One reason is that the healthcare price websites operated by most states are inadequate, ‘poorly designed or poorly functioning’
Efforts to encourage price transparency at hospitals and other providers are making little progress. That’s one conclusion to be made from the second annual Report Card on State Price Transparency Laws, that gave a failing grade to 45 states.
This information is relevant because more consumers are now enrolled in high-deductible health plans. As a consequence, clinical laboratories and anatomic pathology groups must now handle requests from patients who want to know the cost of their medical laboratory testing in advance of service. As well, many of these consumers want to negotiate prices with their laboratory provider.
Most States Get Poor Grades for Price Transparency
Only two states got the highest grade for price transparency, according to the press release about this year’s price transparency survey that was issued by two nonprofits that created it. One organization is the Catalyst for Payment Reform (CPR) and the other is the Health Care Incentives Improvement Institute (HCI3).
The two states scoring highest were Massachusetts and New Hampshire. Each received a B−. Among the next highest-scoring states, Vermont maintained its C grade from a year ago, while Colorado and Virginia slipped from a B to a C in 2014, with the addition of new criteria as part of the survey.
If consumers have difficulty getting a straight answer about what a procedure will cost, it’s because state laws allow hospitals and other providers to hide the cost from patients until they are billed. That’s one conclusion from this annual study.
2014 Report Card Took Deeper Look at State Transparency Efforts
For 2014, this survey examined existing price transparency laws in all 50 states. It graded them based on well-defined criteria by how well they support the information needs of consumers, noted Francois de Brantes, HCI3 Executive Director. He wrote this in a letter of introduction that explained how the 2014 Report Card was developed. “In this year’s Report Card, we decided to raise the bar, no longer grading state laws on a curve, as we did in 2013,” he said.
Presented above is the chart that was released by the second annual Report Card on State Price Transparency laws. As it shows, only five states got a grade that was higher than an “F.” Officials at the two organizations that published this study say that one reason for the poor performance on price transparency at the state level is the fact that most states have laws and regulations that allow providers to keep their price information private. (Graphic copyright the Healthcare Incentives Improvement Institute.)
“We also decided to take a deeper look at whether these laws were achieving the ultimate goal—ensuring consumers have access to meaningful information about the price of their health care,” de Brantes added. “For this reason, we expanded the scope of our inquiry to examine not only state laws on the books, but also states’ price transparency regulations; price transparency websites; and all-payer claims databases (APCDs), the ideal source of data for these websites.
Francois de Brantes (pictured above) is the Executive Director of the Health Care Incentives Improvement Institute. He said that, in taking a deeper look at the success of state transparency efforts in 2014, states that scored the highest grades on the 2013 Report Card on State Price Transparency Laws were downgraded in 2014 due to inadequate, “poorly designed, or poorly functioning,” state-mandated websites. (Photo copyright Health Care Incentives Improvement Institute.)
With State Websites Added to Scoring, No State Received an A Grade
The websites for each state were evaluated on four criteria:
- Scope: The number of services listed by hospital, with information provided by physicians and hospitals, and price information based on paid amounts.
- Ease of Use: Whether the website uses clear language; is easy to navigate; has a straightforward layout; search function by provider, procedure/service, and health condition; and the number of clicks to get to desired information.
- Utility: Whether the website contains estimates of consumer out-of-pocket based on insurance plan and contains side-by side, comparisons of quality and price information by providers.
- Accuracy/Data Exchange: Currency of data (2012 or more recent) and whether website is fed by a reliable, accurate data source, such as APCDs.
“Some states have robust price transparency laws and regulations, requiring them to create a publicly available website with price information based on real paid claims information,” continued de Brantes. “But in reality, the public can’t readily access that information because the website is poorly designed, or poorly functioning.
“Given that so many state-mandated websites are inadequate, once we included websites into our review and grading, no state received an ‘A’ in this year’s Report Card,” he observed, noting for example, that New Hampshire—which received an A in last year’s Report Card—dropped to an F this year, because its website is inoperative and may remain so for an extended period.
Useful, Free Consumer Transparency Tool to Be Rolled Nationally in 2015
While most state websites are doing a poor job of helping consumers access healthcare pricing information that is useful or relevant to individual health plans, a consumer-friendly solution will soon be available. In early 2015 the Health Care Cost Institute (HCCI) will launch a free, publicly available, online price-transparency tool that promises to do a better job.
The HCCI tool will combine pricing data from the nation’s top health plans, including Aetna (NYSE: ATE), UnitedHealthcare (NYSE: UNH), and Humana (NYSE: HUM).
The HCCI transparency portal is designed to help consumers make informed healthcare decisions by including password-protected access to prices related to their specific health plans. (See Dark Daily, “Aetna, Humana, and UnitedHealth Agree to Share Data with HCCI to Give Consumers a Free, Comprehensive Source for Comparing Healthcare Prices and Quality,” July 9, 2014.)
It is not known whether the HCCI transparency portal will include information on the prices of clinical laboratories and pathology laboratories in each state. However, because of surging enrollment in HDHPs, every medical laboratory in the United States would be well served to have a strategy in place to respond to this trend, because more patients will want this information when selecting the lab they want to use for their testing.
—By Patricia Kirk
Related Information:
REPORT CARD ON STATE PRICE TRANSPARENCY LAWS – 2014
METRICS FOR TRANSFORMATION - TRANSPARENCY
Fewer States Make the Grade this Year on Health Care Price Transparency for Consumers
