Quality and Pricing Transparency in Healthcare

Since consumers rely on quality and cost information in many other segments of their lives, I believe it is the consumer who will soon begin to drive improvements in quality and price transparency in healthcare. Further, the American Recovery and Reinvestment Act of 2009 will result in the industry’s increased adoption of technologies that are critical to creating the environment of transparency that consumers will demand.

As consumers become more and more involved in their care, they are coming to realize that better information about cost and quality will allow them to make better, more informed choices. Just as they can book hotel rooms anywhere around the world—and find data on cost and quality that is readily available—they will begin to expect the same in healthcare. Providers operating in a competitive environment will be forced to improve the quality and cost of care if they are to compete effectively. In addition, transparency will encourage these consumers to reward high quality/low cost care. Over time, consumers will not tolerate a healthcare system without quality and cost transparency.

Hotels and healthcare

Already, today’s consumers feel that the current state of information is inadequate. They rarely have cost and quality details about healthcare services, and even physicians rarely have comparative information on the quality of their own care or of the care of physicians to whom they refer patients .

Quite unlike decisions about a hotel stay, the unique characteristics of healthcare decision-making includes a high degree of risk and value–both perceived and real. Healthcare decisions therefore necessitate that consumers maintain a high level of involvement in the decision-making process. Unfortunately today, most consumers overall could spend considerable time and effort to uncover a minimal level of information to make their final purchase decision. Further, even though they have researched the service, sometimes the end-user experience differs greatly from what they expected, since the healthcare delivery processes includes many touch points. This variance in the consistency of services and involvement of diverse processes in the system raises additional issues of cost and quality transparency.

Opportunities and solutions

Cost and quality transparency would help patients to make informed choices about their care, encourage private insurers and public programs to reward quality and efficiency, and compel providers to improve services by benchmarking their performance against others . To develop and implement a national strategy for health care quality measurement and reporting, for example, the National Quality Forum (NQF), a private not-for-profit membership organization, was incorporated in 1999. NQF is also involved in standardizing health care performance measurement and reporting. Some of the selected projects include cancer care quality measures, mammography standards for consumers, cardiac surgery performance measures and nursing care performance measures. Some effective state-driven transparency efforts in the US include various programs such as the Pennsylvania Health Care Cost Containment Council, California health care reform, Florida Compare Care and the Massachusetts Health Care Quality and Cost Council.

The demand for details and quality in the form of report cards and rating systems for hospitals has also provided business opportunities for private companies. Some of these report card providers are:
– “Consumers’ CHECKBOOK,” which provides “desirability” ratings for hospitals based on surveys of physicians, risk-adjusted mortality figures, and adverse outcome rates for several surgical procedures
– “Leapfrog Group,” which surveys hospitals on about 30 safety practices and then combines them to provide an overall safety score
– “HealthGrades,” which rates hospitals by individual procedures and conditions .

These report card providers may differ in the methodology of their rating systems, so it’s become important for consumers to have a broad perspective in order simply to evaluate these ratings.

Key conclusions

Going forward, the cost and quality transparency and standardization of services will act as key purchase drivers and contribute to the success of a healthcare system.

Therefore, if stakeholders in the health sector wish to look forward to assured profits from this industry, they have to execute activities such as in-depth planning, deployment, execution, and monitoring of various parameters which can equip them to deal with customer sensitiveness for quality and cost transparency.

What might the role of technology play in this arena?

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