UPDATE: This story clarifies data shown on the new website vs. data referenced from prior studies.
FORT WAYNE, Ind. (WANE) — With the goal of lowering healthcare costs, the National Hospital Price Transparency Conference took place Thursday in Indianapolis before an in-person audience of 150 and another 300 virtual attendees from 39 states.
The recurring question: does higher price mean higher quality?
Keynote speaker Hunter Kellett of Arnold Ventures began the day telling employers that growing healthcare costs were a “tax on your business” and insurance costs were like buying “employees a new car every year.”
Kellett said hospital quality does not explain high prices but pointed to other factors such as consolidation and market share; as hospital systems buy doctors’ practices, patients are left with fewer competitive options.
Kellett offered policy and regulation suggestions for lawmakers ranging from setting cost growth benchmarks to directly limiting excessive prices.
Kellett thought lawmakers, armed with more data, could push back on provider claims that legislative steps would result in shuttered hospitals and fewer patient options.
That data came from Gloria Sachdev, President and CEO of the Employers’ Forum of Indiana, who unveiled a new dashboard at sagetransparency.com to score healthcare systems on price and quality.
The data on the website show Indiana with the seventh highest cost in the nation relative to Medicare – higher than all neighboring states. A Harvard study had shown Indiana as high as third for inpatient costs. On average, Hoosier hospitals need 161% of Medicare charges to break even but receive 292% of Medicare.
The breakeven costs are factored by the patient mix (insured, uninsured, charity or Medicare/Medicaid) and other hospital revenue, most often from investments.
Sachdev hoped healthcare purchasers would see the large profit margins and negotiate more aggressively.
Brian Tabor, the president of the Indiana Hospital Association liked part – but certainly not all – of what he heard.
“I was surprised at the amount of time that speakers discussed some pretty heavy handed policy measures,” Tabor told WANE 15. “We really think when it comes to health care, Indiana is heading in the right direction. The market is working and I was a little surprised to hear some of the recommendations from panelists that I think are more suited to California and other states.”
The Association rejected the idea of comparing breakeven price to what is paid, emailing “this is artificially overstating the gap because of losses on physician reimbursement that are not included in the 161%.”
Tabor and Hoosier hospitals usually speak with one voice: if Indiana prices are higher, it’s because they provide higher quality care.
Conference organizers were excited by the ability to compare hospital quality with current data. When shopping for things like cars, clothing or furniture, most consumers understand the connection between price and quality. With healthcare, it’s hard to know if you get what you pay for.
Chris Whaley of the RAND Corporation said their latest study showed quality and price do not always go hand in hand. “Many high-quality hospitals have low prices,” he said.
Tabor pushed back. “There’s actually recently published research to say that in fact, that’s not true: there is an association.”
The RAND Corporation will release the full RAND 4.0 study at a later date. It analyzes claims data from employers and private insurers that included more than 4,000 hospitals and 4,000 additional ambulatory surgical centers across 49 states and the District of Columbia.
By drilling down by state, region or healthcare system, the dashboard shows quality and price scores. Even hospital to hospital comparisons across states are available. Hoosiers could compare their local hospitals with nationally-known names such as the Mayo Clinic, Cleveland Clinic or UCLA Medical Center.
The site utilizes both public and proprietary data to compare hospital prices and quality. Data sources include:
- RAND National Hospital Price Transparency Study (current data set: RAND 4.0)
- National Academy for State Health Policy
- Turquoise Health
- Quantros / Healthcare Bluebook
- Centers for Medicare and Medicaid Services
Tabor said Indiana hospitals have moved prices lower already, despite what some speakers at the conference suggested.
“Sometimes there’s a lot of rhetoric that is too adversarial and not solutions-focused. We need employers and providers to come together. We’re working hard to make that happen because a lot of these solutions are somewhat new, and they’re different to Indiana but they’re paying huge dividends. And I’m excited about the future.”