Price Transparency: When Will Connecticut Get a Passing Grade?

For the second year in a row, Connecticut received a grade of “F” from the Report Card issued by Catalyst for Payment Reform and Health Care Incentives Improvement Institute on health care price transparency in the states. Maybe we shouldn’t feel so bad, because 44 other states also received a failing grade. Only three states received a “C”: Vermont, Virginia and Colorado. And only two states, both in New England, received a “B”: Maine and Massachusetts. No state received an “A.”

Why is price transparency so important? Because more and more consumers have insurance policies with high deductibles. The theory behind high deductibles is that it makes patients more sensitive to price and will encourage them to ask questions about the price of care and do some comparison shopping. But it is virtually impossible right now for patients to find out the price of a medical procedure, or to get data on the quality of the care they are about to receive. How can they make smart shopping decisions without this information? Or as Catalyst for Payment Reform puts it in their Action Brief on price transparency:

“Despite taking on a greater share of their health care costs, consumers cannot be prudent health care shoppers without information on quality and price. Consumers seeking non-urgent care would benefit the most from access to price and quality information because they have time to examine data and make decisions about predictable services, unlike in emergency situations. …Research shows that when they have access to well-designed reports on price and quality, 80% of consumers will select the highest-value health care provider.”

It turns out there is huge variation in both the price and quality of many health care services. And without transparency tools, consumers are unable to get the information they need to make an informed purchasing decision. As Francois deBrantes, CEO of Health Care Incentives Improvement Institute, writes in his recent blog, many of the states receiving an “F” are not actively trying to change that-they seem to be happy to keep consumers in the dark.

Fortunately, Connecticut is at least headed in the right direction. We have legislation in place and are on track to set up our All Payer Claims Database (APCD) very soon. The APCD will gather data from all private insurers, Medicare and Medicaid, and eventually make pricing information (without patient identification information!) available for public analysis and reporting. Having an APCD in place is an important precursor to raising our state’s transparency grade. But, as the Report Card points out, there are many more steps that states must take to make this data understandable and user-friendly to consumers and purchasers of health care.

The issue of price and quality transparency is crucial if we are to move toward a health system that provides good value for our health care dollars. Those interested in monitoring the development of Connecticut’s APCD can go here, where minutes from the APCD Advisory Council are posted. Perhaps by this time next year, Connecticut will finally receive a passing grade!



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