Transparency. Such a feel-good, all-American concept. It's not only politically correct but also intertwined into the fabric of our culture.
Over the last few months, it's become the beating drum for proposed reforms in health care. Shine the light of transparency on the inadequacies of our ailing delivery systems and consumers will receive the high-quality, cost-effective care they deserve.
From New Hampshire to California, legislators and organizations are pushing for the publication of price and performance data on providers and hospitals. Just last week, HealthCare Partners in California became one of the largest health care organizations in the country to post their procedure prices online. The group, which cares for more than 500,000 patients, published their prices reportedly in response to competition from retail clinics that promote their services with published fee schedules. Reform advocates say this will allow patients to make more rational choices as they increasingly bear the burden of health care costs. Others remain more skeptical.
While it's hard to argue that more transparency in health care is a bad thing, is it possible that its benefits are overestimated? Is it possible for transparency to cause more harm than good or distort consumers from making informed choices? A deeper look might reveal that the waters are much murkier than one would expect.
Transparency as an Ideal
From a variety of cultural and pragmatic perspectives, many societies today idealize people and organizations that are light, pure or transparent. Implied is a level of honesty, accountability and openness that allows others to judge people as they truly are, without pretense or deception.
Certainly, as an ideal, transparency makes sense for societies in which individuals rely on others for their livelihood and happiness. Transaction costs are lowered, total utility is maximized and long-term relationships are easy to form.
In daily living, we see transparency expressed in a variety of beneficial forms, ranging from food-labeling and movie-rating systems to clear packaging and open-door policies. Consumers are better able to make informed choices, and markets are better able to deliver what individuals want. It's not difficult to see why many consumers and free-market advocates view a transparent system as universally beneficial. And it's not a surprise that the health care industry would be a ripe target for greater transparency efforts.
Mixed Lighting
In practice, however, transparency is not necessarily the all-encompassing panacea or "disinfectant" one would expect. Not all transactions are simple enough to understand nor can they be readily conveyed to the average consumer. In many instances, only specific traits or microelements of a system can be effectively illuminated.
As an example, let's look at something as simple as gasoline. Most of us are probably familiar with the octane ratings for gasoline: 87 for regular unleaded, 89 for mid-grade and 93 for premium. Seemingly transparent, but what does that really mean? Is premium necessarily better? Is it worth the price?
A deeper look reveals that the choice may not be as simple. The gasoline ratings in the U.S. reflect the Pump Octane Number, which is an average of the Research Octane Number and Motor Octane Number. What are RON and MON? Oversimplified, they are an assessment of a gasoline's combustion properties under two different test conditions, one at higher temperatures and RPMs than the other.
Knowing that the PON is a reflection of the average combustion properties for that gasoline, does that help consumers choose which gasoline type they should use in their vehicles? Again, the answer is not as simple as one would prefer. Octane provides gasoline with a resistance to burn at detonation. The higher the PON, the slower the burn when ignited during the compression cycle of a piston, making it a better choice for high-compression engines.
So, what type of gasoline should you select for your car? It depends on your engine type (we won't get into those details here), and most experts suggest talking with your manufacturer and checking your owner's manual.
Physician Octane Ratings
If the transparency of something as simple and ubiquitous as gasoline quality appears to be confusing, imagine the challenges of implementing similar ratings in health care. How can one standardize the measure of something so variable and poorly understood? And, even if such measures could be extrapolated, would they accurately reflect the true nature of quality being assessed by the consumer?
Even something as straightforward as fee schedules don't really provide the transparency that consumers would ideally want. Patients really want to know how much will come out of their pockets if they see this doctor and get these specific tests. The fee schedules published by groups such as HealthCare Partners, however, only show the charges that could be incurred. In reality, the cash that comes out of a patient's pocket is more determined by the level of service obtained, the type of health plan, the deductible, the amount already spent that year, etc. You get the point. Adding transparency to an inherently nontransparent system is as helpful as shining a brighter light through a murky lagoon.
Redirecting the Light
The goals and ideals of transparency are quite clear. And there's no question that transparency will provide some benefit in addressing our confusing and opaque health care system. But it's also important to remember that transparency is not as simple a solution as it may seem. Nor will it solve the inherent complexities of our current system.
Providers and hospital systems today are taxed with the burden of delivering care in an awkward, nontransparent, third-party, fixed-reimbursement system. Mandating quality and price information about their services could provide some incremental benefit to consumers, but it also will burden overworked providers and delivery systems that must respond to questions and issues raised by a peek into just one aspect of a broken system.
It's important to be aware that shining light on one part of our health care system, without exposing the whole, could distort patients' perceptions about what is wrong with our delivery system. Quality scores for physicians or hospitals won't necessarily solve the fundamental problems of our delivery system and may only burden the overburdened.
What we need to consider is redirecting the light. Rather than focusing our transparency efforts on the outputs of our broken system, we should consider looking more closely at the inputs and machinery of the system. How are employer and taxpayer dollars being spent as it cascades through our cumbersome and fragmented health care system? What are organizations and individuals doing based on the distorted financial incentives? Are there ways to realign the incentives toward what most stakeholders want: quality, cost-effective care? To focus the light of transparency on the outputs of our health care system implies that providers and hospitals have most of the financial and organizational control of the problem. But whenever I talk with my underpaid physician colleagues who are spending long nights in academic medical centers caring for the homeless, my sense is that it couldn't be further from the truth.
About the author:
Dr. Thomas Lee is a physician entrepreneur and consultant who builds software systems and medical organizations for physicians in practice.