Reinhardt: IT Can Improve Healthcare Costs through Transparency | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Expert: IT Can Improve Healthcare Costs with Pricing Transparency

December 3, 2013
by Gabriel Perna
| Reprints
Uwe Reinhardt, Ph.D. Credit: Princeton University

 

A renowned commenter and researcher says information technology could remove what he says is the "shroud of secrecy" associated with private healthcare costs. 
 
In a recent review published in the Journal of the American Medical Association (JAMA), Princeton University professor, Uwe Reinhardt, Ph.D., who has authored several papers and has conducted research on healthcare economics, advocates for the use of electronic information technology to improve the transparency of private healthcare costs. He cites the Healthcare Blue Book, a website which allows consumers to search for fair healthcare prices by typing in their zip code.  
 
"The idea that American patients should 'shop around for cost-effective health care' so far has been about as sensible as blindfolding shoppers entering a department store in the hope that inside they can and will shop smartly for the merchandise they seek," Reinhardt, James Madison professor of Political Economy and professor of economics and public affairs at Princeton's Woodrow Wilson School, said in a statement. "In practice, this idea has been as silly as it has been cruel."
 
Along with Healthcare Blue Book, Reinhardt mentioned a startup in the West Coast that  
developed software which provides employees covered under group insurance both the prices and quality of care by individual clinicians and healthcare organizations. The startup, he says, is trying to introduce reference pricing, a concept introduced in Europe in the 1990s, to digital technology. 
 
Reference pricing is the cost a consumer anticipates paying for a service, Reinhardt says. He says it could contain healthcare costs in the U.S. 
 
"The power of reference pricing could be enhanced if all hospitals were mandated to use Medicare's diagnosis-related group system for all patients, with every hospital using the same scale," said Reinhardt. "Broad price competition in U.S. health care could then occur on the basis of only one single number: the monetary conversation factor, which could be easily made public."
 
Recently the idea of cost transparency, through IT, taken on a bit of steam. The Centers for Medicare & Medicaid Services (CMS) released outpatient data this past year and advocates have pushed for more transparency at this level for consumers.
 
It goes beyond consumer pricing. A recent study from the Boston-based Massachusetts General Hospital determined that providing physicians with the real-time cost of lab tests in an electronic health record (EHR) system may help them reconsider ordering costly tests
 
Topics

News

Appalachia Project to Study Relationship Between Increased Broadband Access, Improved Cancer Care

The Federal Communications Commission and the National Cancer Institute have joined forces to focus on how increasing broadband access and adoption in rural areas can improve the lives of rural cancer patients.

Survey: By 2019, 60% of Medicare Revenues will be Tied to Risk

Medical groups and health systems that are members of AMGA (the American Medical Group Association) expect that nearly 60 percent of their revenues from Medicare will be from risk-based products by 2019, according to the results from a recent survey.

83% of Physicians Have Experienced a Cyber Attack, Survey Finds

Eighty-three percent of physicians in a recent survey said that they have experienced some sort of cyber attack, such as phishing and viruses.

Community Data Sharing: Eight Recommendations From San Diego

A learning guide focuses on San Diego’s experience in building a community health information exchange and the realities of embarking on a broad community collaboration to achieve better data sharing.

HealthlinkNY’s Galanis to Step Down as CEO

Christina Galanis, who has served as president and CEO of HealthlinkNY for the past 13 years, will leave her position at the end of the year.

Email-Related Cyber Attacks a Top Concern for Providers

U.S. healthcare providers overwhelmingly rank email as the top source of a potential data breach, according to new research from email and data security company Mimecast and conducted by HIMSS Analytics.