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    Three attributes of successful healthcare cost transparency tools

    Given the significant cost variances across healthcare providers for the same procedures and services, cost transparency tools are one way that health plans can educate their members about available options and encourage them to be active consumers of their healthcare, says Tom Meier, vice president of market solutions, Health Care Service Corp.

     

    MobleyMobleyAlthough many plans now offer cost transparency tools, Erica Mobley, director, communications and development, The Leapfrog Group, says most have significant shortcomings. For example, some fail to share sufficient information on the safety and quality a patient can expect to receive for that price. “Patients need tools to help them find the highest value care, i.e., the right care at the right price. Unsafe, low-quality care has no value, regardless of the price.”

    Another problem is that reportedly, many of these tools have actually resulted in higher spending, not lower expenditures as tool developers and others had anticipated. This was reported in a 2016 study in JAMA “One reason behind this is that people tend to associate higher cost with higher quality, which further reinforces the importance of incorporating quality data into any cost transparency tool in order to ensure [these tools] don’t have an adverse effect on spending,” Mobley says.

    Ashraf Shehata, MBA, MHA, advisory leader for health plans and member of KPMG’s Global Healthcare Center of Excellence, KPMG LLP, also maintains that there’s a lot of room for improvement. “Many comparison shopping tools online only cover the most common procedures and a lot of providers are not eager to publish pricing information online,” he says.

    What patients want

    Consumers are looking to transparency tools to help them determine where to receive treatment, how to lower out-of-pocket expenses, and how to evaluate the quality of the services they will receive. More consumers are becoming mobile, often researching physicians and care options while on-the-go in real time.

    MeierMeier

    Here are three attributes of successful transparency tools:

    1.     Ease of use. “Health plans need to develop easy-to-use digital transparency tools that help cut through confusion, highlighting differences in cost and quality between providers,” Meier says. “In addition to digital solutions when choosing a provider and making an important healthcare decision, consumers often want to have a conversation with someone. By providing digital and telephonic transparency solutions, we can empower members to make informed decisions and engage with them in the channel of their preference.”

    Mobley says consumers are used to accessing easily digestible and readily available information through their smartphones and tablets; a cost transparency tool shouldn’t function any differently than other apps such as Yelp or TripAdvisor that they would use to research a service or amenity outside of healthcare.

    2.     Tailored to the individual. Members want to ensure that the information they view is personal. “They want tools that accurately predict the overall cost of tests, procedures, and treatments while calculating their unique out-of-pocket expenses,” Meier says. “They also want information and costs that apply to their specific health benefit plan so they can estimate their cost of care regardless of where they are in the benefit year.”

    3.     Trustworthiness and reliability. Shehata believes patients desire to be confident that they will be covered and won’t have any unexpected fees sprung on them after a healthcare encounter. “This has become even more important as more people are getting coverage through high-deductible plans,” he says. “If someone is responsible for the first $2,500 to $5,000 of out-of-pocket healthcare costs, comparison shopping is important and necessary. Although there isn’t much time to bargain in an emergency, there is time to compare costs for elective procedures. Prices for procedures can vary widely, so this type of transparency levels the playing field for patients.”

    Next: Increasing usage of tools

     

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