Shortcomings of Transparency Tools

Submitted by on Sunday, March 1, 2015 - 06:21

Newtown, CT – February 27, 2015

A Guru is usually a wise man who provides thoughtful advice on complex life problems – this week, a new type of "guru" surfaced, the website launched by the Health Care Cost Institute, While there is much to laud about this site, there are also some very serious shortcomings that are both unfortunate and avoidable. On the good side, the site is easy to use, well organized and gets you to an answer in just a few short clicks. One of the better features is the provision of a list of expected or "core" services for the treatment of a particular illness or condition. On a less positive note, and given the significant amount of data available to it, HCCI fails miserably on the usefulness of pricing information given. Contrarily to efforts from health plans like BCBS of NC, or the recently announced transparency tool from Priority Health, Guroo gives consumers comparative prices on a small number of individual services, or "bundles" of services that are very narrowly defined. That's not helpful because it masks the actual experience that consumers will have when they receive care for a real episode of care. Let's take a couple of concrete examples. Guroo provides a national estimate of yearly Asthma costs of $638, with a tight range of $515 to $804. Our analyses suggest that the average annual cost of treating a patient's Asthma is actually $1,120 with an upper range that can exceed $10K. Pregnancies, deliveries, and neonate costs are also on the low end and present a tighter range than what our data suggest. Perhaps that's because we take into account the occurrence of avoidable complications, acute exacerbations, and other events that do occur, and many of which are the result of care defects.

What this means to you – A few weeks ago we issued a report with our colleagues from CPR that outlines the shortcomings of many transparency tools, and the methods that can be used to compensate for those shortcomings. While Guroo does provide consumers with ranges for the "bundles" they've defined, that variation is pretty tight and reflects a tight definition of those bundles. That's less than helpful because it can, in fact, lead to false positive conclusions for consumers. In other words, if you fix the type and frequency of services in defining an episode of care, then the only variable left is price. And while price is important, a low price on a fixed set of services can mislead a consumer to selecting a provider that, in the end, will be far more costly than another because they use more services. If you fix the type of service, then the two variables left are price and frequency. If you don't fix any, then the three variables interact to represent that actual variability endemic in health care and that consumers will experience. And it's essential that all of us who are fighting for greater transparency reveal the totality of the variability that exists and not try to artificially mask it. If Guroo was challenged in defining real episodes of care or "bundles", then we suggest they leverage our Open Source definitions. By potentially masking the truth and misrepresenting the actual variation in the price of health care, this Guroo has acted a lot more like a Shyster. Let's hope it finds some much needed enlightenment.