Catalyst for Payment Reform Pushes Price Transparency, Value-Based Payments

Employers need to band together to insist on price transparency in healthcare to combat prices that can vary by as much as 1000 percent, according Catalyst for Payment Reform (CPR) program director Andrea Caballero Dilweg.

Dilweg addressed a recent Dallas-Fort Worth Business Group on Health luncheon in north Dallas.

Catalyst for Payment Reform (CPR) is an independent, nonprofit corporation working on behalf of large employers and other healthcare purchasers to catalyze improvements in how we pay for health services and promote higher-value care in the U.S.

A group of employers created CPR in 2009 due to widespread agreement that the current payment system creates a significant barrier to improving the value of health care in the U.S.

According to a recent CPR National Scorecard, only 11 percent of commercial healthcare payments to doctors and hospitals is tied to performance or designed to cut waste. The group has a goal of having at least 20 percent of healthcare payments to be value-oriented by the year 2020.

Dilweg said transparency would deliver better value for employers. Their healthcare costs are expected to rise by 7 percent in 2013. She said more than 1 out of 3 employer-sponsored plans have deductibles of $1,000 or more.

Dilweg said more than half of U.S. middle-class families could no longer afford health insurance, compared with 15 percent three decades ago. The average family coverage has increased 62 percent since 2003 and deductibles have more than doubled.

Transparency, Dilweg said, increases the likelihood that consumers will choose the highest-value care options and allow employers and health plans to design cost-based benefit plans. She said the lack of transparency sends the wrong message: higher cost equates to better quality.

Dilweg cited these barriers to price transparency:

  • The lack of provider competition is a disincentive to reveal pricing to consumers.
  • Health plans and providers often use gag clauses in their agreements and prohibit self-insured purchasers from using claims data for price transparency.
  • Transparency could lead to unintended consequences, leading providers to raise prices to match those of more costly competitors as a proxy for quality.

Texas was one of seven states receiving a “D” grade on price transparency on a report card prepared by CPR and Health Care Incentives Improvement Institute, a non-profit advocacy group.

Twenty-nine states received a grade of “F”. Only two states—New Hampshire and Massachusetts—received an “A”.

The grades reflected the quality and scope of pricing data that states require and how well that information is disseminated.

Kerry Veitch, director of benefits for Oncor Electric Delivery, said she is working with Compass Professional Health Services to find the best prices on procedures in Dallas-Fort Worth. She said she is trying to develop grassroots support for using Compass.

“An endorsement from the guy next to you in the truck is much more effective than an Internet article,” she said.

Judy Smith, vice president of rewards for Rackspace Hosting in San Antonio, said her company uses Castlight Health for healthcare pricing. After only five weeks, about 30 percent of employees with high-deductible plans had used the service.

Steve Jacob is editor of D Healthcare Daily and author of the new book Health Care in 2020: Where Uncertain Reform, Bad Habits, Too Few Doctors and Skyrocketing Costs Are Taking Us. He can be reached at steve.jacob@dmagazine.com.

 

One comment on “Catalyst for Payment Reform Pushes Price Transparency, Value-Based Payments

  1. Thanks Steve. I’m not sure how much pressure employers are able to put on the healthcare industry because I don’t know what they have to use as leverage. Does CPR have anything more than a petition it is using? Their site lists 25 on the list so far. Would love to learn more.

    We believe patients (particularly those desperately in need of care and not able to afford it) will be far more engaged than employers in the solution to this, and perhaps that’s why you mentioned Compass.

    Reply

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