Value of Health Care Cost, Quality Web Sites Might Be Overestimated

by Kate Ackerman, iHealthBeat Associate Editor

Three-fourths of health care opinion leaders responding to a November 2007 Commonwealth Fund/Modern Healthcare survey said that increased quality and price transparency is important or very important to improving the U.S. health care system.

In the last couple years, several states, payers and other health care organizations have responded to this demand for transparency by developing online health care cost and quality Web sites. The thinking is that by providing consumers with information to make informed health care decisions and by injecting competition into the health care market, costs will decrease and quality will increase.

However, consumers so far have been slow to use the information, and physicians often don't know how or if they should act on the data. Touting the sites as a mechanism to transform the health care system might be overestimating their value, some health experts say.

Usefulness to Consumers

Few consumers seem to be using transparency Web sites and even fewer are making health care decisions based on the information they've found on the sites.

"Our research hasn't really shown that any of these entities sponsoring the Web sites have done much rigorous analysis of how many consumers use the Web sites and then among those consumers, how many of them it makes a difference to -- where the information provided by the Web site actually has an impact on their decision," Ha Tu, a senior health researcher at the Center for Studying Health System Change, said. Tu added that most public reporting Web sites simply measure the number of Web site hits. Researchers and the media likely account for a large number of those hits.

"Not all consumers are as proactive in shopping for providers based on price and/or quality," Tu said. For example, research shows that consumers' level of education has an impact on "their inclination to seek information about health care," she said.

In addition, on the price transparency side, the data most Web sites provide generally only apply to uninsured patients. "I think a lot of the sponsors of these Web sites have not thought very deeply about which subset of consumers the prices will be relevant to," Tu said.

Some health plans have begun to unveil cost data that are more relevant to insured patients; however, in most health care markets, commercial health plans "don't have adequate market share and, therefore, sample size to [offer] individual provider level ... risk-adjusted price information that is meaningful," Tu said. She added, "Some thought leaders in this field have talked about ... the need for either Medicare to provide its data for this kind of analysis ... or for the health plans to pull their data to get more meaningful data on episode costs." However, competition between health plans and trust concerns serve as barriers to this level of transparency, she said.

Anthony Shih, assistant vice president for quality and efficiency at the Commonwealth Fund, noted that in general, the information on health transparency Web sites "is not consumer friendly." He said, "There's still relatively little information that's useful to a consumer when they're choosing care."

"When a consumer thinks about cost, they care less about the cost of a particular service but more about the total cost to take care of an illness," Shih explained, adding, "So a doctor may be cheaper on a per visit basis, but if he sees you twice as often as another doctor, it's going to cost you a lot more."

John Colmers, secretary of the Maryland Department of Health and Mental Hygiene and a former senior program officer at the Milbank Memorial Fund, noted that there are also challenges surrounding "the reliability of data, particularly around issues of cost and charge information, case mix/severity/risk adjustment, data accuracy, sample size and data validity." The relevance and timeliness of the data are other challenges, Colmers said.

Some health plans have recognized that "too much information or too detailed information confuses most consumers," so rather than providing actual data, they have started to offer more simplistic cost and quality information guides. For example, UnitedHealth uses stars to rate health care facilities' quality. Facilities ranking in the lowest 25% receive one star, facilities rated among the middle 50% receive two stars, and facilities scoring among the highest 25% receive three stars.

Under this method, "there is less transparency to the consumer ..., but I think the consensus is that it makes the information easier for [consumers] to use," Tu said.

Impact on Providers

Some have predicted that health transparency Web sites would prompt providers to boost quality and reduce their prices. Not only is such a shift hard to measure, but it is unclear the extent to which physicians are using such sites and whether the information is driving them to make changes. In fact, some say it might even have the opposite effect and lead to price escalation.

Most of the cost or efficiency information provided online is not actionable, according to Shih. "I mean it doesn't lead to something that the provider can immediately understand what they should do."

Even if a Web site lists actual prices for services, rather than just general cost information, it is unclear how much of an effect that will have on the market. "Because that price differential really isn't driving the consumers to the lower-price physician, so if a physician sees another physician charging a higher price, it could lead to price escalation," Shih said.

Tu said that proponents of the transparency sites often "put forth what they say is evidence that these sites had a real-world impact in reducing prices, but you can't take that at face value." She added, "Prices fall due to a disparate number of reasons, and to claim cause and effect, I think it's quite a stretch."

Tu noted that even if a lot of consumers do not use quality Web sites, "the fact that this information is [still] available and shows each provider relative to [his or her] peers," will cause some people to "say that in itself has an effect in increasing quality." However, just like on the price transparency side, there is not enough rigorous research to back this claim up, she said.

To really examine the effect these sites are having on price and quality, researchers should compare both the before and after of markets with and without transparency initiatives to rule out external factors, Tu said.

Enhancing Transparency Web Sites

"Efforts to increase transparency hold out the prospects of increasing accountability, enhancing and rewarding quality, and increasing efficiency," Colmers said, adding, "We still need to overcome significant technical and political barriers" and "work towards consensus on what information we gather and how we use it."

Tu said that creators of public reporting sites should "try not to oversell [their] usefulness" and should make the sites' target audience clear, as well as clearly outline how the information can be used. She added that the sites should be better maintained and updated more regularly, especially some of the publicly sponsored Web sites, which are often mandated by legislation or regulation but lack funding.

Shih said that quality reporting sites "need more aggregate measures that are more easily understood by the consumer" but added, "I still think the largest benefits of public reporting is really going to be on the provider side and motivating providers to improve." According to Shih, "the Web sites that are most successful are the ones that actively engage the provider in the development and selection of the measures."

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