For some time now, several of my colleagues and I have been discussing the transformation of healthcare and how transparency, pay for performance, quality initiatives and the like will impact the way we provide healthcare for ever more. Just this week, CMS made headway toward pushing operational information into the hands of anyone wishing to find it! The CMS News Release from May 8, 2013 hit my email; “CMS NEWS: Administration offers consumers an unprecedented look at hospital charges” and it got my attention! (I’ll provide the link in a moment, I don’t want to lose your attention just yet!)
In 2004 or so I attended an in-service given by Dr. Regina Herzingler, Faculty of Harvard Business School, on the topic of ‘Consumer Driven Healthcare’ and I was hooked on driving quality improvement and operational performance ever since. TODAY in healthcare are the days she was speaking of long ago in that lecture. I recall her saying there will be a time when persons will be able to measure side by side the cost of hospitals in their area, as well as the outcomes of those facilities and they will be able to determine for themselves how they will spend their ever increasing out-of-pocket expenses. Healthcare reform promised this concept on the horizon and the sun just crested to spotlight the average consumer with data realities. Healthcare compare information can now be complimented with charge to payment data.
You can go to the link provided, Medicare Provider Charge Data 2011, on the CMS website and download the entire Excel file for yourself. Then you can do as I did… living in Ohio I made a quick analysis that for the 7,012 procedures listed in Ohio, these represented an average covered charge to average total payment of 56 percent. Are these the results of inflated charge masters? Why can one facility list the same DRG procedure for so much less than another? It is transparent what the covered charges were for each procedure and exactly how many CMS procedures were provided for the particular DRG (reported when n was greater than 11). Many questions will begin to form with this new release of information. Will a consumer with the ability to choose go to a facility that performed on average so many more procedures than another?
Choice may go beyond loyalty. Informed consumers act different for various reasons. What is the new marketing strategy for hospitals? Price wars could be on the horizon, outcomes certainly should be too! Is healthcare reform really all that bad? It depends who is asking and if you are a consumer or a provider. One thing is clear: your strategies need alignment quick.
Your mind may be racing with many other ‘what ifs’, such as what will people do with this information? If I am a consumer and I am signing a responsibility of payment or ABN and/or have a particular copay responsibility, anyone knows that a percent of less total charges will become less total dollars out of pocket. I would also be able to download the file and carve out the facilities I would most likely be referred and if a procedure lends itself time to make a decision, I would certainly pair that with outcomes data made available. Your marketing strategy either just got easier or harder depending on your data, and because this data is from 2011 and we are already forging well into 2013 care; what will future reports do for you?
I say, there is no time to wait. If you haven’t already gotten the message that transparency and pay for performance are soon to lead the way, I just think transparency forged ahead by leaps and bounds! Although this is beginning with inpatient PPS payment information, what other level of service is next to follow? Every effort here on out must be toward effective, efficient care at the right price – or you just could be pricing your services right off the shelf.