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3 reasons health care costs are still a mystery

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Investigators at the U.S. Government Accountability Office (GAO) have come out with another of those reports explaining what agents and brokers have been trying to say all along: That patients still have a hard time figuring out what their care will really cost.

Managers of public and private programs want to choose the cheapest, highest-quality providers, and dicker for good rates on surgery, but the providers’ administrative offices rarely provide much information about how much care will really cost, and both public and private cost comparison tools tend to be lacking in detail, lacking in information about a broad range of services or hard to use.

The GAO looked at health care cost and quality transparency programs at the U.S. Department of Health and Human Services (HHS) and a major HHS division, the Centers for Medicare & Medicaid Services (CMS), at the request of a group of four Senators that included both Democrats and Republicans.

Linda Kohn, director of health care at the GAO, summarized the results of the GAO’s work. Some sections of her report could help agents and brokers come up with ideas for improving their own websites as well as thoughts about ways health shopping services should improve their sites.

See also: Make your digital health insurance front door friendlier

For a look at some of the GAO’s findings, read on.

Excerpt from report - "HHS has no measures."

1. HHS has not yet developed a good way to grade the quality of its own health cost and quality reports or other organizations’ reports.

The GAO investigators found that neither HHS nor CMS has clarified how they will reconcile consumers’ demands for clear, complete information from providers’ demands for sensitivity to their needs.

HHS developed a general framework for assessing transparency efforts, but it did not come up with a process for including consumer needs when it develops or selects measures, and it did not define criteria for selecting consumer reporting measures, Kohn writes.

CMS developed a public reporting strategy plan of its own but did not provide on measures for determining whether it has met consumers’ needs, Kohn says.

Report excerpt on lack of summary data

2. Using the data that HHS and its divisions do collect is difficult.

The GAO investigators found that the tools HHS and CMS have developed to post major health care cost and quality data generally do not use consumer-friendly language or symbols.

One quality measure for heart attack patients, for example, is labeled “heart attack patients given fibrinolytic medication within 30 minutes of arrival,” Kohn writes.

Another problem is that the major CMS health shopping databases make it difficult for patients to compare prices and quality at the same time, and they make comparing providers with one another difficult, Kohn says.

Kohn singles out one tool for praise: the CMS Nursing Home Compare 5-star quality performance rating system. “CMS officials told us that the agency plans to expand this five-star rating system to its other tools by 2015,” she says.

See also: Medicare nursing home rating system draws fire


3. CMS and HHS lack any patient-level information and are unable to perform any form of risk-adjustment.

Because the tools fail to adjust the provider cost and quality information for patient risk, patients have no way to know if the measures differ because of the nature of the providers or the nature of the patients the providers were treating.

Kohn came up with a four-step plan for improving HHS and CMS health care shopping sites:

  1. Add out-of-pocket cost estimates for common procedures to the CMS Compare Medicare shopping websites.
  2. Let CMS Compare users rank providers by performance ratings.
  3. Make it easier for CMS Compare users to filter the data and control the presentation of information.
  4. Develop specific procedures and performance metrics for health care transparency tools.


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