Health Care Price Transparency: A Multifaceted Challenge

By Emily Newhook 

“In 2014, we make purchasing decisions for every other commodity based on transparent price and quality information (think Yelp, Travelocity),” says Dr. Neel Shah, CEO and Co-Founder of Costs of Care. “Why not health care too?”

Dr. Shah makes a great point: If you ask the average consumer what they might expect to pay for an iPad, and a quick Google search can break it down pretty quickly. New or refurbished? Best Buy or Amazon? The information needed to make this kind of purchase is plentiful, and the barriers to obtaining it are few. It’s also likely that the consumer could already make an educated guess about how much a product like this could cost. Ask that same consumer what they’ll pay for a mammogram, or a broken toe, or just a few stitches, however, and it’s less likely that they’d have a quote in mind, much less how to find one or an idea of what they should pay. Health care pricing has long been murky (at best) for many consumers, despite the fact that the bill for a single injury or illness can be financially debilitating.

Considering this, the George Washington University’s online master of public health, MPH@GW, created a series of in-depth profiles of several organizations working to facilitate increased transparency in health care pricing: “Illuminating Health Care Prices: Organizations to Watch.” It’s important to note that the list isn’t all-inclusive – there are many organizations, individuals and companies doing excellent work in this vein that aren’t profiled here – but it should help explain a few of the methods being employed to help release, aggregate, analyze and translate useful information about health care prices.

Some organizations—Healthcare Bluebook, Clear Health Costs, and FAIR Health — have all created consumer-friendly tools that help consumers shop around for prices. The Health Care Cost Institute (HCCI), additionally, is partnering with three major insurers – UnitedHealthcare, Aetna and Humana – to “develop and provide consumers free access to an online tool that will offer consumers the most comprehensive information about the price and quality of health care services.” The immense undertaking marks the continuation of a common theme for HCCI, which has historically grappled with a major practical challenge of price transparency: organizing the sheer volume of health care data that already exists: “The world has been, for the past two years, mesmerized with the concept of big data, and big data can be messy,” says David Newman, Executive Director of HCCI. In short, when the data becomes transparent, we need to ensure that experts and analysts equipped to draw conclusions are able to access it with ease.

Even as these tools become more comprehensive and easier to use, however, it can still be difficult for patients to make these decisions without the help of someone who understands which procedures are necessary and cost-efficient – and that’s where organizations like Cost of Care and initiatives like Choosing Wisely come in. Dr. Shah was in medical school when he first realized that many of the best doctors around him were making decisions in a vacuum, and failing to account for the fact that they way they treated patients could have serious and sustained impacts on those individuals’ respective financial situations. “Meanwhile, I was helping care for patients who were struggling to pay their medical bills,” Shah says. “Costs of Care was started to address this disconnect.”

Encouraging physicians to make responsible treatment decisions with regard to cost is especially important in instances when patients don’t have time to compare prices – such as in an emergency. “The fact that patients are not always well-positioned to understand the trade-offs and costs of every medical decisions is precisely why it is so important for the clinicians who decide what goes on the bill to know how they are impacting the patient’s wallet,” Shah told us. “After all, if you bankrupt your patient—particularly with tests that are not needed—you are not helping them.”

With this in mind, Shah and his team have focused on helping clinicians understand why considering cost is important and teaching them how to assess and implement that knowledge. The Teaching Value Project – which is funded by the ABIM Foundation, another organization profiled in “Illuminating Health Care Prices” – is comprised of “interactive web modules designed to be easily accessible to anyone to learn about reasons for overuse and how to screen and counsel patients to reduce their out-of-pocket costs,” says Dr. Vineet Arora, Costs of Care’s Director of Education Initiatives.

As health care costs continue to rise, price transparency is more important than ever. To read more about others helping to achieve and support transparency in health care, check out the original round up here.

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Emily Newhook is the community relations manager for the online MHA program (MHA@GW) and the online master of public health (MPH@GW) offered through the Milken Institute School of Public Health at The George Washington University. Follow her on Twitter @emilynewhook.