The Opaque Results of Federal Price Transparency Rules and State-Based Alternatives

Aug 15, 2019

Dr. Pennell and Dr. Kircher discuss the push for increased price transparency among stakeholders in an effort to control the rising costs of healthcare. Read the related article on ascopubs.org.

 

TRANSCRIPT:

Welcome to the latest Journal of Oncology Practice podcast, brought to you by the ASCO Podcast Network, a collection of nine programs covering a range of educational and scientific content and offering enriching insight into the world of cancer care. You can find all recordings, including this one, at podcast.asco.org.

My name is Dr. Nate Pennell, medical oncologist at the Cleveland Clinic and consultant editor for the JOP. Americans are very familiar with comparison shopping for goods and services based on the price. I can buy anything from a car or a television to life insurance to hiring a contractor to remodel my home.

And I could expect that the price of that good or service is going to be easily available. It's going to be accurate. And then I can compare it to their competitors prices. So I can then make my decision based on that price and the quality of the goods or services.

But what if you wanted to shop around for your health care? How easily can we determine the true out-of-pocket costs for, say, a hip replacement or a screening colonoscopy? In truth, I bet aside from a purely cosmetic procedure, most people don't ever recall being told what the price is of a medical procedure before having it done.
So why is medicine different? And how does this impact the cost of health care? And what can we do to improve price transparency? With me today to discuss this issue is Dr. Sheetal Kircher, associate professor and GI medical oncologist at the Robert H. Lurie Comprehensive Cancer Center of Northwestern University. Dr. Kircher is a member of the ASCO Health Equity Committee and was a recent ASCO Health Policy Fellow from 2018 to 2019.

We'll be discussing her paper, "The opaque results of federal price transparency rules and state-based alternatives", to be published in the August, 2019 JOP. Welcome Dr. Kircher, and thanks for joining me today.

Thanks for having me.

So first of all, can you briefly kind of review why aren't health care costs like other goods and services? And why isn't it easy to understand and compare between them?

There's a lot of reasons that health care costs are really just fundamentally different than really almost any other goods or services that I can think of. Taking your example of shopping for a TV, when you know which TV you want, you to go to multiple stores. You check to see if there's free online shipping. And you choose the lowest price.

Even if you don't know what TV you want, you can see what the cost is going to be. And this cost is going to be inclusive of tax, shipping. And you can even see what that cost will be if you had a coupon or promo code.

In addition to the cost of these TVs, we will see ratings, hundreds, thousands of people with commentaries on their experience with that exact product. So many times, you could even return it. So as we can see, health care is just really different. The stakes are higher.

So even when we use this word, cost, shopping around for health care, and things like that, already that kind of seems like a misnomer. For the individual case and the actual cost of a service, it's complicated. It's difficult to figure out because almost nobody pays what we think of as like the list price.

The literal list price for hospitals is called a charge master. A charge master is really just the list prices out the gate that a hospital comes up with and becomes a starting point for negotiation for payers. And then each plan will have a different contracted rate for that service.

And this is problematic, isn't it? Because the charge master is sort of the-- when people start, at least say with the federal regulations, that's the price that they're sort of trying to get people to put out there. But that's not necessarily all that helpful.

Exactly. And you know, in addition, because there's such variation in what the patient will actually pay at the end of the day after their insurance coverage kicks in, when you look at the hospital list of prices, it's difficult, even for myself with a medical degree, to understand what I'm looking at. For example, if I'm thinking of a single service, like a colonoscopy, there could be many components to a colonoscopy, such as the doctor fee, facility fee, pathologist, anesthesiologist. So even if you saw the word colonoscopy on one of these lists, it's impossible to really know if that's inclusive of all the components of that procedure.

So say a patient was able to actually get a hold of these contracted rates instead of the lowest prices. And then they were able to know all the components of that service. They would still need to understand the specific cost sharing details of their insurance plan, such as like how much the deductible is, what's their copay, what's their coinsurance. In my experience, and I think it's well-published in the literature, that most patients even struggle to just know what the definition of those things are, like your deductible, let alone what their actual amounts are.

You know, it does sound complicated. And obviously, I think a lot of doctors are familiar with the multiple different charges and whatnot. But at the same time, given the complexity of modern technology and whatnot it doesn't sound to me undoable for a particular hospital to bundle all of the costs of a single procedure together and to somehow link to what your insurance company should cover for that kind of thing. It does not seem to me like this is an undoable technological fix if someone wanted to do it.

