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Support Grows, but True Quality and Price Transparency Remain Elusive

By William Prentice

With its recent release of a new online price comparison tool for Medicare patients looking for information about outpatient surgery and a new requirement that hospitals make their prices publicly available, the Centers for Medicare & Medicaid Services (CMS) is sending a clear message that those who steer the U.S. Medicare program are concerned about the high cost of health care and want patients to have improved access to information about the cost of their care. Like many things in health care, however, while both the new tool and the new requirement are steps in the right direction, both have a lot further to go before they can truly achieve their end goal.

Everyone from individual patients trying to determine the cost of the procedure they need to veteran New York Times health reporter Robert Pear has recognized the difficulties hospitals face in posting prices that are meaningful and useful to patients.

“The data, posted online in spreadsheets for thousands of procedures,” says Pear about the hospital reports, “is incomprehensible and unusable by patients – a hodgepodge of numbers and technical medical terms, displayed in formats that vary from hospital to hospital. It is nearly impossible for consumers to compare prices for the same service at different hospitals because no two hospitals seem to describe services in the same way. Nor can consumers divine how much they will have to pay out of pocket.”

At the same time, Pear reports that the execution of the plan leaves much to be desired, he acknowledges that the new requirement, by most accounts, has been established in pursuit of a worthy goal. According to CMS Administrator Seema Verma, that goal is to empower patients.

Medicare’s new Procedure Price Lookup Tool suffers from some of the same shortcomings as the online databases the hospitals are posting. For example, using the medical coding system and terminology built into the tool, patients often find it difficult to identify the service or procedure they need. When they do, they can easily underestimate the cost involved by overlooking other services or procedures that need to be performed at the same time.

Medicare patients who use the price lookup tool need to remember that the prices they are being given, both for the total cost of procedures and the patient copays, are averages that do not account for regional price variations. Patients covered by a supplementary Medicare plan or other insurance could also find dramatically different prices for their procedures.

Right now, because of an anomaly in the ASC and hospital outpatient department (HOPD) reimbursement system that the Washington, D.C.-based think tank known as the Brookings Institution is calling a “poorly designed payment structure,” the patient copays for several high-cost procedures the tool covers have been capped when those procedures are performed in hospitals but not when they are performed in ASCs. As a result, to take advantage of modest savings in their copays, patients could elect to have the procedures they need at the higher cost provider where the costs to Medicare could be tens of thousands of dollars more. ASCA is looking at ways to address this situation.

One problem both transparency tools share is a lack of quality data. Without information they can use to evaluate and compare the quality of care they can expect to receive in different sites of service, patients might easily select the higher-priced provider in the mistaken belief that higher cost care is also higher quality care – a common misperception that has been disproven time after time in peer-reviewed studies of many kinds.

Of course, in emergency situations, it is difficult if not impossible for patients to compare costs and providers, but patients considering outpatient surgery for elective procedures often have time to evaluate their options. To help, many ASCs across the country are working with their patients and their insurance providers before a scheduled surgery to determine the cost of care. Some ASCs are also posting prices online, and many are participating in state and national reporting programs created to collect and share price and quality data with consumers.

Long story short, the more transparent providers and insurers become with price and quality metrics, the more providers and consumers learn about the need for this information and the challenges involved in delivering it. Meaningful data must be easy to access, easy to use and comparable across sites of service. While we continue to move closer to that goal, we have only begun to explore this new territory and the work that lies ahead.

As U.S. Secretary of Health and Human Services Alex M. Azar II said last year, “There is no more powerful force than an informed consumer.” ASCs are looking forward to working with our colleagues in health care to harness that power and put it to work improving patient health and patient access to affordable, high-quality outpatient surgical care across the U.S.

– William Prentice is the chief executive officer of the Ambulatory Surgery Center Association.



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