Posted on July 27, 2017

Treating the Causes of High Health Costs, Not the Symptoms

A Call for More Transparency

By Susan Dentzer and Caroline Steinberg

As Senate Republicans search for an acceptable compromise for repealing and replacing the Affordable Care Act, the reality is that no measure under consideration would actually lower the costs of health care. Fixated on cutting premiums for people who buy coverage in the individual health insurance market, the GOP seems bent on allowing health plans to offer fewer benefits or to push even more costs onto consumers through higher deductibles and coinsurance. So why are these policy makers intent on merely treating symptoms by tackling health insurance premiums, rather than addressing the underlying causes of excessively high health care costs?

Health economists have argued for years that one driver of high health care costs is that the health care market is skewed by information asymmetries. Most people lack the information that they need to make sound decisions, whether about undergoing treatment, or about what constitutes an appropriate price or level of quality for a medical intervention.  Relatively few are even aware that their choice of health plan, physician, or treatment can lead to very different cost and quality outcomes.  As a result, the discipline that consumers impose on many markets as they exert their own preferences is missing from health care.

cover borderOne remedy could be more transparency re – better information and tools to assist consumers in making health care choices.  The Network for Excellence in Health Innovation, a nonprofit, nonpartisan think tank, recently conducted a review of information and transparency tools available to consumers, and found widespread gaps in both. For example, a person who needs surgery may not be able to “comparison shop” by obtaining information about the quality or costs of individual physicians or hospitals.  What’s more, it may be impossible to determine in advance which clinicians – such as anesthesiologists or post-acute providers – may be involved in the treatment, leading to “surprise bills” if any of these providers do not participate in the patient’s health plan network.

Although much of the onus for improving this situation falls on health care providers and plans, Congress and the executive branch should take steps as well. They could start with a broad public awareness campaign to educate consumers on their health care choices and the consequences.  They should enact laws that hold health plans accountable for the accuracy of the data that they publish about which providers are in the plans’ networks. Through laws or regulations, they should require health plans and providers to disclose the prices they have negotiated, so that accurate price data can be incorporated into transparency tools. They should also spur providers to engage patients more fully in “shared decision making” about treatment decisions, by extending liability protections to clinicians who use approved tools for that purpose.

A suite of measures such as these could easily be added to legislation now being contemplated in Congress.   It’s time to halt the political jockeying and pass a bill that could genuinely help address the problem of unsustainable health care costs for Americans.

Susan Dentzer is President and CEO for the Network for Excellence in Health Innovation (NEHI), and formerly PBS’ NewsHour health correspondent; Caroline Steinberg is vice president of programs for NEHI.

Download our report: Tranparency in Health Care: A Priority Roadmap for Consumer Engagement

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