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Price transparency's early adopters

The first health system to publish their prices in the Pacific Northwest has the Triple Aim and patient loyalty in mind

While some health systems are reluctant to publish prices without reforms of insurance practices and proper context for patients, some are trying to embrace transparency as a new model.

Washington State’s Everett Clinic is the Pacific Northwest’s first health system to post prices online for its most frequently used procedures — from blood tests and advanced imaging to anticoagulation therapy and dialysis — as of November 1st. The prices show the self-pay rates, what would be charged without any adjustments by a patient’s health plans, as well as the 25 percent discounted rate for prompt payment.

The price listing, an expansion of imaging price disclosures this past spring, is an attempt at “demystifying healthcare pricing,” said Rick Cooper, CEO of Everett Clinic, a network of 25 primary care and speciality facilities in northwest Washington.

In the era of high deductibles, even for many middle income consumers, more healthcare transparency should empower patients in their decisions of what services to use and which provider to rely on, Cooper and Everett leaders argue.

“Listing prices helps patients make informed decisions and helps us determine whether the Clinic is providing effective and appropriate care at reasonable prices,” said Al Fisk, MD, the Clinic’s chief medical officer. Fisk also pointed to the health system’s evidence-based pathway for advanced imaging to gauge the necessity of CT and MRI scans. The initiative has reduced unnecessary imaging by 39 percent and saved a collective $3 million last year for patients and payers, he said.

Whether other health systems in Washington State or the Pacific Northwest follow the Everett Clinic’s strategy remains to be seen.

Although Washington State’s lawmakers and healthcare community have embraced many aspects of health reform, the issue of price variation and efforts to mandate transparency has been controversial, among large payers especially.

This past spring saw a failed attempt to create what would have been the nation’s 14th all payer claims database, requiring Washington insurers to disclose and publicize their rates across hospital and physician clinical areas.

While state regulators, hospitals and consumer advocates supported the creation of the database, it died largely because of objections from the state’s largest insurer, Premera Blue Cross, according to Ron Sims, board chair of the state insurance exchange and former King County chief executive.

“I can shop for anything online, books and raisins, and know the price. The biggest battle we have in our area is the people who want to keep that secret,” Sims said in a recent presentation to the Maine Health Management Coalition.

In the legislative debate over the database, Premera argued that making public negotiated rates, which are often considered proprietary, would not be actionable for consumers, offering little indication of what they’re paying out-of-pocket. It also would create new administrative burdens, the company argued.

Absent mandates for payers or providers, the future of price transparency in some states may be voluntary price lists. Although, when consumers are paying different proportions of the listed price depending on their health plan, another layer of information gathering is required for them to meaningful compare their options — a barrier that leaves some observers concluding that America is still just coming out of the Dark Ages of healthcare transparency.

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