I agree. There's been a lot of attempts, both at the state level and federal, to really address this issue. I mean, even taking a step back even further, institutions have tried to, at least for their patients, provide more accurate down at the patient level estimates of their costs. And as simple as it sounds, it is actually quite difficult. And the reasons are because a lot of people contracting from payers as well as insurance it still is very opaque, even in people that are highly skilled and trying to figure this out.
So if you are an actual patient, I mean, I think that the challenges just become even greater. But some states have taken some more kind of in the weeds active approach to improve price transparency in health care as a whole, including oncology. [INAUDIBLE] states have implemented or at least passed laws where they create something called an all-payer claims data set or APCDs.
What these are it's still a list of prices. I think it tackles some of these issues that we just talked about, because what these lists are, they account for the negotiated price, as opposed to the pre-negotiation charge master. So basically, it's the price after the coupon. You know, it's like the real price.

Most of these data sets, or at least many of them, have incorporated quality metrics. Now, I would have to say that the quality metrics between states is all over the map. Nobody has agreed on these quality metrics. But it's at least one more tool to help the patient in addition to cost to make decisions.
I think a kind of interesting point this all brought up as we were doing this work is almost like a bigger question of do patients want to comparison shop for their health care. So I mean, if my primary care doctor, who I trust and I know, and I've known for 15 years, recommends a procedure, so say a colonoscopy, I'm likely to choose the doctor and the facility that she recommends.

I don't even remember if you go to get a procedure, they usually don't even tell you ahead of time what the cost is and ask you if that's something you're interested in paying. Usually you just schedule it, and you do it. And you get a bill after the fact.
That would have to be a pretty big shift in the culture of how we approach paying for health care if we were going to start comparison shopping. You'd have to understand that you needed to do that to begin with. You'd have to know how to do it and how to compare these things. It's certainly not undoable. It's something, again, that we do for almost every single other thing that we buy, but it would require quite a major change.

Absolutely. And there's an even larger price transparency kind of movement going on. In relation to we were just saying about a patient-- say an oncology patient is starting chemotherapy. Federally, there's multiple different efforts that are trying to improve price transparency. So the oncology care model, one of the 13 kind of pillars of that care plan, one of them is delivering out-of-pocket costs before treatment starts.

Now, in oncology specifically, this is problematic and very challenging. You know, kind of trust me, we've tried. And we continue to try because when you think of the drugs we give oral chemotherapy, targeted agents, and then IV chemotherapy, we're not only dealing with totally different modes of treatment. We're talking about different payment structures of how cost sharing works.

So typically, IV chemotherapy is on our hospital outpatient benefits, while oral chemotherapy is covered by our prescription drugs. Now, both of those, in say Medicare for example, are completely different cost sharing structures. So the experience for a patient picking up their oral chemotherapy is at essentially a retail pharmacy or if it's perhaps a specialty pharmacy. But there's a cash register. And you're paying for it there.

The experience of paying for your IV chemotherapy is just like you described with the procedure, where you get it done. You get the bill at home. And just the experience alone is really different.
So federally, for this specific charge master display, so as of January 1st, all hospitals must publicly display their charge master. You know, like I said, these were never intended for consumer viewing. So they were first mandated to exist in the actually the Affordable Care Act. And the Trump Administration has really built upon this and said, why make patients ask for the charge master. How about we just require the hospitals to publicly display these? So that's where this kind of mandate came through.

It's interesting because as we went through this exercise in the publication, and the codes they use, the abbreviations, even with a medical degree, I had a hard time deciphering what they said.
Yeah, it does seem as though a lot of hospitals did not take this as a mandate to try to make this a transparent and useful thing. They said, well, the requirement is we're going to put it up. And here's our Excel spreadsheet or our PDF with all of the jargonese there. And you can do with it what you will.

Absolutely. And I wasn't surprised when we saw that even within four months of this being mandated, 88% of the hospitals we looked at in Chicago had it published. They were right on it. They had published it. And it was on their website. Because the ACA had already required that they have it. So really, they just took it out of the file folder and put it on the website without much thought that they were trying to make it helpful for patients.

