Benefits Insight Network

1. Benefits Insight Network Health Care Price and Quality Transparency June 28, 2013

2. Benefits Insight Network What is the Benefits Insight Network? • The Benefits Insight Network is designed to provide OCHCP purchaser members with detailed actionable information on key healthcare transformation ideas along with a chance to share best practices with each other. • The goal is to provide insightful workshops monthly.

3. Guiding Principles Adding value to employer purchaser members by: • Driving efficient use of health care • Collaborating on best practices • Creating learning networks • Being a value-added resource

4. Agenda • Introductions • Defining health care transparency • Challenges to cost data • Health care pricing 101 • The need for transparency • Challenges to transparency • Benefits • Value of combining price with quality • What is happening with transparency • How to engage your health plan • Resources

5. Why we’re here “No other industry would tolerate such variations, yet the health care industry does so on a daily basis.” -- Ken Shachmut, Senior Vice President at Safeway, Inc.

6. Health Care Transparency Defined Allowing consumers access to meaningful, comprehensive, integrated information about the cost and quality of services to make informed health care decisions. Transparency is visibility to: • Cost • Total cost of care and the variability of payments • Impact of discounts • Cost variation by facility • Quality • Complication rates • Readmission rates • Hospital-acquired infections Source: Adapted from Catalyst for Payment Reform, May 2013 MBGH presentation

7. Challenges to Cost Data • Complicated pricing structure • Total cost of care is difficult to predict • Charges are not the actual cost to members • Cost transparency alone does not show health care value

8. Health Care Pricing 101: Hospital Rates Medicare developed hospital reimbursement rates on expected use of care, not on actual cost of services provided Source: Castlight Health White Paper, "Health Care Transparency 101" April 2013

9. Health Care Pricing 101: Physician Rates Medicare then developed physician rates based on a similar model of expected resources needed to provide care, not actual cost to deliver care Source: Castlight Health White Paper, "Health Care Transparency 101", April 2013

10. The Need for Transparency For purchasers: • Employer’s health care expenses continue to increase • Excessive price variation exists in the marketplace • Employee financial responsibility increases with CDHP plans

11. The Need for Transparency For employees and their families • 34% of employer health plans have a $1000+ deductible and premium is taking a greater share Source: Catalyst for Payment Reform, MBGH presentation, May 2013

12. Challenges of Transparency Four key barriers to patients’ factoring cost into healthcare decision making: • Perception – typically cost equates to quality • Inexperience – lack of history with health care shopping • Lack of interest and understanding – insurance and benefits are dull • Health care pricing – charges do not reflect the actual cost to consumers

13. Benefits to Transparency • Ability to choose high value health care options • Allows for employers and health plans to create value-driven plan designs • Promotes efficient use of care

14. Value of Pairing Cost and Quality Together To be effective, price and quality information must be tied together and easily accessible, relevant and integrated with the consumer’s experience Example

15. What is happening with transparency? • States • 34 require reporting of hospital charges or reimbursement rates • 10 states have All Payor All Claims Databases • A few states offer consumer transparency tools • Federal • Medicare operates Hospital Compare and Physician Compare tools • Private Sector • Many health plans have developed or are in the process of developing transparency tools • Stand alone transparency tool innovators are beginning to market to self-funded employers Source: Midwestern Business Group on Health, May 2013

16. What is happening in Oregon with transparency? • Two All Payor All Claims Databases • Oregon All Payor All Claims Program • Oregon Health Care Quality Corporation (Q-Corp) • Q-Corp’s consumer access website • Partner for Quality Care • Oregon Association of Hospitals and Health Systems • PricePoint system

17. How to engage your health plan in transparency Suggested transparency specifications for employer purchasers to work with their health plans • Scope – how comprehensive is the tool? Are price, quality and consumer ratings included? • Utility – are consumer decisions facilitated? • Accuracy – how reliable is data? • Consumer Experience – user-friendly? Mobile apps? • Data Exchange, Reporting and Evaluation – ongoing improvement process? Use of data? Source: Catalyst for Payment Reform: Comprehensive Specifications for the Evaluation of Transparency Tools

18. Resources • Public • Consumer Reports • FAIR Health • Leapfrog Group • Medicare • Q-Corp’s Partner for Quality Care

19. Resources • Transparency vendors • Castlight • Change Healthcare • Clear Health Costs • Compass • Healthcare Blue Book • HealthSparq • Medical Advocate Program • Truven Health Analytics

20. Benefits Insight Network Thank You!