Many view price and quality transparency as fundamental to moving the U.S. to a true consumer-driven healthcare market. New Hampshire started down that road a decade ago and the state, recently recognized as the nation's transparency leader, offers lessons to other states that aren't as far along.
Its experience suggests that publishing payment rates can have an impact on negotiations between insurers and providers. The initiative also has encouraged new health plan benefit designs that are sending consumers to lower-cost care settings, and prompted hospitals to offer patients lower-cost care settings.
While New Hampshire is a test case for price transparency, its experience is limited by a lack of hospital competition. Only two cities, Manchester and Nashua, have more than one hospital, a 2014 analysis of the initiative noted.
And by focusing on a relatively small number of medical services, the website doesn't tell the whole story about how hospitals compare on price. “It's just a piece of all the work and all the services (hospitals) provide,” said Paula Minnehan, vice president of finance and rural hospitals at the New Hampshire Hospital Association.
Earlier this month, New Hampshire was the only state to receive an A grade in the annual report card on state transparency efforts issued by the Catalyst for Payment Reform and the Health Care Incentives Improvement Institute. The state has an all-payer claims database, known locally as the Comprehensive Healthcare Information System, or CHIS, which was established by state law. It now is a national leader in providing information to consumers on what selected healthcare services will cost.
Based on claims data from CHIS, New Hampshire's state-run price website, known as NH HealthCost, can go beyond presenting chargemaster prices and give consumers an estimate of what their health plan might pay and what their out-of-pocket cost would be. Colorado, Maine and Vermont also have created their own claims data bases and are trying to do what New Hampshire has done on letting consumers look up actual prices.
North Carolina recently began publishing cost data submitted by hospitals on 100 common inpatient services, 20 surgical procedures and 20 imaging procedures, including the actual prices paid by Medicare, Medicaid and the state's top five insurers. In January, Blue Cross and Blue Shield of North Carolina suddenly released its all-inclusive payment rates for services at each of the state's hospitals, including for coronary bypass procedures, kidney transplants, knee replacements, screening colonoscopies and other services.
NH HealthCost went live in February 2007. The site uses a bundled approach that tries to reflect the true cost of a service, for example, the technical part of performing a mammogram and the radiologist's fee for reading it, said the site's architect, Tyler Brannen, a health policy analyst for the New Hampshire Insurance Department. It's continuing to add prices for more services.
Nearly 2,800 people visited NH Health Cost in the past quarter, and 74% were new users. “They're spending some time on the site and clicking through,” said Maureen Mustard, director of healthcare analytics for the state insurance department.
Although the site was built for consumers, health insurers and providers have been its most attentive audience.
An initial 2009 study found that the website's price information had no impact on hospital payment rates in the first few years. But last year, an updated study by Mathematica Policy Research found at least one case where a higher-cost provider had to lower its rates because of the data. In 2010, Anthem Blue Cross and Blue Shield, the state's dominant insurer, threatened to terminate its contract with Exeter (N.H.) Hospital, citing rates that were 50% higher than competitors. After a well-publicized dispute, Exeter lowered its rates.
Health plan designs in New Hampshire are evolving faster than in other parts of the country, at least partly because of the price transparency, according to the 2014 study. Enrollment in high-deductible plans grew more quickly than the national trend. And health plans started offering incentives to members who choose lower-cost sites of care—such as waiving the deductible for selecting a freestanding ambulatory surgery center rather than a hospital-based facility.
In response, Dartmouth-Hitchcock Medical Center, St. Joseph's Hospital and Southern New Hampshire Medical Center opened their own freestanding surgery center, the Surgery Center of Greater Nashua, as a joint venture.
Dartmouth-Hitchcock CEO Dr. Jim Weinstein wrote an October op-ed in the New Hampshire Union Leader stressing that consumers need information not just on price, but also on outcomes. The academic medical center publishes both on its site. The hospital did not respond to a request for comment.
“Our overriding concern is just providing accurate information that is meaningful to consumers,” said Steve Ahnen, president of the New Hampshire Hospital Association. “Price transparency is an emerging and important benchmark.”
Of course, it's often not possible for patients to shop around for the best price and quality, particularly in emergency situations, noted Michael Morrisey, chair of health policy and management at Texas A&M Health Science Center. He agreed that consumers also need information on quality to make informed decisions.
There also are concerns that in markets where prices are transparent, rates tend to narrow and average cost rises, said David Newman, executive director of the Health Care Cost Institute. “There can be adverse effects of price transparency,” he said.
Brannen said the state wants NH Health Cost to expand its offering to enable employers to compare health plan premiums and benefit designs. And there are plans to provide a link to the CMS quality data so that consumers can compare price and quality.
State lawmakers have proposed bills requiring providers to publish their charges, but ultimately the state has continued to invest resources into NH Health Cost, Brannen said. The website has “relieved the responsibility on providers for posting rates,” he said.
Providers and insurers in other parts of the country are likely to face greater pressure for transparency, and soon. To get ahead of the wave, some providers are publishing their prices and quality data on their own initiative. “Consumers are now on the hook for much more of the cost than they used to be,” Morrisey said. “Even if states don't do much, the market will push payers in that direction.”