Increased Health Care costs—A Need for Transparency and Better Public Information Matthew Heyn Economic Aspects of Heal

1. Increased Health Care costs—A Need for Transparency and Better Public InformationMatthew Heyn Economic Aspects of Health CareApril 28, 2007

2. Problem/Issue • Unleveled Playing Field—Widespread practice of charging patients different prices for same care • Patients need to understand health care quality so that they can make an educated substantiated decision on healthcare location. • Bill estimation becomes more accurate and available to patients • Currently providers don’t have a way to improve by benchmarking their performance against others

3. Problem/Issues Cont’d • Difficult for private insurers and public programs to reward quality and efficiency • National health care expenditures now account for nearly 20 percent of the Gross Domestic Product (GDP); • The average rate of increase for health care premiums nationwide grow anywhere from 12 to 24 percent annually • Price increases don’t allow patients to seek preventative care.

4. Parameters Impacting the Problem • Cost—It is expensive for health care institutes to produce capital for IT upgrades that support price transparency data. • Medical staff fear that price transparency will result in “diluted health care” that is focused on price not quality. • Currently no incentive for patients to find inexpensive health care—need Health Savings Plan to create consumer awareness. • Patients are willing to pay any cost for quality treatment—this is why we must compound price of health care with quality of healthcare.

5. Parameters Impacting the Problem • In Epidemic of Care: A Call for Safer, Better and More Accountable Health Care, the authors observe that consumers increasingly feel that health care providers are more concerned with profit margins and market shares than with patient well being.

6. Economic Arguments

7. Solutions—Government • The government needs to be involved!! • Medicare must assume leadership role in making cost and quality information available by provider and by patient condition publicly available • Needs to forge public-private partnerships to create database that shows uniform quality metrics and transparent methodologies for adjusting quality and cost.

8. What Needs to be Done • Create a National Quality Coordination Board to set priorities to: • oversee the development of appropriate quality and efficiency measures, • ensure the collection of timely and accurate information, • encourage incorporation in pay-for-performance payment systems operated by Medicare, Medicaid and private insurance • Invest in health information technology • Make fundamental changes in current payment methods.

9. What Needs to be Done • Lower costs of health care plans so that patients are able to get preventative care • Legislative modification: • Lower HSA eligible deductions • Exempt primary care and preventative services from the deductible • Guarantee choice of comprehensive health plan to workers covered under employer plans • Actuarially equivalent benefits • Set an income ceiling on eligibility for HSAs to reduce the tax subsidy for high-income individuals

10. Thank You.Questions? • www. Wisconsin.edu/summit/papers/healthcare.pdf • http://www.cmwf.org/publications