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October 05, 2021 05:00 AM

Dueling Opinions: What will move the needle on costs?

Niall Brennan and Paul Ginsburg
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    Niall Brennan and Paul Ginsburg

    Niall Brennan, president and CEO of the Health Care Cost Institute (left).

    Paul Ginsburg, professor of health policy, Price School of Public Policy, University of Southern California (right).

    How do you believe the federal price transparency requirements that took effect in January will ultimately affect costs?

    Niall Brennan: In all likelihood, it’s not going to control costs at the consumer level. There is some possibility for employers to leverage information in ways that might make them better, or more aggressive, purchasers of healthcare. I’m also aware of the arguments that if hospital B finds out hospital A is getting paid more for an appendectomy, hospital B may raise its prices.

    Paul Ginsburg: I’ve always thought that as far as price transparency, the biggest potential impacts are informing policymakers and large employers about price variation that they either knew about but didn’t know concretely, or just didn’t even know about. So I think the potential of this price information is what policymakers and employers might do with it.

    How do you see consumerism and the growing number of non-traditional companies entering healthcare affecting costs?

    Brennan: I think it reflects a couple of different things. No. 1 is the pie has gotten so big that more and more people want a slice of it. And No. 2, the consumer experience is so bad in healthcare that why shouldn’t Walmart and Dollar General get involved? What I fear from a bottom-line spending perspective, however, is these won’t move the needle.

    Ginsburg: I think that the potential of consumerism as a force for competition in healthcare has been greatly constrained. One thing is the tax treatment of employer-based health benefits. But there is a little opportunity (for consumerism) with some services because of the popularity of high-deductible plans. But I don’t think it’s going to impact a lot of healthcare spending.

    Do you see promise in value-based care approaches to reduce costs and improve quality?

    Brennan: I have mixed feelings. I think value-based care is great in theory, and certainly know a lot of people who are engaged on the value-based care front. I just look at the bottom line and don’t really see any impact yet. I think it’s a lot easier to implement or be strict about it in a public care setting like Medicare.

    Ginsburg: My sense is that for the last 10 or 15 years, there’s been such broad support in both the healthcare industry, both providers and insurers—at least the leadership and policymakers like it. And in both parties. But we really haven’t progressed that far in moving toward value-based payments or alternative payment approaches. But I think we’re getting there.

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