Consulting on costs, quality

Researchers and policymakers say one reason healthcare prices continue to outstrip inflation and quality of care lags is that most patients have no way to compare the price and quality of different healthcare providers, products and services.

So private insurers, employers, federal and state healthcare programs and other groups have released a growing number and variety of cost and quality comparison tools. They're betting that consumers finally are primed to use such tools because they are bearing a growing share of the cost of their own care under insurance plans with higher deductibles and other cost-sharing. And they're trying to enlist physicians in the effort to persuade patients to consider cost and quality data in making care decisions.

Consumers seem increasingly hungry for that information. A September 2012 Harris Interactive poll found 62% of people thought an online healthcare cost calculator was “important” or “very important,” even though only 6% said they have access to such a service.

But many experts have criticized previous public disclosure efforts as unwieldy and little used. Use of industry tools, such as price comparison calculators offered by commercial insurers to their members, range from 7% to 15% of consumers who have access to them, insurance experts say.

To increase consumer use of such tools, healthcare payers increasingly are turning, somewhat counterintuitively, to physicians and other providers, who long have resisted public release of comparative data on prices and quality of care. Ideally, insurance officials say, physicians will integrate cost and quality comparison tools in their conversations with patients to help them find low-cost, high-quality clinicians, test facilities and other providers.

“Putting this information in both of their hands can only help,” says Victoria Bogatyrenko, a vice president of innovation at UnitedHealthcare, the nation's largest private health insurance company.

To that end, UnitedHealthcare is looking to develop a provider version of the healthcare cost estimator for patients that the insurer relaunched last year. Similarly, WellPoint has given providers access to Anthem Care Comparison, its cost and quality comparison tool for members.

“It is unclear how much it is used to support referrals currently, but we definitely believe we need to foster greater use, especially for providers operating under our new reimbursement methods, where effectiveness of referrals will really count,” says George Lenko, program director for national networks at WellPoint.

WellPoint-owned American Imaging Management assesses advanced imaging facilities in its service areas for quality and price and shares that information with ordering physicians during the insurer's process of precertifying coverage of the service. If a physician then refers the patient to a facility but there are lower-priced facilities in the area of equal or better quality, a representative informs the patient by phone of the alternative providers and offers to set up the appointment there. Average savings for patients who go to the alternative providers is $1,000 per exam.

Aetna has done something similar on colonoscopies and endoscopies. Aetna began requiring precertification for these procedures, providing comparative price information online to plan members before they schedule their appointment, and started nudging physicians to perform them at less costly free-standing facilities.

Insurers and other entities offering such comparative data hope that the involvement of trusted physicians in discussing the cost and quality data can reduce patients' suspicions that this type of information is solely intended to cut costs for insurers. Insurers are banking on consumer trust in physicians, illustrated by a July patient survey from the Altarum Institute showing that 76% of consumers say physicians have their patients' best interests in mind.

“When it's the same information presented from a number of sources, it's more trusted,” says Leah Binder, CEO of the Leapfrog Group, whose organization gives hospital quality rating information to large healthcare purchasers for them to offer to their patients.

While physicians and other providers generally support the concept of discussing quality of care with their patients, research suggests they are reluctant to discuss costs. A survey of physicians published in the Journal of the American Medical Association in July found only 36% of physicians believe they have a “major responsibility” for reducing healthcare costs; they assigned greater responsibility to plaintiff lawyers, insurers, hospitals, drug and device manufacturers, and patients (52%).

There are good reasons for physician wariness about cost discussions with patients, says Harold Luft, director of the Palo Alto Medical Foundation Research Institute. Luft says consumers need a broadly accepted quality measure that clearly demonstrates that higher costs don't necessarily mean better quality. Lacking such a measure, most consumers assume that more expensive providers, products and services are better and that doctors who refer them to less-expensive care are doing so for their own financial benefit.

“We need better objective data,” Luft says.

Physician use of quality data also may be limited by the complexity of referral situations, says Wendy Lynch, co-director of the Center for Consumer Choice in Health Care at the Altarum Institute. For example, physicians looking at price and quality comparisons for a patient's referral surgery need to take into account the separate cost and quality ratings for the surgeon and the hospital.

“It's really hard to pull these things apart,” Lynch says.

Patients also may be resistant to cost discussions. Dr. Susan Dorr Goold, a researcher and internist in the University of Michigan Health System, Ann Arbor, co-authored a February study in Health Affairs that used focus groups to gauge patients' reactions to physicians raising the issue of cost when discussing their care options. Reactions ranged from skepticism to hostility.

“Patients didn't have a great interest in cost,” Goold says. “I was surprised how vehement they were.”

Additionally, patients might not be open to cost and quality discussions when they are suffering from painful or debilitating conditions, Luft says. In such cases, physicians may be better off synthesizing the cost and quality data themselves and recommending a course of action to their patients.

“If I'm the patient, I want the physician to roll all of that information together (so I don't) have to make that decision in that situation,” Luft says.

But patient interest in prices appears to rise sharply when they are responsible for a larger share of the cost. For instance, UnitedHealthcare members enrolled in high-deductible plans are “much more inclined” than those not in such plans to use the insurer's cost estimator, Bogatyrenko says.

The financial pressure of high-deductible plans might increase the importance of clinicians in helping patients make decisions based on cost and quality, Goold says. “The problem with the concept of patients having 'skin in the game' is that patients are not good at deciding where to put their money.”

Physician groups are nudging their members to move in the direction of using cost and quality tools in their interactions with patients. The American College of Physicians released an updated ethics manual in 2012 calling for doctors “to practice effective and efficient healthcare and to use healthcare resources responsibly.”

Insurers say they are getting little resistance from physicians to the use of their cost and quality tools. “They'd like to have that information, in a way that's appropriate, so that they can have constructive conversations with their patients,” UnitedHealthcare's Bogatyrenko says. “Physicians and hospitals overall understand that this is an important change within the industry, so we didn't get significant pushback at all.”

Companies that make the price and quality comparison tools for providers report some limited evidence that provider use is increasing, even though the quality of the data and its presentation improve. MD Clarity, for example, offers a calculator to providers that can estimate healthcare costs for their patients based on their specific insurance.

“Patients are bombarding these clinic and hospitals and health systems with requests for pricing information, asking, 'What's the hit for me out of pocket?' ” says Michael Albainy, CEO at MD Clarity.

But at the 10 healthcare organizations that use MD Clarity's tool, most users are clerical staff who provide estimated cost of services to patients when appointments are made—not the clinicians themselves.

“It's going to take awhile for it to become more commonplace for physicians and patients to have that discussion,” Albainy says. At this point, “It's more, 'I need to get X; what's the price for X?' ”

Joyce Dubow, senior health reform director at AARP, says it could take years for broadly accepted comparative measures of cost and quality to develop that gain the trust of consumers. “Up to now, the tools and measures on cost and quality haven't resonated with consumers,” she says. “We have to work to make people aware of what's available.”

Goold says convincing patients to choose providers, products and services based on cost and quality data will remain a challenge, even in the relatively straightforward situation of substituting generic medications for brand-name drugs. Some patients still insist that higher cost indicates higher quality and they want the best drug.

“So I tell them using the brand-name drug just gives more profits to the drugmaker and leaves less benefits for the other people with their insurance,” she says. “That usually works.”

—with Harris Meyer

Rich Daly is a former Modern Healthcare reporter.