Better Population Health Begins with Price Transparency

Don Casey MD, MPH, MBA Don Casey MD, MPH, MBA
Chief of Clinical Affairs

This three-part blog series will cover topics of importance to population health initiatives in the U.S. today, and show examples of organizations that are successfully incorporating population health programs to improve care quality and reduce healthcare costs.

Part 1: Better Population Health Begins with Price Transparency

By Don Casey, MD, MPH, MBA,  Senior Vice President and Chief of Clinical Affairs, Medecision

Addressing the growing prevalence of chronic illness and continually rising costs in today’s U.S. health system isn’t easy. Fortunately, population health initiatives that aim to improve care quality while driving down the cost of care are changing the outlook.

One increasingly urgent concern and key challenge that needs to be addressed is price transparency.

Whether purchasing health insurance or obtaining clinical care, patients want to know how much it’s going to cost. While this is often attributed to the effects of consumerism, the reality is that consumers understand the importance of price transparency and know that inquiring about the price of a service up front isn’t asking too much.

It’s also part of the reason that we’re seeing influential figures like Jeff Bezos of Amazon, Tim Cook of Apple, and Dr. Atul Gawande of the joint venture formed by Amazon, Berkshire Hathaway, and JP Morgan Chase appear on top healthcare influencers lists. These disruptors are looking to improve healthcare delivery models in ways that make care more affordable, transparent, and accessible for everyone.

These market pressures mean that healthcare organizations will need to be prepared for significant industry changes. In the coming years, we’re likely to experience service model disruptions as well as increased attention from regulatory groups—many of which will put pricing disruption at the forefront.

It’s already happening. This year, we’re seeing a big step forward in price transparency: A new rule from the Centers for Medicare and Medicaid Services (CMS) will require hospitals to post their standard changes online and update that information annually starting January 1, 2019.

As part of this evolution, we’ll need to be prepared to move beyond the idea of price transparency and position efforts in terms of value transparency – in other words, what do consumers get for their dollars, and how does it contribute to their improved health?

Forward-thinking organizations are wise to start preparing now. A few things you can do to prepare include:

  1. Consider promoting the use of shared decision-making tools that are designed to engage patients in discussions about both the cost and the effectiveness of their care options. According to the Patient Centered Outcomes Research Institute (“PCORI”), patients, their families, and clinicians face a wide range of complex and often-confusing choices when it comes to health and healthcare concerns. They need trustworthy information to decide which treatment or other care option is best for them.
  1. Develop cost estimation tools for common surgical procedures and medical conditions as well as elective options such as cosmetic surgery. A number of health systems such as Mayo Clinic and Indiana University Health have developed these tools for widespread use by patients as well as “navigator” driven support resources to help answer questions and clarify concerns.
  1. Engage patients in assuring their own safety, especially with complex and high-risk conditions. Patients should feel psychologically safe to share their concerns with the clinical team. Opinions, ideas, questions, and concerns expressed by patients are received openly and without judgment. The response of the clinical team, beginning with the first clinical interaction, sets the tone for the ongoing relationship. Evidence shows that this approach can reduce complications, assure positive health outcomes, and improve patient and provider experiences.

How scaling its population health program saves one health system $1.7 million annually

Using the Medecision Aerial platform has helped one of the nation’s largest health systems reduce readmissions, length of stays, and save more than $1.7 million annually. Additionally, the system expanded and scaled its population health program from ischemic heart patients to those having joint replacement surgery, cervical spine surgery, congestive heart failure treatment, and now manages more than 200,000 patients in risk-based contracts using the Aerial platform. Read more about their success here.

In the next blog in this series, I’ll cover the importance of value-based population healthcare.

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