Employers driving transparency - are you ready to publish your prices?

August 2007

On May 9, the Department of Health and Human Services (HHS) announced hat, less than one year after launching the HHS Value-Driven Health Care Initiative, more than 100-million health plan enrollees are served by plans committed to the four cornerstones of healthcare improvement established by President Bush's

Executive Order issued in August 2006. The order's four cornerstones are:

1. Transparency in pricing
2. Transparency in quality
3. Adoption of health information technology standards
4. Provide options that promote quality and efficiency in health care

This level of commitment is a result of extensive efforts by HHS Secretary Mike Leavitt who has traveled to over 30 states promoting the four cornerstones and value-driven health care. He has targeted his message to private and public sector employers since they are the largest collective purchasers of health insurance and health care benefits.As such, health care benefits are a substantial internal expense for these employers.

The government, and other transparency advocates, view employers as an impetus to healthcare reform. The message being sent to employers is that fostering the four cornerstones will lead to improved quality of care at a lower cost. Employers are encouraged tohelp employees make value-based decisions in purchasing healthcare services,thus reducing the employer's internal health care benefit expense.

HHS is encouraging employers to use their health plan "purchasing power" to support the cornerstones. The agency has collaborated with The Leapfrog Group and Bridges to Excellence to develop tools employers can use in selecting a health plan for their company. One of these tools includes sample questions designed to help assess how a health plan is fostering the cornerstones. For example, there is a section on Transparency of Price Information. One of the questions included in this section asks the user to describe what Web-based cost-estimation tools the health plan will make available to employees for hospital services. This tool is designed to help employees "shop" and compare prices for health care services based on the best value of care.

Here are some questions you may wish to consider related to this issue:

Do employers have the necessary level of knowledge to be leading this initiative?
Can employers adequately educate consumers on how to make valid price comparisons and healthcare provider decisions?
How will issues be addressed related to the consistency and accuracy of price information that is disclosed?
Does the provider community need to shift the momentum so that hospitals are the ones educating patients on health care decisions?
Do hospitals need to be proactive and become pioneers of transparency by developing internal transparency mechanisms?

We'd love to hear your thoughts on this issue. Please post your comments by clicking here and see what othersare saying about this important topic.

The message HHS is sending is very clear. And, regardless of which advocacy group is leading the transparency initiative, hospitals need to be prepared to disclose their prices. Have you considered the following:

Is your organization ready to publish its prices?
Are you prepared to defend your prices once you disclose them?
Are you prepared to educate patients on how to make accurate price comparisons?

For more information on this topic, click on these links:

Author: Susan Horras is a manager with RSM McGladrey's Midwest Regional Health Care team. For more information, please contact Susan at 515.558.6652 or susan.horras@rsmi.com.

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