Restructure Medicare & Medicaid: Economic Factors—Possible Solutions
3) Improving Cost & Quality Transparency
¢ Improving cost and quality transparency of healthcare services could help doctors and patients make more informed decisions for each situation.
° Though enhancing competition and price transparency in healthcare is not easy,' new models for encouraging “comparison shopping” are emerging: - Castlight Health, a start-up financed by venture capitalists and the Cleveland Clinic, is working to build a search engine for healthcare prices? - Other services beginning to publish price information: Thomson Reuters, Change: healthcare, and health insurers (e.g., the Aetna Navigator)?
* A 2007 study by Deloitte proposes a “Price Transparency Checklist for States”:
provide prices for services that matter to consumers
make it easy to understand
keep care providers, insurance & pharmaceutical companies engaged and informed provide price and quality measures
keep expanding price transparency initiatives
maintain methodological rigor
promote access and use of price information
evaluate impact and ROI
Source: 1) The Market for Medical Care: Why You Don’t Know the Price; Why You Don’t Know about Quality; And What Can Be Done About It, by Devon M.
Herrick and John C. Goodman, March 12, 2007; 2) “Bringing Comparison Shopping to the Doctor's Office,” The New York Times, June 10, 2010; 3) Healthcare
KP Price Transparency: A Strategic Perspective for State Government Leaders, by Deloitte Center for Health Solutions, 2007 www.kpcb.com
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Restructure Medicare & Medicaid: Economic Factors—Possible Solutions
4) Deploy Cost-Benefit Analysis for Medical Technology Spending
e Deploying cost-benefit analysis for medical technology spending can help ensure we are spending resources wisely.
e Directly measuring the impact of new technology on total healthcare spending — and its true value — is very difficult'
e The Kaiser Foundation outlines some of the more common policy suggestions for dealing with this driver of costs: — Cost-effectiveness analysis (i.e., comparative effectiveness)
— Rationing (unlikely to be adopted owing to political sensitivity), regulation, budget-driven constraints (used by other countries but generally not popular in the U.S.)
— Market-based rationing (consumer-driven healthcare, pay-for- performance, information technology)
Source: 1) “How Changes in Medical Technology Affect Healthcare Costs,” Kaiser Family Foundation, March 2007. (@E) www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 310
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