Healthcare Transparency Index Q1 2014

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Change Healthcare tracks the costs of a wide variety of prescription, medical, dental and vision services in order to make these costs more transparent, thereby enabling health plans, self-insured employers and consumers to make value-based healthcare decisions – those that weigh both cost and quality. Change Healthcare’s Healthcare Transparency Index (HCTI) is a measure of the costs and cost variability of various healthcare services that consumers purchase on a recurring basis over time…common services like MRIs, colonoscopies, dental checkups and pediatric office visits. The information captured in our HCTI is useful because healthcare services that have a high cost and are highly variable in price provide opportunities for consumers and plan sponsors to get more value from their healthcare dollars. The inaugural HCTI was released in November 2010. It is published quarterly. Categories of services included in our latest HCTI include: Office Visits, Medical Procedures, Imaging Services, Dental Services and fully-covered Affordable Care Act (ACA) Preventive Services. • Included in the Office Visit category is: behavioral health, chiropractic/PT/OT, eye care, pediatrics, primary care, specialist and women’s health. These are further subcategorized as either high-level or low-level office visits. A High-Level Office Visit is the most substantive, where the provider is dealing with an issue that is moderate to severe in complexity and requires a comprehensive patient history, exam and degree of medical decision making. This is one of the most frequently billed codes. • Within Medical Procedures is C-section delivery, vaginal delivery, colonoscopy with biopsy, colonoscopy with removal of lesions/polyps, upper GI endoscopy with biopsy, hip replacement and knee replacement. • Imaging Procedures include MRIs, CT scans, mammograms and ultrasounds. • Within the Dental Services category, high-level subcategories include adult and pediatric preventive exams, cavity treatment and crown installation. • ACA Preventive Services include screening mammograms and colonoscopies and office visits paired with a diabetes screening, lipid screening or pap smear. Each HCTI report lists quarterly statistics by service that includes the median of incidence of care costs and a range around the median. The source of the HCTI’s cost data is the aggregation (or a subset) of more than 180 million medical claims, from among nearly 7 million Change Healthcare members nationally, from the first quarter of 2014.

Transcript of Healthcare Transparency Index Q1 2014

  • 1. Change Healthcare Corporation 216 Centerview Drive, Suite 300 Brentwood, Tennessee 37027 888.920.5234 engage@changehealthcare.com www.changehealthcare.com 2007-2014 Change Healthcare CorporationHCTI 2014 Q108/01/14Healthcare Transparency Index2014 Q1 ReportAugust 2014

