On November 1, 2022, Digital Health posted a Letter to the Editor opinion article written by Jeffrey Sachs. The full article can be found here, as well as below.
“What would happen if a supermarket sold artichokes for anywhere from $1 to $10,000 but wouldn’t tell you in advance how much your artichoke will cost?
You wouldn’t shop at that supermarket. Unless, of course, it was called the American healthcare system.
Despite its remarkable ability to treat and cure afflictions, healthcare is one of the most opaque and least consumer-friendly industries in the nation’s economy. Prices vary widely for the same services in the same city. And patients have no idea how much they will have to pay out-of-pocket until weeks later when they receive bills in the mail. This makes it just about impossible for a patient to make rational choices based on price and quality.
But a revolution may be brewing in the way Americans shop for healthcare.
Starting this past July, the Centers for Medicare and Medicaid Services began enforcing rules that require health insurers to disclose the rates they negotiate with in-network providers and the potential out-of-network amounts patients may owe. The cost to insurers if they do not comply is stiff: $100 per patient per day for each violation.
Starting in 2023, insurers will be required to disclose the costs of 500 covered services using on-line self-service tools. In 2024, health insurers must include personalized information for all medical services to all consumers who ask for it. These rules follow earlier requirements by the federal government for hospitals to disclose their prices.
How will more price transparency bring about a healthcare revolution?
If consumers have more information about the price of health care services they’re receiving, they will be better shoppers, choosing the better, lower-cost options, and eventually forcing higher-priced players to lower their prices. In addition, introducing more competition and the forces of supply and demand into healthcare could improve quality and the overall consumer experience.
Some critics say the information that will be available will be too complex and consumers’ decisions are too irrational in healthcare for transparency to make a big difference. They maintain that despite the well-intentioned efforts by the federal government, greater transparency for consumers will never bring sufficient market forces to bear to bring down prices and improve the quality of care.
But such critics are ignoring the work now being done by the digital health sector and nonprofits that are moving to fill the gap between a collection of data and a transparent healthcare system. It’s the rise of data translators.
One approach is exemplified by the San Diego-based start-up Turquoise Health, which focuses on helping patients know prices for healthcare services before they show up for treatment. Consumers use Turquoise Health’s website to shop for healthcare services and research providers for quality of care. To obtain quality metrics it uses machine learning to automate the processing of thousands of payer and provider files containing millions of records. To further transparency, Turquoise Health shares its database with referring providers, care navigation portals, and employers.
Here’s another approach: Garner Health, founded in 2019, offers a service designed to help people sort through physicians based on the quality of care physicians provide. The company recommends doctors based on its medical claims database, not from the crowdsourced opinions of patients. The company’s algorithms comb through 200 million patients’ worth of claims and then compares the procedures doctors prescribe with those considered best practices in scientific literature.
A third approach in the trend of data translation has been taken by the non-profit Fair Health. It has the largest repository of private medical claims data in the United States plus the entire collection federal government’s Medicare Parts A, B, and D claims data. It offers price information and data analyses in varying formats to consumers, businesses, insurers, health systems and government agencies.
Some skeptics assert consumers will never be able to shop for better outcomes or lower prices. But companies like these are increasing transparency, developing flexible health plan designs, enhancing financial incentives, and providing more convenient options, empowering patients to become active consumers when making health care choices.”