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Healthcare // Patient Tools
03:02 PM

Why Healthcare Cost Reports Fail Consumers

Healthcare cost reports are doing little to help consumers pick quality providers or save money, for themselves or the healthcare system at large, expert says.

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How do you define "quality healthcare"?

Unfortunately, far too many people equate more care and higher costs with high quality. Further, reports intended to help consumers choose lower-cost healthcare services may have the unintended effect of driving them away from more affordable providers that may in fact be better than more expensive ones.

"People do say that they care about the quality of [health]care," according to Judith H. Hibbard, a senior researcher at the University of Oregon's Institute for Policy Research and Innovation. But does the average American really understand what "quality" means in healthcare? Probably not.

Hibbard helped author an article in the policy journal Health Affairs--published by the well-known charity Project Hope--that suggests public healthcare cost reports are doing little to help consumers pick quality providers and save money, for themselves as well as for the $2.7 trillion-a-year U.S. healthcare sector.

"[T]he evidence to date suggests that many consumers believe more care is better and that higher-cost providers are higher-quality providers. This belief raises the possibility that public reporting of cost measures might have the perverse impact of increasing costs," the article stated.

[ CMS has released new clinical quality standards for eligible providers. Read more at Feds Release New Healthcare Quality Measures. ]

"Consumers might interpret 'lower cost' as evidence of scrimping on care and therefore low quality. This association between costs and quality is powerful. Consumers know that in most aspects of their lives, higher-price goods and services are often better than lower-price goods and services," the authors continued.

Cost reports today also tend to list the overall price tag of various procedures as billed to insurance companies, not the out-of-pocket costs paid by individuals. "Therefore, the majority of consumers have no practical interest in these data," explained the article. "Although the total cost of care contributes to increasing health costs--and, therefore, higher premiums and lower income after expenses for consumers--it is unlikely that most consumers will change their behavior based on these considerations."

Quality--defined as the likelihood of the right patient getting the right care at the right time, without complications, omissions, or other medical errors--barely registers. "Most people don't know that there are widespread quality problems in healthcare," Hibbard told InformationWeek Healthcare. Instead, people tend to choose providers based on unscientific factors such as word-of-mouth, convenience, and whether a doctor or hospital is in their insurance plan's network.

True information about quality tends to be buried in arcane repositories such as Health Affairs and other academic journals, or on hard-to-find Web pages that are not exactly consumer-friendly.

For example, the New York State Department of Health offers a fairly succinct response to the widely held fallacy that good insurance coverage means good, affordable care: "Although having insurance increases access to the healthcare system, it is not sufficient to ensure appropriate use of services or care that is of high quality." However, the department's URL doesn't exactly roll off the tongue: http://www.health.ny.gov/prevention/prevention_agenda/access_to_health_care/. Also, the page is filled with statistics and references that many consumers might not understand.

"We need to find people where they really are," Hibbard said. "Put information in front of them, and make it relevant information."

The study's authors suggested linking quality reports to websites about various medical procedures so consumers can compare infection rates at hospitals in their area. They also created a sample report card for maternity hospitals that ranks each facility by the quality of care for delivering babies, as well as for mothers' out-of-pocket costs based on their specific insurance coverage.

"There are things that we can do now that make a very big difference," Hibbard said.

The 2012 InformationWeek Healthcare IT Priorities Survey finds that grabbing federal incentive dollars and meeting pay-for-performance mandates are the top issues facing IT execs. Find out more in the new, all-digital Time To Deliver issue of InformationWeek Healthcare. (Free registration required.)

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User Rank: Apprentice
4/13/2012 | 11:32:24 AM
re: Why Healthcare Cost Reports Fail Consumers
The problem is that consumers have often no real choice in selecting providers. A doctor needs to be in network to be reasonably affordable to consumers. That means that the pay the doctor gets is dependent on contract with the insurance company. There isn't much the consumer can do about.
In emergency situations consumers pick the first hospital they can find and that hospital will put the doctor, lab tech, etc. that are working right now on that case. Should consumers debate with the hospital admins which specialist to employ while suffering heart failure?

The big flaw in the current and upcoming system is that the consumer has no choice in which insurance plan to buy. It is up to the employers to decide how much they feel they want to spend and how well that coverage needs to be in order to attract and retain talent, just like any other perk and benefit.
Consumers should be mandated to buy an insurance plan, but then have the right to pick whichever plan they want. Insurance companies will no longer sell to employers, but directly to consumers and that nationwide if they choose to do so. That way consumers have more choice, there is more competition, insurance companies are forced to sign more doctors, labs, and hospitals, and risk is much easier to spread for everyone. At the same time the local, state, and federal governments are allowed to operate as insurance providers, mainly with the intent to provide insurance for those who cannot afford it on the open market as well as for their own employees. Additionally, we need a cap on what a premium can be. Everyone has to operate at or below that level. Other countries do exactly that and they offer quality health care while significantly reigning in the cost of care.
User Rank: Apprentice
4/12/2012 | 5:58:43 PM
re: Why Healthcare Cost Reports Fail Consumers
How do I define "quality healthcare"? I don't. Healthcare is a misnomer. The correct term is "disease management".
User Rank: Apprentice
4/12/2012 | 5:46:07 PM
re: Why Healthcare Cost Reports Fail Consumers
The real issue is the vast majority of folks have employeer health care, which doesn't give them the choice in providers or facilities or procedures. They have what they have, so the report is meaningless, since the majority have no choices in their healthcare. Most feel lucky to have any healthcare coverage at all. Reports like this just keep up the pretense that people have choices in their providers and services.

People who need this information are the ones without health insurance, they are looking for the cheapest option, but does the report cover the amout they would pay? Since they get quoted higher cost than insurance companies get billed.
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