Transparency in Health Care Prices and Quality: A Tool for Health System Reform

For today’s health care consumers, the lack of side-by-side information on the price and quality of health care services can be exasperating. Without this information, making an informed decision about which provider to choose for a particular service—such as a surgery, screening, or care for an illness—can be nearly impossible. Providing this information up front is an important step toward the goal of creating a health care system that provides higher-quality health care while controlling costs. It also empowers the public to play an active role in holding providers accountable for the care they deliver and the prices they set.

Publicly available price and quality information is critical to better, less expensive health care

Consumers need this information before they set foot in the doctor’s office. Most of the time, that’s not the case. It’s nearly impossible for many consumers to find out anything about the price and quality of care before visiting the doctor or receiving care. This problem is exacerbated by the fact that health care providers charge drastically different prices for the same care, regardless of quality. So, a consumer’s inability to gauge pricing and quality can have a huge impact on the price and type of health care that he or she receives.

Transparency in price and quality helps hold health insurers and providers accountable

To hold health insurers and providers accountable for delivering better and reasonably-priced care, the public needs a clearer picture of price and quality together. Recent news articles about the surprisingly high price tags of routine medical procedures illustrate growing public frustration over the confusing system of health care pricing. Many consumers are unaware that there is often no correlation between the price of medical care and the quality of the care delivered—some doctors and hospitals charge much more for a service even when it is not better in quality.

Trend: Consumers’ need for up-front information on health care prices and quality is growing

Current health care trends suggest that consumers’ need for price and quality information will only grow. Increasingly, health insurance plans are requiring consumers to pay more of the up-front costs of their care through high deductibles and co-insurance. Without good information about the providers they are seeing or the health care services they are receiving, consumers could end up paying far too much for care that isn’t higher quality.

Side-by-side price and quality data can help consumers make better health care decisions

While consumers cannot (and should not) be expected to “shop” for care, they have the right to information that can help them select high-quality, affordable providers and manage their own out-of-pocket medical expenses.

Side-by-side price and quality information helps the public easily compare health care services from different providers. This apples-to-apples comparison should list each health care provider, the type of service, the cost of the service, and the quality rating of the service and/or provider. Currently, it is extremely difficult to find all of this information in one place. Consumers can only obtain pieces of this comparison information on some state websites, some provider or plan websites, or in printed material distributed directly by a provider.

The role of states and health insurers in pricing and quality transparency

States and health insurance plans should focus on building and improving the tools that make price and quality information transparent and accessible to the public.

We’re seeing meaningful progress as some states improve price transparency. For example, Massachusetts recently required all health plans in the state to post real-time cost estimates on their websites.

But we’re seeing slower progress when it comes to giving consumers meaningful, understandable quality information alongside price information. While standardized measures of health care quality, like doctors’ use of appropriate services and patients’ safety, still need further development, some sources for this information do exist. These include quality comparison guides on the medicare.gov website, as well as tools offered by a few states and health plans. But states and health plans should work to incorporate quality information into a single tool so that it can been seen next to price information.

Better information helps policy makers find solutions to health system problems

Price and quality transparency can shine a light on the bigger cost and quality problems in our health care system, helping policy makers develop policies and payment reforms that improve quality and keep health care costs down.  With more data and greater awareness, policy makers can focus on how to hold health care providers more accountable for setting reasonable prices and for delivering high-quality care.

Achieving these goals requires giving the public information that is easy to find, understand, and use. When presented well, side-by-side price and quality information tools could help pave the way for major improvements in our health care system.

Stay tuned for our next post, which will share guiding principles on how to build price and quality information tools that meet the needs of health care consumers.