Health Pricing Transparency Could Save Industry $100B, Report Says | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Health Pricing Transparency Could Save Industry $100B, Report Says

May 19, 2014
by Rajiv Leventhal
| Reprints

The U.S. healthcare industry could save an estimated $100 billion over the next decade by providing patients, physicians, employers and policymakers more information on healthcare prices, according to new analysis from the Washington, D.C.-based Gary and Mary West Health Policy Center.

Conducted by researchers at the former Center for Studying Health System Change (HSC), the analysis, “Healthcare Price Transparency: Policy Approaches and Estimated Impacts on Spending,” quantifies the potential savings from three policy initiatives:

Use state all-payer health claims databases (APCDs) to report hospital prices This initiative could save up to $55 billion in several ways: by using claims data to make employers more aware of price differences and realize savings from narrower provider networks and tiered benefits; by increasing pressure on high-price hospitals to reduce or justify their prices; and by informing the discussion of policy options for controlling costs.

Require electronic health record (EHR) systems to provide prices to physicians when ordering diagnostic tests Physicians play a key role in recommending which tests and treatments are necessary, but they are often unaware of the cost of the services they are ordering. Providing cost information to physicians would enable informed, shared decision making about the relative value of discrete tests or treatments when developing patient-specific treatment plans. This is estimated to produce up to $25 billion in savings over 10 years.

Require all private health plans to provide personalized out-of-pocket expense information to enrollees Estimated to reduce health spending by $15-20 billion over the next decade, this initiative would have a relatively modest impact because most private plans already offer a personalized price tool but few consumers actually use them. More effective patient-facing transparency tools and/or steeper incentives for their use could increase the impact of this initiative.

The report’s analysis further concluded that price transparency is not a silver bullet that alone can tame excessive health spending. Rather, price transparency is likely to be most effective in supporting other reforms, such as shifts to health plan benefit designs that steer patients to higher-value providers, and changes in payment policy that put medical providers at greater financial risk for the total costs of care.

“While healthcare transparency is typically viewed through the lens of patient-facing transparency tools to drive comparison shopping, our analysis suggests even greater impact could be achieved by expanding the audience for such information,” Joseph Smith, M.D., chairman of the West Health Policy Center Board of Directors, said in a statement. “We’ve found that providing price information to three key stakeholders—physicians, employers and policymakers—may have a far greater impact.”

Read the source article at Welcome to West Health

Get the latest information on Health IT and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More

Topics

News

KLAS Research: Small Hospitals’ Buying Decisions Impacting EMR Market Share

A new KLAS Research report tracks shifts in electronic medical record (EMR) vendor market share among acute care hospitals, and finds that smaller hospitals are seeking technology solutions that meet their needs and limited budgets, and these contracts are making a mark on the EMR market.

Survey: Majority of Providers Predict Success for New Generic Drug Company, Project Rx

Back in January, four health systems, in consultation with the VA, announced a collaboration to develop a new, not-for-profit generic drug company. A survey has found that 90 percent of providers say they would become customers of the new venture.

Personalized Medicine Awareness Low Among U.S. Adults, Survey Finds

Genetics and personalized medicine are not top of mind for the general public in the U.S., according to a recent survey from GenomeWeb and the Personalized Medicine Coalition.

Industry Organizations Praise Senate Passage of VA Mission Act

The U.S. Senate on Wednesday passed, by a vote of 92-5, a major Veterans Affairs (VA) reform bill that includes health IT-related provisions to improve health data exchange between VA healthcare providers and community care providers.

NIH Issues Funding Announcement for All of Us Genomic Research Program

The National Institutes of Health’s (NIH) “All of Us” Research Program has issued a funding announcement for genome centers to generate genotype and whole genome sequence data from participants’ biosamples.

MGMA: Physician Compensation Data Illustrates Nationwide PCP Shortage

Primary care physicians’ compensation rose by more than 10 percent over the past five years, representing an increase which is nearly double that of specialty physicians’ compensation over the same period, according to the Medical Group Management Association (MGMA).