Transparency – Metrics for Transformation

Transparency – Metrics for Transformation















Note: Map only includes price transparency scores…will update with the new quality transparency scores later in the year.

What is Transparency?

Markets cannot function without transparency. If a buyer cannot distinguish the differences in price and quality between suppliers, then there cannot be an efficient market. The asymmetries between buyer and seller are so significant that only the seller/supplier knows the value of the services provided/sold. The US health care industry is, by and large, completely opaque. As the number of consumers in high deductible/high co-insurance health insurance plans continues to grow, market opacity prevents consumer-patients from comparison-shopping. And since fear of market loss is a significant concern for many providers, there has been a tendency to block attempts at greater transparency.

For example, many providers (or payers) have included “gag clauses” in their contracts, which prohibits a health plan or health care provider from divulging the true costs of services rendered during the management of a patient. In addition, while quality data is more readily available thanks to public sector efforts, the availability of easy to understand quality ratings on hospitals and physicians has been spotty, at best, with the notable exceptions of the Leapfrog Group’s hospital safety score, the Aligning Forces for Quality transparency efforts and the Bridges To Excellence Recognitions.

In an effort to increase price transparency, many states have enacted legislation with provisions for public reporting of pricing and quality information across providers and, in some cases, specific to certain payers operating in that state. However, the scope and depth of transparency legislation varies significantly by state – some require that pricing be posted on a state website or published in a formal annual report; others require participation in an all payer claims database (APCD) and empower the APCD manager to publish detailed quality and cost of care reports, by provider.

This variation in state regulations (barring federal regulation) seems inevitable, and suggests a process for better understanding the strength of such legislation by state. That’s because until such time as all states have robust and comprehensive legislation that provides a right for individual consumer-patients to fully understand the price and quality of the services for a specific medical event, we cannot expect a functional market for health care services to be developed.

This draft legislation provides state lawmakers with a starting point for enacting legislation that would meet the needs of the different stakeholders in their State, including consumers, employers, health plans, and referring practitioners.

What We Are Doing To Impact This Measure

HCI3 has developed analytical tools that can calculate prices for various episodes of medical care, adjusted for the severity of a specific individual, and that price can be the officially negotiated price between a provider and a payer for the care of a specific individual. In turn, that price can be communicated, up front, to the plan member so that an individual can know ahead of time what they will have to pay out in deductibles, co-pays or co-insurance. That’s an essential element of a functioning market.

In addition, we’ve developed INQUIREhealthcare, a free app that can be downloaded on a tablet or a smartphone and enables the user to find clinicians in their local area who demonstrate high quality care based on national standards of quality. These physicians have shown that they can manage patients with certain chronic conditions effectively. It also includes the Leapfrog Group’s Hospital Safety Scores, which provide hospital safety ratings such as how well hospitals protect patients from accidents, injuries, harm and error.

Finally, we’re also working with specific community leaders in helping them understand the importance of transparency to improving the affordability and quality of health care, and providing them with analytic support to publish average costs of medical episodes.

Transparency Report Cards

The Report Card on State Price Transparency Laws

In this year’s Report Card, as we did with the 2014 report, we review whether states had passed laws or regulations requiring health care price information be made public. In addition, we examined how well those laws were being put into action by providing residents with access to meaningful price information through public websites and the use of all-payer claims databases (APCDs) as data sources for those sites. We discuss the important role for APCDs in Appendix II. The results of our analysis show few changes since last year’s report: 90% of states fail to provide adequate price information to consumers.


State Report Card on Transparency of Physician Quality Information

In addition to price, the availability of quality information of physicians is critical to aid consumers in making informed and effective health care decisions. This report card reviewed what quality transparency efforts were in each state and assigned each state a grade based upon the number of primary and specialty care physicians for whom health care quality information is publicly reported. The report card also accounts for the scope of measures reported and the ease of accessibility of the information.

Transparency of physician quality was scored on three main categories consisting of the scope of transparent information, measures, and the accessibility of information and then broken down into sub-categories. The points combined in the sub-categories created a total score which was based on the grading thresholds. The table below shows the total possible points a state could receive.

Please refer to the State Report Card on Transparency of Physician Quality Information for more detail regarding the measures and methodology by which health care quality transparency was graded in each state.

Grading thresholds are as follow:

A: 60 to 100
B: 50 to 59
C: 40 to 49
D: 30 to 39
F: 0 to 29

Data Source

Data Sources for the State Report Card on Transparency of Physician Quality Information include the NPI Registry, The Robert Wood Johnson Foundation National Directory for comparing health care quality and state-specific sites devoted to public transparency of health care quality.