Consumers Are Still Held Back From Making Rational Health Decisions

Posted on November 25, 2014 I Written By

Andy Oram is an editor at O'Reilly Media, a highly respected book publisher and technology information provider. An employee of the company since 1992, Andy currently specializes in open source, software engineering, and health IT, but his editorial output has ranged from a legal guide covering intellectual property to a graphic novel about teenage hackers. His articles have appeared often on EMR & EHR and other blogs in the health IT space. Andy also writes often for O'Reilly's Radar site (http://oreilly.com/) and other publications on policy issues related to the Internet and on trends affecting technical innovation and its effects on society. Print publications where his work has appeared include The Economist, Communications of the ACM, Copyright World, the Journal of Information Technology & Politics, Vanguardia Dossier, and Internet Law and Business. Conferences where he has presented talks include O'Reilly's Open Source Convention, FISL (Brazil), FOSDEM, and DebConf.

Price and quality of care–those are what we’d like to know when we need a medical procedure. But a perusal of a recent report from the Government Accountability Office reminded me that both price and quality information are hard to get nowadays.

This has to make us all a little leery about trends in health reform. Governments, insurers, and employers want us to get choosy about where we have our procedures. They justify rises in copays and deductibles by saying, “You patients should start to take responsibility for the costs of your own health care.”

Yeah, as responsible as a person looking for his car keys in the dark. Let’s start with prices, which in many countries are uniform and are posted on the clinic wall.

Sites such as Clear Health Costs and Castlight Health prove what we long knew anecdotally: charges in the US vary vertiginously among different institutions. Anyone who had missed that fact would have been enlightened by Steven Brill’s 2013 Time Magazine article.

But aspirations become difficult when we get down to the issue at hand–choosing a provider. That’s because US insurance and reimbursement systems are also convoluted. We don’t know whether a hospital will charge our insurer their official price, or how much the insurer will cover. It might feel righteous to punish a provider with high posted prices (or prices reported by other consumers), but most patients have a different goal: to keep as much of their own money as they can.

We can gauge the depth of the cost problem from one narrow suggestion made in the GAO report that yet could help a lot of health consumers: the suggestion that Centers for Medicare & Medicaid Services (CMS) publish out-of-pocket expenditures for Medicare recipients as well as raw costs of procedures (page 31). Even this is far from simple. HHS pointed out that 90% of Medicare patients have supplemental overage that reduces their out-of-pocket expenditures (page 43). Tracking all the ancillary fees is also a formidable job.

Castlight Health is out in front when it comes to measuring the real impact of charges on consumer. They achieve great precision by hooking up with employers. Thus, they know the insurer and the precise employer plan that covers each individual visiting their site, and can take deductibles, exclusions, and caps into account when calculating the cost of a procedure. A recent study found that Castlight users enjoyed lower costs, especially for labs and imaging. Some nationwide system built around standards for reporting these things could unpack the cost conumdrum for all patients.

Let’s turn to quality. As one might expect, it’s always a slippery concept. The GAO report pointed out that quality may be measured in different ways by different providers (page 26). A recently begun program releases Medicare data on mortality and readmissions, but it hasn’t been turned into usable consumer information yet (pages 27-28). Two more observations from the report:

  • “…with the exception of Hospital Compare, none of CMS’s transparency tools currently provide information on patient-reported outcomes, which have been shown to be particularly relevant to consumers considering common elective medical procedures, including hip and knee replacements.” (Page 21)

  • “CMS’s consumer testing has focused on assessing the ability of consumers to interpret measures developed for use by clinicians, rather than to develop or select measures that specifically address consumer needs.” (Page 25)

Some price-check sites simply don’t try to measure quality. A highly publicized crowdsourcing effort by California radio station KQED, based on the Clear Health Costs service, admitted that quality measures were not available but excused themselves by citing the well-known lack of correlation between price and quality.

Price and quality may not be related, but that doesn’t relieve consumers of concerns over quality. Can you really exchange Mount Sinai Hospital in New York for Daddy-o’s Fix-You-Up Clinic based on price alone? Without robust and reliable quality data, people will continue choosing the historically respected hospitals with the best marketing and PR departments–and the highest prices.

A recent series on health care costs concludes by admonishing consumers to “get in the game and start to push back.” The article laments the passivity of consumers in seeking low-cost treatment, but fails to cite the towering barriers that stand in the way.

The impasse we’ve reached on consumer choice, driven by lack of data, reflects similar problems with analytics throughout the health care field. For instance, I recently reported on how hard a time researchers have obtaining and making use of patient data. Luckily, the GAO report cites several HHS efforts to enhance their current data on price and quality. Ultimately, of course, what we need is a more rational reimbursement system, not a gleaming set of computerized tools to make the current system more transparent. Let’s start by being honest about what we’re asking health consumers to achieve.