. A recently released study by UnitedHealth Group Inc., which sampled 55,000 workers from 2003 through 2005, found that people who have high deductible health coverage plans are less likely to use the emergency room and have fewer hospital admissions than people with traditional coverage, and also are more likely to regularly visit their primary care doctor for free preventive checkups. A recent Blue Cross and Blue Shield of Minnesota study also found that consumers with high deductibles were more likely to use more preventive services (39 percent) than those with open-access plans (34 percent).

Health care providers are starting to weigh in on how price transparency systems develop.

In a policy statement on hospital pricing transparency, the AHA said it supports the concept and promotes several objectives to provide meaningful information to consumers:

· Present information in a way that is easy for consumers to understand and use.

· Make information easy for consumers to access.

· Create common definitions and language to describe pricing information for consumers.

· Explain to consumers how and why the price of their care may vary.

· Encourage consumers to use price information as just one of several considerations in making health care decisions.

· Direct consumers to additional information about financial assistance with their hospital care.

"In any kind of disclosure, the details matter," says Paula Bussard, the Hospital & Healthsystem Association of Pennsylvania’s (HAP) Senior Vice President of Policy and Regulatory Services. Because various price and quality reporting systems exist at both the federal and state levels, Bussard hopes that there will be some comparability of information across them, so as not to create consumer dissonance. Many factors influence a hospital’s reimbursement, she notes, including whether or not it is a teaching hospital, what its uncompensated care burden is, and the intensity of care it provides relative to the complexity of its patients. HAP, AHA and other provider groups are urging CMS to use consumer focus groups to discover the optimal level of detail necessary to make the complexities of Medicare’s prospective payment system understandable to, and actionable by the general public, while HAP has put together a task force to delineate criteria for price transparency systems, hopefully by the end of the year, Bussard adds.

The Medical Group Management Association (MGMA) regards price transparency systems as useful and appropriate, and has detailed a number of concerns, particularly the burden that the administrative complexity of dealing with multiple third party payors places on physician practices. The MGMA recommends that payor and provider contracting should be simplified by creating standard contracts at the state level, including standard effective date and contract terms, while standardized forms should also be developed for billing and payment processes, and for credentials verification.

Confidentiality provisions in provider-insurer contracts are also a concern, and the MGMA wants those contracts to specify that disclosure of insurer fee schedule information to patients is permissible, says Michele Johnson, MGMA’s senior government affairs representative. The MGMA wants insurers to be required to release fee schedules – including methods used to calculate fees – to physicians and hospitals as part of their provider contracting process. Johnson notes that Aetna’s physician price transparency approach represents a successful system that avoids saddling physicians with added administrative or confidentiality burdens.

Transparency systems must link price with quality information, Johnson says, noting that some do not; and those that do, often rely on gross measures of quality such as 30-day readmission rates and adverse event frequencies instead of valid metrics that accurately adjust for risk and severity of cases. The MGMA maintains that quality transparency systems should avoid the chaos of having multiple programs and collecting and reporting different measures – and instead should use only measures developed by the American Medical Association-convened Physician Consortium for Performance Improvement, which has so far developed over 90 evidence-based performance measures on 16 clinical topics, all of which have been validated by the National Quality Forum, a private organization charged by Congress with endorsing consensus-based national standards.

"It matters what measures are being used and how they are collected. It may not be possible to move the quality dial on some of them, or may be too costly to measure. It is not okay for health plans to cook up their own measures for quality," says Johnson.

The MGMA also calls upon providers to use the Patient Friendly Billing Project’s glossary of terms as a standardized set of consumer-friendly pricing definitions for commonly used clinical billing terms.

Health plans are not in agreement over what level of detail is optimal for price transparency systems. Some believe that relative cost ratings, rather than unit price information per procedure, are the most detail that consumers need or want to have. A multiple star or dollar sign rating is the best format to allow consumers to make benchmark comparisons, while there is a higher potential for misunderstanding if too much numerical precision is displayed, believes Geisinger’s Aquilina. "We may be happy if a physician’s HEDIS mammography screening rate is 80 percent, but a consumer may question why it isn’t 100 percent – when lower rates could be unrelated to a physician’s intentions," he illustrates. "Transparency data should be made useable for as many consumers as possible. There is a risk of making the message too complicated, and that will dilute the message," he adds.

"If I’m going to be spending money out of my pocket – from an HSA or other plan – I would want to see actual dollar costs, not averages or four-star approaches – which are not all that useful," says BCNEP’s Hartz, who also recognizes the marketplace difficulties raised by producing that information. Given that there are four Blues plans in Pa., each of which can contract fee schedules on its own with providers, says Hartz, "If you start publishing that information, it may raise concerns about collusion or price-fixing."