A lot of disclaimer that a lot of, I think, hospitals overall did a really good job of putting kind of the fine print on there and saying that please speak to your doctor and facility to actually get the real cost. So I think the hospitals overall did a pretty good job of that.
As you and your authors point out, if someone actually did try to use that information to comparison shop, or what I would think perhaps would be more common, they would look it up just to see what the price is going to be forwardly placed they've been told they're supposed to go. They might see a $3,000 charge for their CT, which might have been completely covered by their insurance with no out-of-pocket expense to them at all and decide not to get it because they're afraid they're going to be charged $3,000.
Right. So in the hopes of having this transparent playing field, my major concern is even I, if I saw that amount of money, maybe that would make me pause a little bit actually. And I think the last thing we need to do, especially in these screening tests that there is no shortage of data saying that they improve survival. I want my patients to get them. There's enough barriers, I think, to getting someone a colonoscopy, that I would hate for that to be an unintended consequence of showing people the cost, especially in this inaccurate kind of forum.

So what can we do about this? What do you and your co-authors recommend to try to address cost transparency moving forward?
I think it's exciting that there is momentum here. I mean, I think price transparency, although has become a buzz word, it is going to continue to be an active issue at the state and federal levels. What makes this exciting to me is that it is bipartisan. So we all care about health care, to a different degree, and we all have different strategies.

But I do feel that this is a bigger discussion about transparency, not only here at the patient level, provider level, hospital level even. I really think I hope we're moving to a place where there is a bigger discussion of transparency at all levels. I'm talking even starting up at the manufacturer level.

But from a very practical patient level standpoint, we all encourage people to develop APCDs. There's interesting results that have been shown in some states that there is a good way to show people cost. And by doing so, programs, such as California's program, has actually shown that utilization of lower priced facilities has increased. And most importantly is that when patients are shown a cost and have some sort of way to impact or influence the amount of cost sharing that they will have based on their decision making, there is an opportunity perhaps for patients to choose lower cost facilities.

Now, even as I'm saying this out loud, my first concern and worry is making sure that outcomes are the same. And so I, first and foremost, care about complication rates for surgery and things of that nature. But there are state level programs that have shown that we can have both. It can be a dominant solution.
So I encourage states to especially have the flexibility to accommodate variations in state level health care markets, the states is really where these databases belong. And they should take it the next step further to make them interpretable, inclusive of all cost. And I encourage states and federally to work together to say if we're getting a colonoscopy, that includes services A, B, C, and D. So when patients are comparing, they're actually comparing apples to apples.

Evidence-based standardized quality metrics incorporated into these cost models will help us at least keep thinking about getting to this ultimate goal of value. And it's like hard not to plug when we're talking about cost and everything is this concept of value. And making sure that no matter what structure we choose to show people cost to have it impact their out-of-pocket cost sharing, those services as we have deemed in the evidence to be high value, the screening lung CT, the colonoscopy, really should be at a minimal cost sharing for patients, no matter what sort of structure that we have.

No, that makes perfect sense. One of the things that jumped out here, if you actually have data that using an APCD increase the number of patients moving to lower priced facilities from here, you mentioned from 68% up to 90%, the first thing that would occur to me is that that might actually end up driving down prices from competition, which is something that has never been a successful strategy in medical care for some reason.

Absolutely. The specific program I'm talking about from California is called CalPERS. And it's the government 1.3 million state employee programs. And really, the premise of that program is so interesting because it's the assumption that we can never really decrease the cost of care unless individual consumers are aware of the prices and have some sort of input into their cost sharing and decision making.
Oh, yeah. This is everybody is looking for ways to reduce costs. And when you see success like this, you'd think people would jump all over this. You'd think even hospitals and health systems would want to market that they have lower costs procedures to get more business. It's just very interesting that this is flying so under the radar.

Absolutely. And I do think, though, that there are more and more states actually jumping on board. So I'm hopeful in the next five, 10 years that as the real discussion of the value and value based care continue, this will really, I hope, will become more common.
And Dr. Kircher, thanks so much for joining me on the podcast.
Thank you for allowing me to discuss the paper.

Until next time, thank you for listening to this Journal of Oncology Practice podcast. If you enjoyed what you heard today, don't forget to give us a rating or a review on Apple Podcasts or wherever you listen. While you're there, be sure to subscribe so you never miss an episode.

JOP's podcasts are just one of ASCO's many podcast programs. You can find all recordings at podcast.asco.org. And you can also find the full text of Dr. Kircher's paper online at ascopubs.org/journal/jop in August, 2019. This is Dr. Nathan Pennell for the Journal of Oncology Practice signing off.