Health Law

Massachusetts Health Care Quality and Cost Council: Quality and cost transparency or veils?

By David Harlow

One of the much-ballyhooed (and predictably delayed and diluted) innovations of the 2006 Massachusetts health care reform and universal access law is the development of an online resource providing cost and quality data in a consumer-friendly format.  MyHealthCareOptions debuted last week (see HCQCC press release).  After taking it for a spin, I must express my disappointment with the current state of affairs.

The site does not provide very much meaningful data.  For example, hospitals' differing rankings on quality of care are mostly undercut by notes saying that the differences are not statistically significant.  In other cases, both cost and quality data are unavailable.  In any event, cost data are not given in dollars but in ranges ($, $$, $$$, etc.), and quality data is given in the form of star ratings, as a result of the long negotiations among payors, providers and the state agency, as is par for the course in this sort of cost and quality disclosure exercise.

Many of the categories of data described on the site are empty -- I hope they are placeholders for data to be provided in the near future, but I am concerned that the data will not be forthcoming.

Even if the site were more fully realized, how would it affect health care purchasing behavior?

Except for the tiny minority of patients with truly consumer-directed health care (e.g., gold-plated indemnity plans or high deductible health plans combined with health savings accounts and no network restrictions) patients go to health care providers based on referrals from their primary care providers, within networks defined by their health care insurers.  The health care insurers that had the tiny bit of data on the new website coaxed out of them have much more data available in-house, and they have been using this information for years on developing provider networks and encouraging utilization of an appropriate mix of highest-possible-quality, lowest-possible-cost providers, consistent with the demands of patients and premium payers for world-class health care in teaching hospitals and at their affiliated providers.

In sum, cost and quality transparency won't change health care purchasing behavior unless the data provided is much more robust and employers and other premium payors are in a position to demand that health care insurers change their contracting practices.  Unfortunately, I do not think that the data will be much more robust in the near term, and I do not think that any employer or health plan will be prepared to engage in development of tiered health plans, restricting access to certain groups of providers.

Cost and quality transparency will change behavior only if there is a sea change both in the quality of this data and in the impact of the health care purchasing decision on the patient's pocketbook. 

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

Full post as published by HealthBlawg on December 15, 2008 (boomark / email).