Offer Information on How Healthcare Costs and Quality Relate

Over the past decade, some developers of healthcare quality reports have expanded their focus on value by incorporating information about costs. Reporting about costs remains an emerging area, with great potential and great challenges. In many cases, the kind of information that could actually help consumers make decisions based on costs as well as quality is not readily available.

EXAMPLE: Minnesota Community Measurement Reports Total Cost of Care

Title: Minnesota HealthScores: Cost of Services & Procedures Ratings
Sponsor: Minnesota Community Measurement
URL: http://www.mnhealthscores.org/cost-of-services-procedures-ratings

One of the first organizations to report healthcare cost information to consumers is Minnesota HealthScores, which publishes comparative information on the total cost of care associated with specific medical groups as well as data on the costs of specific services and procedures.

Source: Minnesota Community Measurement. Minnesota HealthScores. Available at http://www.mnhealthscores.org/

Challenge: Costs Versus Charges

One of the biggest obstacles is that information on charges for services and procedures, which is sometimes available, doesn’t tell people what their costs will be. For example, you may have access to information on the charges of different hospitals for a particular procedure. But there are two problems with this kind of information:

• First, insurance plans almost always pay less, sometimes a lot less, than charges. Typically, the only people who have to pay full charges are the uninsured. Since the differences in charges across facilities may have no relationship at all to what they negotiate with plans, providing comparative information on charges doesn’t even provide a general sense of which facility is more or less expensive.
• Second, consumers are more interested in what they have to pay than in what their insurance plan or employer is paying. What they pay is a function of the benefit design of their plan.

People who have high-deductible health plans are more interested in the full price since they may be paying it. But even in this case, they typically pay a negotiated rate rather than full charges.

An Opportunity To Educate

While you may not be able to provide useful cost information to your audience, you can help them understand more about healthcare costs and how to lower their own costs while still getting high-quality care. It is important to emphasize that high cost and high quality do not necessarily go hand in hand. This can help people avoid interpreting a high price as an indicator of high quality.

One helpful tactic is to suggest questions that consumers and patients can ask providers, including their physicians, to protect themselves from high costs. For example, you can encourage consumers to ask whether a generic medication is available to substitute for an expensive brand name pharmaceutical.

Learn more about this topic from FAIR Health.