Chartis Top Reads – Week of December 5 - December 11, 2021

Our research team breaks down this week’s top healthcare news.


Top Reads Overview

In an age of unprecedented change, staying current has never been more important. Our team at Chartis is curating news most relevant to the healthcare industry and tracking the topics that are trending on seven key issues: high reliability care, digital and advanced technology, financial sustainability, health disparities, the health ecosystem of the future, partnerships, and the provider enterprise. Each week, we break down what’s happening and why it matters.

Health Ecosystem of the Future

The Buzz This Week

Last week, The Commonwealth Fund released a report on consumer choice in healthcare. Through a literature review, they found that consumer choice has the potential to help improve value in healthcare, driving providers to “compete” for patients by raising quality, keeping costs low, and delivering a good experience.

However, consumer choice has not moved the needle on value much to date. Most consumers have the ability to choose healthcare providers, and consumers place a high value on protecting choice. According to The Commonwealth Fund’s findings, following the strong backlash against the restricted choice in managed care in the 1990s, “Today, having access to a preferred network of physicians and hospitals continues to be the most important feature of health plans for many consumers.”

However, making informed healthcare choices is not easy. As the Commonwealth Fund states, in concept, “when people have access to full and accurate information about the quality and cost of health insurance plans, physicians, hospitals, and services — and appropriate tools for using that information — they will be able to choose the best options for themselves and their families.”

However, “full and accurate” information is not easily found. The 2020 Transparency in Coverage rule was a major step toward price transparency, but as we’ve covered in a past edition of Top Reads, initial data since the rule went into effect on January 1 shows that fewer than one-third of hospitals qualify as “highly transparent” with pricing. Furthermore, consumers aren’t in the habit of checking prices before seeking care, and few are incented to do so.

A 2021 consumer survey conducted by the Employee Benefit Research Institute found that only 30 percent of those in a traditional health plan checked prices for doctor’s visits, medications or other services before receiving care (36 percent for those in a high-deductible health plan, or HDHP), and only 27 percent talked to their doctors about alternative treatment options and costs (33 percent for HDHP enrollees).

Placing responsibility for more cost coverage on consumers or providing financial bonuses for choosing lower cost options can help incent them to seek pricing information, though pure cost shifting can result in unhealthy decisions. For example, a study in Health Affairs found that when faced with higher deductibles or other cost burdens, consumers have trouble discerning what care is necessary, and often forego important preventive services, such as cancer screening.

Obtaining data and information on quality is also challenging. The Agency for Healthcare Research and Quality defines quality as “doing the right thing at the right time for the right person and having the best possible result.” But that is difficult to measure. There are few universally accepted metrics or reports to assess quality, despite various systems like the Centers for Medicare and Medicaid Services’ star ratings, LeapFrog Group’s hospital and ambulatory surgical center ratings, and HealthGrades’ doctor reviews and ratings platform.

Consumers don’t often consult such resources — the aforementioned consumer survey found that only 32 percent checked the quality rating of a doctor or hospital before receiving care (38 percent for HDHP enrollees). Consumers often place a heavy weight on experience (theirs, or a friend or family member’s) in assessing care quality. While experience is an important feature, it is not necessarily representative of medical outcomes.

    Why It Matters

    Without consistent, accurate, and straightforward systems for consumers to access and understand pricing and quality information, it will be difficult for them to make informed healthcare choices. If their decisions are not based on price and quality, providers will be less motivated to make efforts to improve either, and value will not be advanced.

    Even with perfect information, certain factors can influence whether consumers make rational decisions. Citing a behavioral economics article, The Commonwealth Fund report states that decision-making “errors” are most likely to occur “when choices are complex, involve high stakes, include trade-offs over time, and when consumers have limited personal experience. Health care choices often involve all four of these circumstances.”

    To help enable informed decision-making and drive healthcare value, further policy and regulations around price and quality transparency will help. But they are not enough. Payors and providers need to play roles too. Payors can design creative incentives that can help motivate consumers to seek information and choose higher-value providers, if designed properly (e.g., cost-shifting, rewarding selection of preferred providers, and rewarding for recommended preventive services).

    Providers can spend more time educating patients on prices, quality, and alternative treatment or medication options. Studies indicate that patients are eager to discuss cost and quality with their physicians, but providers are often ill-prepared to have such conversations (e.g., they don’t know the costs themselves or are too busy to take the time). Medical groups and health systems should put programs and protocols in place that arm physicians with knowledge of costs and quality and allow time to discuss with patients — even creating protected time in each appointment if necessary. Finally, health systems can create user-friendly portals and/or mobile applications with pricing lists and quality metrics, supplemented by dedicated personnel (or chatbots) available for 24/7 consultation.


      Contributors

      Roger A Ray, MD
      Chief Physician Executive
      [email protected]

      Alexandra Schumm
      Principal, Vice President of Research
      [email protected]

      Abigail Arnold
      Senior Research Manager
      [email protected]


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