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Month: February 2022

The Super Bowl of Health Care Prices

Posted on by David Sandman

When the Super Bowl rolls around each year, some people care more about the mega-expensive ads than the game itself.

While the LA Rams came out on top, the consensus winners of the advertising competition seem to be Uber Eats, Flamin’ Hot Doritos, and Google Pixel 6. It’s the one time of year that viewers look forward to commercials instead of hitting fast-forward. And the prices reflect that; a 30-second spot cost a record-breaking $6.5 million.

A lot less expensive, but perhaps more important, were ads flying above Los Angeles as part of the Power to the Patients campaign leading up to the big game. Featuring artwork by Shepard Fairey (who did the famous Obama Hope poster), they promoted price transparency in health care. One version of the ad says, “Prices are now a patient’s right. Demand them!” Another version uses the tagline “Demand Hospital Prices.”

Behind the bold graphics was a public policy reality: hospitals are now required to disclose their prices, thanks to a federal rule that took effect in January 2021. The rule requires hospitals to publish online the standard charges for their services, providing the information in two ways: (1) machine-readable files for all hospital services and (2) consumer-friendly displays of 300 common “shoppable” services. The rule is imperfect, but it’s a start on lifting the veil of secrecy that has long shadowed health care pricing and left consumers in the dark.

Yet, multiple analyses have found that compliance is low and that true transparency remains elusive. A new report found that only 14.3% of hospitals nationwide were complying with transparency requirements. And compliance was only 0.5% among hospitals that are part of the nation’s three largest hospital systems.

To be fair, the rule took effect at an especially trying time for hospitals. Given the enormous strain of the COVID-19 pandemic, it’s not surprising that implementing price transparency measures hasn’t been many hospitals’ top priority. And the penalties for noncompliance have been quite weak. As of December 2021, the Centers for Medicare & Medicaid Services had issued only 335 warning notices to hospitals that hadn’t adequately implemented the rule. Those warnings outlined specific issues for hospitals to address, but none included a financial penalty. (The rule allowed for penalties of up to $300 per day in 2021 for noncompliance — a relatively tiny amount, particularly for larger hospitals — although that daily maximum increased to $5,500 this year for hospitals with more than 30 beds.)

No rule is going to work without adequate enforcement. But levying fines will also only get us so far. Using a different lens that focused on whether hospitals were embracing the spirit if not the letter of the transparency rule, Manatt Health (with support from the New York Health Foundation) recently examined New York hospitals’ compliance and concluded that most had made incremental progress. That analysis found that 69% of New York’s hospitals had only partially implemented the requirements for machine-readable information, while 69% had implemented the shoppable services requirement.

The Manatt report also highlights examples of effective approaches to price transparency that can serve as models for hospitals that may be further behind in implementation. The most effective examples of machine-readable files were those that made it easy for a broad range of audiences (including researchers, data aggregators, app developers, and other hospitals, as well as consumers) to find pricing information that is comprehensive, accurate, and comparable across the industry. For example, many hospitals provide a single Excel file with a single Excel sheet inclusive of the required information, separated by columns; this approach makes it easy for the information to be used, sorted, shared, and compared. In the case of shoppable services, the most effective implementation included a consumer-friendly online price estimator tool to help individual consumers shop for services based on price. These are easy to find on a hospital’s website; ask the user simple, plain-language questions to guide them in their search; and provide clear estimates of a consumer’s expected out-of-pocket costs for the specified service.

Beyond the technicalities, what matters is hospitals’ desire to embrace the spirit of the law and not simply the letter of the law. Providers should want their patients to have meaningful information so they can make smart choices that provide value for money. And it’s possible. I’ve written before that “Where There’s a Will There’s a Way.” Even before the new rule took effect, pioneering hospitals were sharing price information in meaningful ways and meeting many of the requirements. Early adopters recognize that the most frequent “pain points” for patients at hospitals involve their financial experiences, and they believe that patients who know the price ahead of time are more likely to pay.

I’ve also said this before: health care transparency alone isn’t going to bring down health care costs or fix a broken system. It isn’t a magic bullet and there are serious limitations: a lot of care isn’t shoppable, the ways that prices are presented to consumers aren’t comprehensible, high prices might be used by some as an inaccurate proxy for quality, information has to be paired with financial incentives, and some people are in insurance arrangements that make them immune to the need for price information.

But information is power, and we should continue to demand more and better transparency in health care. Secrecy has been monetized — to the detriment of the consumer. A reckoning in health care is coming — perhaps its own kind of Super Bowl, where providers who deliver high-quality care at fair and transparent prices will come out on top.

