Connecticut was among 29 states nationwide to earn an “F” from health advocates for lacking consumer-friendly laws that help residents compare actual prices for health care procedures and services.
“There is no public resource in Connecticut that makes (comparison) pricing information available to consumers. That means there’s no consumer protection against egregious pricing behaviors by providers,” said Francois de Brantes, executive director of the Health Care Incentive Improvement Institute in Newtown, which partnered with Catalyst for Payment Reform to publish the “Report Card on State Price Transparency Laws.”
The Report Card’s scores reflected a state’s overall legislative effort toward health care price transparency, with states that post price information on a public website receiving more points than those that release a report or provide data to consumers only upon request. The organizations that developed the report card are nonprofits that support payment reforms to increase the quality and value of health care.
Ellen Andrews, executive director of the Connecticut Health Policy Project, said, “The score is totally warranted. Our state laws have been really behind when it comes to price transparency. We get calls from people on our hotline about this issue all the time.”
“Consumers are told to shop around for health care, but it’s really an impossible thing to do,” said Andrews.
Only two states – Massachusetts and New Hampshire – received an “A.” Both states have All-Payer Claims Databases (APCD) which systematically collect and aggregate claims from commercial insurers and public insurers (Medicare and Medicaid). Connecticut is working to establish a claims database by next year.
The claims database offers consumers true comparison pricing information unlike the report released in May by the U.S. Department of Health and Human Services that details the amounts hospitals charge Medicare for the 100 most common treatments and procedures.
Connecticut laws require health care facilities to report total charges (gross revenue) and total payments (net revenue) to the Office of Health Care Access (OHCA) in the state Department of Public Health (DPH). These total amounts are not specific to particular procedures. In addition, OHCA posts the current “pricemaster” – a detailed price list for supplies, services and pharmaceuticals – that hospitals can include on a detailed patient bill. Consumers can ask OHCA to verify hospital charges upon request.
DPH spokesman William Gerrish said the state’s grade “seems undeserved’’ because consumers have access to some pricing information on the OHCA website and through the Freedom of Information Act.
Price transparency is more important than ever because a growing number of consumers face greater out-of-pocket expenses with high-deductible health plans. “These high-deductible health plans are placing a great financial burden on individuals and families,” said de Brantes. “The cost of every health care service matters because it’s coming out of consumer’s pockets.”
Experts expect the use of high-deducible health plans to grow. Forty-four percent of the nation’s major employers are considering offering high-deductible health plans as the only benefit option to employees in 2014, a recent PwC Touchstone Survey found. Seventeen percent of all employers now offer high-deductible health plans as the lone benefit option for employees – a 31 percent increase over 2012.
The shift to high-deductible health insurance plans is part of a national trend, according to Kevin Counihan, chief executive officer of Access Health CT, an online marketplace that will begin selling health insurance plans in October with coverage effective Jan. 1, 2014, as a result of health care reform. He calls the trend the “401K-ing” of the health insurance industry, a reference to the move by employers to replace defined pension plans with 401K plans that require employees to make investment decisions.
“That’s increasingly occurring in health care. Employers are going to give a defined contribution of money to their employees and employees will be using an exchange, whether it’s private or public, to buy health insurance,” he said. The trend is “great for employers because they can fix their budgets. But most employees aren’t experienced or trained to make health insurance decisions, just like they aren’t trained or experienced to make decisions about investing their pension money. Yet they are forced to do it.”
Meantime, Connecticut’s all-payer claims database is a little over a year away from implementation, said Counihan. Access Health CT received a $6.6 million grant through the Affordable Care Act to implement the large-scale database that collects medical, dental and pharmacy claims from commercial insurers and public insurers such as Medicare and Medicaid. Consumers will have access to the data in a free web-based portal.
“Establishing the all-payer claims database is an important step to making (health care) cost and quality information more transparent,” said Counihan.
The claims database will be available August 2014 with future reports becoming “increasingly more substantive” in subsequent years, said Counihan. Although the data won’t be available in time for this fall’s open enrollment season, Connecticut is proceeding at a fast clip, he said. “It takes most states two to five years to implement an all-payer claims database. Ours will be up and running in 15 months.”
Both the Connecticut Hospital Association and the Connecticut Association of Health Plans support the state’s efforts to implement an all-payer claims database. “We have been actively engaged in the planning and development of the APCD since the very first meeting and have been working closely with the technical folks involved to make sure that it will work and that the information is useful and useable,” said Keith Stover, spokesman for the Connecticut Association of Health Plans.
Michele Sharp, director of communications and public affairs for the Connecticut Hospital Association, said “Connecticut hospitals support efforts to make pricing more transparent and meaningful for consumers.” She encouraged consumers to contact insurers for cost information. “Transparency on the part of insurers will help consumers understand their payment obligations,” she said.
Stover said insurers in Connecticut “feel very strongly that better health outcomes are achieved when members have good and readily accessible information.” He said health plans currently offer “robust member portals” that help consumers access information about benefits and providers.
For now, consumers can find some cost information by checking the Centers for Medicare & Medicaid Services report on the prices hospitals charge Medicare. (Find the data by clicking here.)
But, that report raised questions about how hospitals set prices and why they differ so widely. For example, Yale-New Haven Hospital charged Medicare an average of $85,902 for a cardiac pacemaker implant, compared to $22,096 at Manchester Memorial Hospital. The average price charged Medicare for a lower joint replacement ranged from $72,393 at Greenwich Hospital to $23,063 at Charlotte Hungerford.
“Consumers deserve to have as much information about the quality and price of their health care as they do about cars, restaurants and appliances,” said de Brantes.