HCI3 Update from the Field: Welcome NC to the Land of Transparency

Submitted by francois.debrantes@hci3.org on Friday, August 23, 2013 - 04:45

Newtown, CT – August 23, 2013

"For too long, North Carolina patients have been in the dark on what they can expect to pay for common medical procedures when they are admitted to a hospital. This new law gives patients and their doctors pricing information so they can make an informed financial decision with regard to their healthcare."

-Governor Pat McCrory, North Carolina.

And with that, North Carolina, which had gotten an F on our state report card, will likely jump to a B, and perhaps even an A depending on how easily they make it for consumers to find this pricing information. North Carolina's actions follow that of many other states in recent months that have taken very seriously the need to provide consumers with accurate and actionable information on the price they have to pay for healthcare services. As is often the case, while the federal government continues to figure out what it's going to do, States are getting it done. Before we rejoice, however, let's pause and consider that information on health care prices is only part of the critical set of data needed for patient choice. The other is information on the quality of care. And believe it or not, the state of the union is actually worse on that front than pricing transparency. As a result, in a couple of months we will issue a new state report card that ranks all states on the availability of quality information on clinicians, and this recent investigative report by USA Today reminds us how important it is for consumers to know about the quality of care delivered by physicians. Make no mistake about it, transparency of cost and quality is as essential to the proper functioning of the market as payment innovation.

What this means to you – This editorial from Catholic Health Initiative's leadership sums up the opportunity for the country created by changing payments, and the challenge for hospitals and health systems to shift to that mindset. Clearly, not everyone espouses that spirit as can be seen by the continued "land grab" occurring across the country. It certainly is difficult for me to reconcile a reduction of bed days with the desire to purchase existing facilities, and the essential market discipline created by transparency is the only weight that will tip the balance in favor of market restructuring. That's because despite the PR spin by public and private sector payers, the payment changes are still anemic. So hospitals and health systems continue to find themselves in two camps, and the temptation to simply raise price to compensate for lower admissions is significant, as opposed to reorganizing care to create better margin opportunity. Compounding the slow move to new incentives are known design flaws in current experiments. For example, the Bundled Payment for Care Improvement pilot relies on DRGs as the focal point for assembling bundles, but even 3M disavows the validity of that approach. The battle to achieve true affordability and quality of health care requires a multi-pronged approach. Well-designed payments and benefits, coupled with transparency will create a high-value health care market, and we must continue to get both done right. Today, we celebrate NC's efforts to help create such a market.