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Employers pressing providers for price transparency

By Rich Daly
Posted: March 7, 2013 - 11:00 am ET

Large companies are ratcheting up efforts to make providers more accountable and transparent on quality and price as businesses struggle to control healthcare costs, according to an employer survey.

A quarter of large employers now use financial incentives to obtain provider accountability for their care, according to a Towers Watson and National Business Group on Health survey of 583 companies with at least 1,000 employees. By next year, 33% expect to use such incentives.

“We expect this trend to grow now that Medicare, Medicaid and many insurance companies have started using value-based purchasing,” wrote the authors of a report on the survey results.

Some of the incentives intended to encourage high-quality care come in the form of bonuses and penalties applied directly to payments to providers. Others differentiate costs for employees to encourage the use of high-quality providers. For example, 12% of the companies vary their employees' cost sharing based on whether they use designated providers and 31% of the large employers planned to use such incentives by 2014.

The employers also said they will give workers more information about the costs of healthcare services and products. For instance, 33% of employers provided price or hospital quality transparency tools —or both—through their health plans. And 56% of the large companies expected to provide such tools by 2014.

Those efforts come as companies increasingly shift healthcare costs to their workers, giving those employees more incentive to make choices based on information that's frequently hard to obtain. Specifically, 66% of companies offered some type of high-deductible plan paired with an account, while another 13% expected to add such plans by 2014.

“It's essential that employees in these programs be armed with the best available information to make smarter healthcare decisions so they can reduce their costs without sacrificing quality,” authors wrote.

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