Price transparency progressing despite poor state grades

I suspect that all parents of school-aged children have experienced a moment of anxiety when a report card shows up in the mail: How are they doing? Are they failing anything?

For advocates of healthcare price transparency, the annual report card by the Catalyst for Payment Reform (CPR) may have caused a similar feeling. The report card gave failing grades to 45 states for their transparency efforts. It had flunked only 29 states the year prior. Massachusetts, where lawmakers had been big advocates for price transparency, saw its grade drop from a "B" to an "F." Only New Hampshire received an "A" grade, and Colorado and Maine received the only "Bs."  

What the heck was happening here? Given all the cost-shifting over to consumers and the continual increases in prices for services, shouldn't the grades be going the other way?

Not necessarily.

That's the opinion of Joel White, president of the Clear Choices Coalition, which has been advocating for greater price transparency. Clear Choices was formed less than six months ago, but has some pretty powerful backers, including health plan giant Aetna (which will become much bigger after absorbing Humana), AARP and pharmaceutical manufacturer Novo Nordisk.

White told me in an exlusive interview that he believes that the CPR is biased toward all-claims databases, a relatively new form of transparency that is only now being embraced by states. Minnesota is in the midst of constructing an all-claims database, but still received an "F" because it is not completely on line. Massachusetts received an "F" even though it enacted new transparency laws that shifted much of the burden of the work onto insurers.

Five years from now, White believes the level of price transparency in healthcare delivery in the U.S. will be virtually unrecognizable compared to today.

"I think culturally and as a society we're demanding more for our money from healthcare," White said in the interview. He added that the current millennial generation is scratching their heads about going to the doctor's office and not being able to obtain a price for services and shop around--something they can do for virtually every other service and product sold in the world. "It's like getting a trade secret from Cuba."

But along with all the other pressures, White concluded that price transparency "can't go anywhere but forward." He noted that the release of mountains of information from the Centers for Medicare & Medicaid Services on Medicare pricing information--along with the widespread availability of apps on which to plug it in--will help drive transparency forward.

If there is one significant obstacle to price transparency, White believes it comes from the hospitals. He noted that many acute care providers require gag clauses in its payer contracts, and they lobby heavily to block transparency efforts on the state level. Interestingly, Clear Choices has members from virtually every side of the healthcare debate--except for hospitals.

But White expects that to change. He said Clear Choices is in negotiations to bring some hospitals on board, suggesting that resistance is slowly beginning to crumble. However, he also believes they are concerned with a bigger threat: Consolidation among major payers.

"Pricing is the least of their concerns," White said, but later added that "the challenge is their attention has been diverted." - Ron (@FierceHealth)

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