By David Sandman, President and CEO, New York Health Foundation
Published in Medium on February 17, 2022

NYHealth Testimony on Rebalancing Primary Care

Posted on by teamnyshealth

NYHealth President and CEO David Sandman provided testimony to the New York State Joint Legislative Budget Hearing: Health on February 8, 2022. In his testimony, he addressed the opportunity for New York to improve health outcomes and save money by placing more emphasis on primary and preventive care:

Thank you to Chair Krueger, Chair Weinstein, and members of the Senate Finance and Assembly Ways and Means and Committees for the opportunity to testify today. I am pleased to provide testimony on behalf of the New York Health Foundation (NYHealth), a private, independent, statewide foundation dedicated to improving the health of all New Yorkers.

The COVID-19 pandemic has glaringly revealed persistent and deep problems within our health care system. As we emerge from the pandemic, we all share the goal to “Build Back a Better Health System.” We don’t want to go back to our exact same pre-pandemic system—because that wasn’t good enough. In this moment, we have the opportunity for a paradigm shift that both improves health outcomes and saves money. The solution: greater emphasis on primary and preventive care. And backing up that pledge by reallocating existing spending, not simply spending more.

The Proven Benefits of Primary Care
Primary care is a cornerstone of vibrant, thriving communities; it helps keep families healthy, children ready to learn, and adults able to pursue education and participate in the workforce. The evidence base supporting the importance of adequate and high-quality primary care is overwhelming. People who receive primary care are significantly more likely to get preventive care such as cancer screenings, flu shots, and counseling related to eating well, exercising, and quitting smoking.[1] Patients with better access to primary care also exhibit better health outcomes and management of chronic diseases like diabetes and asthma.[2] Primary care also saves money; better access to it is associated with fewer hospital visits, fewer emergency department visits, and fewer surgeries.[3] States that have invested in comprehensive primary care models have achieved cost savings; for example, in Oregon, every $1 increase in primary care expenditures resulted in $13 in savings in other services.[4]

Primary care is one of the rare and proverbial “win-wins”—better health and decreased costs. In a landmark report issued last year, the National Academies of Sciences, Engineering, and Medicine’s Committee on Implementing High-Quality Primary Care noted:

Primary care is the only health care component where an increased
supply is associated with better population health and more equitable
outcomes. For this reason, primary care is a common good, which
makes the strength and quality of the country’s primary care services
a public concern.[5]

Investing in primary care is also a key strategy for achieving racial health equity. Communities that are predominantly Black and Latino have fewer primary care providers and lower-quality health care facilities than communities that are mostly white.[6] The odds of being in a low-access area for primary care were 28 times greater in Census tracts with a high Black population than in areas with a low Black population.[7]

Yet We Underinvest in Primary Care
There is universal agreement: primary care is good for our health and good for our checkbooks, and we need more if it, especially in underserved and low-income communities.

Yet despite all the evidence, our country—and New York State—consistently underinvests in and undervalues primary care. Primary care accounts for approximately 35% of health care services in the United States each year but represents only an estimated 5–7% of health care spending.[8],[9] In simple terms, we only spend about a nickel of every health dollar on primary care.

This is not a problem to be addressed by simply throwing money at it. We already spend vast sums on health care. As of 2017, New York State spent $10,000 per New Yorker in health care costs—20% higher than the national average.[10]

But all that spending isn’t providing enough value for New Yorkers. Our health outcomes are often poor. New York does not rank among the top 10 states for positive health indicators such as rates of cardiovascular diseases, low birth weight, diabetes, preventable hospitalizations, drug-related deaths, and excessive drinking.[11]

We can and must do better. We don’t need to spend more on health care. We need to spend in smarter and better ways that return better value. The solution is to rebalance our health care spend; that means allocating a greater percentage of what we spend to primary care.

Lessons Learned: New York Should Join a Growing National Movement to Emphasize Primary Care
New York is not unique in its underinvestment in primary care. Almost all states face the same dilemma, and a growing number are taking action to correct it. A review by the Primary Care Development Corporation (PCDC) shows that nearly a dozen states have introduced or enacted policies to invest more of their health care dollars in primary care:[12]

  • Rhode Island led the way when it set a target of increasing the share of commercial insurer primary care expenditures by 5% over a five-year period. Over the same period, the State’s total expenditures fell by 14%. Rhode Island was the only state in New England to increase the supply of primary care physicians per capita, while spending by commercial health insurers grew more slowly compared with other states in the region.
  • In Oregon, legislation requires that primary care spending increase by 1% annually, with a goal that primary care account for 12% of total spending by 2023.
  • In Massachusetts, the governor introduced legislation to increase spending for primary care and behavioral health services by 30% over three years.