All health insurers interviewed for this story acknowledged the clinical obstacles to producing accurate and valid health care pricing and quality information for consumers.

Highmark’s Vinson illustrates several barriers to robust and meaningful quality transparency alone: The health care industry is currently dependent on claims data, which does not pick up outcomes information and, while inferences can be made, information about quality of a provider’s care is limited. It is difficult to use small numbers to get statistically valid provider quality measurements, given that 99 percent of care is routine, a great surgeon has one serious complication in 1,000 cases and a mediocre surgeon has three. Measurable aspects of care may not be of interest to consumers, such as the rate that a physician tests for streptococcus before prescribing antibiotics. "Highmark has discovered that there is very little difference in what physicians do, for example, when providing prenatal care. Trying to come up with indicators that differentiate providers has not been easy," Vinson adds.

Vinson says that quality transparency must accompany price transparency and he sees NCQA-like certification programs as promising sources of quality measurements that can be attained and touted to the public.

Rendering accurate, meaningful and discrete cost data is a greater challenge, Vinson believes. Highmark is still discussing how to show provider-specific cost information, which Vinson says must take into account the many influences on cost, including patient severity; provider specialization; bills submitted late in an episode of care – such as anesthesiology; distinguishing which services were rendered by which providers during an episode of care – e.g., ER physician, hospital, primary care physicians, one or more cardiologists, anesthesiologists, and other specialists; and differences in negotiated rates among providers. "If I spend five to six days in a hospital, I’ll be seen by seven physician groups. Once out of the hospital, I’ll be treated by several more," says Vinson.

Hospital fee contracts entail additional complexities that impact reimbursement rates, and Vinson says that most of them were crafted before the transparency movement and were not intended to be available to the public.

"It will take longer before we get to the level of price transparency detail that does not mislead customers, and is fair to physicians and hospitals," Vinson notes.

Aetna acknowledges that there are obstacles to creating a meaningful price transparency system for consumers, including translating the nuances of CPT codes into understandable units. While the code for removing sutures is simple enough, a standard follow-up problem office visit has five different codes, each corresponding to a different patient complexity level, notes Liss. A diagnostic colonoscopy has a different code from a colonoscopy with biopsy, but the consumer won’t know which cost will apply ahead of time when walking in for the screening.

Aetna made some modifications to its coding fee disclosures after conducting focus groups with physicians and office staff, says Liss: "Physicians encouraged us not to list discrete time components in CPT descriptions out of concern that patients would make demands such as, ‘I still have five minutes on the meter, doc.’" Aetna includes explanatory notes that try to give consumers a sense of the vagaries in coding that will determine the ultimate claim, says Liss.

A separate cost projection tool allows Aetna members to get an estimate of the cost of procedures involving several ancillary services. While the price transparency tool will tell how much a surgeon’s fee will be for a laparoscopy, Aetna’s "Price-a-Procedure" tool will tell how much the average cost of a laparoscopy procedure is in a given geographic area, including all the ancillary costs for anesthesia and facility, says Liss. "We acknowledge that this is just a first step and that consumers will need even more robust information in the future," he adds.

Liss also notes that Aetna expected physicians to be extremely concerned about the new price transparency system, but instead found that they were "reasonably neutral on this whole effort."

Whether and to what extent consumers will use transparency data remains to be seen. Preliminary data suggests that price transparency systems can influence consumer behavior. According to Aquilina, a national Kaiser Family Foundation study last year noted that 11 percent of adults have negotiated with a physician, hospital or other health care provider to get a lower price. Available pricing data could increase that number, Aquilina believes.

Based on Aetna’s experience with their physician price transparency system in Cincinnati, which it initiated last year, fewer than ten percent of Aetna subscribers have used the system, but more than half of those who have used it were enrolled in health plans other than Aetna’s HSA, which Liss says reflects an interest by consumers in health care costs that is not tied to first dollar cost exposure. Between 600 and 1,000 consumers a month have visited the price information, and increased usage happens at two specific times: as consumers choose their new benefits for the year ahead (typically in the fall) and as consumers begin to use their new benefits (typically in January).

Aetna’s preliminary findings give it comfort that high deductible health plans do not lead to reductions in the preventive and chronic care services which one might think patients would forego. For example, says Liss, diabetics in such plans continue to get monitoring tests at the same rate they did in traditional HMO and PPO plans. Even if a member has not yet reached their deductible, certain preventive services are covered without being subject to a deductible and would be paid by Aetna, he adds.