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Healthcare Transparency Index 2 2007-2014 Change Healthcare CorporationTable of ContentsConsumers Need Actionable Information on Cost and Quality...............................3Facility Costs, Not Professional Fees, Drive Variability in Healthcare Costs............4Identifying Target Opportunities by High Cost and High Variability.........................6About the Healthcare Transparency Index...............................................................7About Change Healthcare........................................................................................7Transparency Matrix.............................................................................................8Appendix..................................................................................................................9Category Guide.......................................................................................................... 10Matrices...................................................................................................................... 11National Data Set....................................................................................................... 16Glossary..................................................................................................................... 55 3. Healthcare Transparency Index 3 2007-2014 Change Healthcare CorporationThe healthcare cost and quality transparency movementis contributing to a new age of healthcare consumerismin which patients will achieve what government andbusiness have not better, more affordable healthcare.Powering this transformation are patients who areexpected to cover a growing share of their healthcarecosts, and, thus, are increasingly motivated to shopfor care.According to the Kaiser Family Foundation, 38 percentof covered employees have a deductible of $1,000 ormore for single coverage (up from 18 percent five yearsago), and 15 percent have a deductible of $2,000 ormore (up from 5 percent in 2008)1. These consumerswant to assess and compare the cost and quality orthe value of their healthcare services before they buy.While cost and quality transparency is critical to theirunderstanding of value, it is not sufficient. To achievetrue consumerism in healthcare, individuals need toknow where the best opportunities are for value-basedinformation that is timely, personalized and actionable.Such objective cost and quality information empowersthem to save money for themselves, their employers andtheir health plans.This isnt just a theory. When working with health plansand self-insured employers nationwide to proactivelyalert consumers of potential cost savings on recurringmedical services and prescription medications, ChangeHealthcare has seen more than $500 in yearly costsavings per purchaser2.In fact, a recent analysis by West Health Policy Institutesuggests that transparency initiatives could cut $100billion over 10 years from health spending3. While this isa small step towards meaningfully impacting the trillionsof dollars we spend on healthcare in this country eachyear, it is a step in the right direction.Consumers Need Actionable Information on Cost and Quality38%of employeeshave a deductible of$1,000 or more15%of employees have adeductible of$2,000 or moretransparencyinitiatives could cut$100Bover the next 10 yearsChange Healthcarehas seen more than$500in yearly cost savingsper purchaser1. The Kaiser Family Foundation and Health Research & Educational Trust. Employer Health Benefits 2013 Annual Survey. http://kaiserfamilyfoundation.files.wordpress.com/2013/08/8465-employer-health-benefits-20131.pdf2. Based on a Change Healthcare case study with Cerner Corporation. Results may vary by client.3. White C, et al. Healthcare Price Transparency: Policy Approaches and Estimated Impacts on Spending. West Health Policy Center Policy Analysis, May 2014. http://www.westhealth.org/sites/default/files/Price%20Transparency%20Policy%20Analysis%20FINAL%205-2-14.pdf 4. Healthcare Transparency Index 4 2007-2014 Change Healthcare CorporationIn an effort to keep a pulse on cost variability acrossvarious medical and dental services, Change Healthcareaggregates its in-network claims from credentialedproviders across its client base, which has geographiccoverage that spans nationally and covers 7 millionlives. The prices reported are the actual costs paidfor procedures, as opposed to billed amounts. Thisdata collection results in the quarterly HealthcareTransparency Index (HCTI), which identifies the largestopportunities for savings both for the consumer andthe plan sponsor.As part of the release of the HCTI for the first quarterof 2014, Change Healthcare analyzed the relationshipbetween professional fees, such as those charged by aradiologist or physician, and facility fees acrossfour high-frequency inpatient procedures and fourimaging services.As one can see from the table below, the analysisfound that the largest variations in cost came from thefacility fees, not the professional fees. This conclusionis especially interesting given that doctors fees oftenreceive the bulk of the blame for escalatinghealthcare costs.Since the facility fees vary so widely, patients should beencouraged to ask their doctor at which area hospitalshe or she has privileges to perform a surgery or delivera baby. Once the patient is informed about their facilityoptions, they can comparison shop among facilities andstill use their same doctor.Facility Costs, Not Professional Fees, Drive Variability in Healthcare Costs1,132%Inpatient BundlesThe four inpatient procedures include hip replacement, knee replacement, C-section delivery and vaginal delivery. The orthopaedic procedures showed thegreatest variation in both facility and professional costs, although the variation was far higher in the facility costs than the professional costs.HipReplacementKneeReplacementC-SectionDeliveryVaginalDelivery$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000$1,669$2,613$4,1901,132% $32,190151%$1,669 127% $4,190$1,803 1,687% $32,225$5,300 201% $15,962$2,613 319% $10,679$2,097 57% $3,284$2,179 39% $3,033Professional Facility % Cost Variability 5. Healthcare Transparency Index 5 2007-2014 Change Healthcare CorporationGiven that facility fees can greatly impact the overallcost of the procedure, how can patients find out howmuch any given procedure will cost based on theirindividual plan, network and location?Change Healthcare offers a Cost Lookup tool thatprovides expected costs for more than 81 percent ofmedical services and 75 percent of prescriptions usedby our client population; we also provide pricing on anumber of dental and vision services. For instance, if adoctor performs a procedure at three different facilities,the associated costs for that doctor at each of thosefacilities would give the consumer a clear idea of thecosts associated with each option.Users can search for a prescription, medical, dentalor vision service, receiving accurate pricing matchedfor their location, plan design and network; a personalview of total cost, member cost and plan cost; bundledpricing that reflects the comprehensive instance of care;and quality ratings for facilities and providers from bothpublic and private data sources, including patientsatisfaction surveys.For the patient, facility shopping will have the greatesteconomic impact when the services fall within theindividual or family deductible. For example, if theindividual has a deductible of $2,500, and the facilitycost of MRIs range from $596 to $2,529, choosinga facility that costs less than the average of $1,494could mean a reduction of out-of-pocket costs for theconsumer of $1,000 or more (assuming the providercost is near the median of $144 and there are no othermedical costs to contribute to the deductible).Given the wide variation even between the averagefacility cost for a knee replacement and the highest cost,a consumer who is informed about facility costs couldsave their employer/health plan a significant amount ofmoney. While the patient may not directly benefit fromthe cost savings, since even those with high-deductibleplans will likely already have met their deductibles, theymay eventually benefit since rising healthcare costs foremployers and health plans will affect premium ratespaid by consumers in the long-term.ImagingThe four imaging services analyzed in this iteration of the HCTI included MRIs, CT scans, ultrasounds, and mammograms. Of the four, the CT scans,ultrasounds and MRIs showed the greatest variance, especially in facility costs.Professional Facility % Cost VariabilityMRIsCT ScansUltrasoundsMammograms0 $500 $1,000 $1,500 $2,000 $2,500 $3,000324%230%202%469%350%163%$596$85 $280$410$71$34-$92$38-$84$124 $559$132 $347$213$2,334$2,529121%175% 6. Healthcare Transparency Index 6 2007-2014 Change Healthcare CorporationThis release of the HCTI for the first quarter of 2014includes a series of charts that plot services intohigh/low-cost and high/low-cost variability quadrants tohelp identify services that could be targets forintervention. Change Healthcare has found thateven within a given network, charges for pharmacy,medical and dental services often vary by more than300 percent. Both low-cost and high-cost services canshow wide variability.In an effort to identify high-cost, high-variability services,Change Healthcare created the Change HealthcareTransparency Matrix (see page 8). The vertical axisrepresents the average cost of the service, while thehorizontal axis is the variability in pricing of that service.The healthcare services clustered in the top right of thequadrant, called the Target quadrant high-cost