Other states’ experiences also suggest that enhanced investments in primary care could ease the strain on the health care workforce. Research shows that one reason for a shrinking primary care workforce is the differences in payment between primary care and specialty care. Both Rhode Island and Oregon were able to increase the number of primary care providers per capita during the time they were increasing primary care spending.

Taking Action Now
The time is ripe for New York to join other vanguard states and rebalance our spending to emphasize primary care. While other states provide models and options, New York will find its own way. What has worked in smaller states like Rhode Island to reallocate resources toward primary care may be more challenging in a state with a health care system as large and complex as New York’s.

But the way forward is clear. First, assemble an independent group of experts to agree on a definition of primary care, since there is not a standard national definition. Then, establish a method to measure our baseline primary care spending. There are numerous ways to do this. I personally prefer using billing codes as an approach because it is agnostic about both where the care takes place and who is providing it. What matters most is the care received by the patient. It matters less whether the setting is a hospital, clinic, doctor’s office, or urgent care center, or whether it is a doctor, nurse practitioner, nurse, or other provider delivering the care.

Once that baseline measurement is established, work can begin to decide the best ways to increase the proportion of health care dollars that goes to primary care services, set targets for enhanced investments in primary care, and test out pilot programs to identify the most promising models.

Conclusion
It is often said that “you get what you pay for.” When it comes to health care in New York, we are spending too little on the right things and too much on things that do not provide as much value. There is an urgent need to emphasize primary care and devote a greater proportion of existing health care dollars to primary care services. If we seize the moment, New York will be a healthier place for all.

 

[1] Levine DM, Landon BE, Linder JA. “Quality and Experience of Outpatient Care in the United States for Adults With or Without Primary Care,” JAMA Internal Medicine 2019;179(3):363–372. https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2721037.

[2] Shi L, “The Impact of Primary Care: A Focused Review,” Scientifica. 2012; 2012:432892. https://www.hindawi.com/journals/scientifica/2012/432892/.

[3] Kravet SJ, Shore AD, Miller R, Green GB, Kolodner K, Wright SM. “Health Care Utilization and the Proportion of Primary Care Physicians,” The American Journal of Medicine, 2008 Feb;121(2):142-8. https://www.amjmed.com/article/S0002-9343(07)01088-1/fulltext.

[4] Gelmon S, Wallace N, Sandberg B, Pethcel S, Bouranis N. “Implementation of Oregon’s PCPCH Program: Exemplary Practice and Program Findings,” September 2016. https://www.oregon.gov/oha/HPA/dsi-pcpch/Documents/PCPCH-Program-Implementation-Report-Final-Sept-2016.pdf.

[5] National Academies of Sciences, Engineering, and Medicine, Implementing High-Quality Primary Care: Rebuilding the Foundation of Health Care, Washington, DC: The National Academies Press, May 2021. https://www.nationalacademies.org/our-work/implementing-high-quality-primary-care#sectionPublications.

[6] Institute of Medicine Committee on Understanding and Eliminating Racial and Ethnic Disparities in Health Care, Smedley BD, Stith AY, Nelson AR, editors, “Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care,” Washington (DC): National Academies Press 2003. 2, The Healthcare Environment and Its Relation to Disparities. https://www.ncbi.nlm.nih.gov/books/NBK220358/pdf/Bookshelf_NBK220358.pdf.

[7] Brown E, Polsky D, Barbu C, Seymour J, Grande D. “Racial Disparities in Geographic Access to Primary Care in Philadelphia,” Health Affairs 2016; 35(8). https://www.healthaffairs.org/doi/10.1377/hlthaff.2015.1612.

[8] Patient-Centered Primary Care Collaborative, “Investing in Primary Care: A State-Level Analysis,” July 2019.
https://www.pcpcc.org/sites/default/files/resources/pcmh_evidence_report_2019_0.pdf.

[9] National Academies of Sciences, Engineering, and Medicine, Implementing High-Quality Primary Care: Rebuilding the Foundation of Health Care, Washington, DC: The National Academies Press, May 2021. https://www.nationalacademies.org/our-work/implementing-high-quality-primary-care#sectionPublications.

[10] New York Health Foundation, “Health Care Spending Trends in New York State,” October 2017,
https://nyhealthfoundation.org/resource/health-care-spending-trends-in-new-york-state/.

[11] America’s Health Rankings analysis of America’s Health Rankings composite measure, United Health Foundation, State Findings: New York, 2021. https://www.americashealthrankings.org/explore/annual/state/NY.

[12] Primary Care Development Corporation, “Primary Care Spend: State Policy Overview,” updated April 2021, https://www.pcdc.org/resources/primary-care-spend-state-policy-overview/.

 

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