Price Transparency in Value-Based Care

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Six years ago, a private coalition of providers, payers, and purchasers established the Healthcare Transformation Task Force (HTTF) with one objective: to accelerate the U.S. healthcare industry’s transition to a value-based model.

With this goal in mind, the task force made it their mission to see 75 percent of their respective businesses successfully engaged in value-based payment arrangements by 2020. So where are they now?

The HTTF released a progress report at the end of 2018 announcing that its provider and payer members had shifted over half, or 52 percent, of their member businesses to a value-based payment model—up from just 30 percent of participating businesses reported in 2015.

The task force still aspires to reach its 75 percent participation goal by the end of this year. Even now, their efforts have already demonstrated significant progress toward industry-wide value-based payment adoption. But this fact only highlights what we already know.

For the past several years, alternative payment models—like value-based care reimbursement—have increasingly replaced traditional, fee-for-service models. The question now is: are patients getting better, and is it costing less?

Value-based care as a population health solution

In August 2019, Definitive Healthcare polled 1,090 healthcare leaders across the provider, life sciences, IT, financial services, staffing, and consulting verticals to assess the value-based care landscape in 2019 and beyond. 

Almost half of respondents, or 48 percent, agree that a value-based approach results in better care outcomes and fewer medical errors than other high-volume, fee-for-service models. More than that, 28.4 percent of healthcare leaders polled see the cost benefits of value-based programs—agreeing that a proactive, preventative approach to patient wellness can help manage population health needs and reduce overall care costs.

Humana—a Kentucky-based health insurance company—also reported in 2017 that value-based programs were, in some cases, responsible for lowering care costs. According to the report, physicians enrolled in the insurer’s value-based reimbursement programs saw a 15.6 percent decrease in medical costs for Medicare Advantage patients compared to Medicare fee-for-service patients.

Regardless of the success that value-based incentives have seen thus far, many leaders in the healthcare industry agree that transparency is the only way to ensure the lasting success of these programs in the future.

2019 executive order calls for price transparency

Following an executive order from the Trump Administration, the Centers for Medicare and Medicaid Services (CMS) announced in November 2019 that they were issuing two rules to increase price transparency among all hospitals, group health plans, and health insurance issuers.

The first of these policies refers to the Calendar Year 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center Price Transparency Requirements for Hospitals to Make Standard Charges Public final rule—which requires all hospitals in the United States to provide a publicly-available list of standard charges for at least 300 “shoppable services” provided by the facility.

The second refers to the Transparency in Coverage proposed rule. If passed, this would require health plans to give consumers access to an online tool that provides them with real-time, personalized cost-sharing information—including estimates of their cost liability for all covered healthcare items and services.

The proposed rule would also disclose negotiated rates for both in-network and out-of-network providers, allowing consumers to make informed, price-conscious decisions about their care.

How data transparency improves care delivery

The executive order has come at a time when conversations about the benefits of data transparency are already well underway. In 2018, Lumere published a Physicians Perceptions and Practices survey that showed a positive correlation between increased data access and improved care outcomes.

The 19-question survey polled 276 physicians on their decision-making process—particularly as it relates to improving quality and reducing costs to succeed in a value-based marketplace.

An astounding 91 percent of physician respondents agreed that having increased access to cost data would improve the quality of their care delivery. Despite this, only 40 percent of respondents reported that their facilities or health systems were actively taking steps to improve cost data access.

Though less statistically significant, the survey also reveals that physicians involved in committees that make technology and medical device decisions for their health networks are more likely to report cost data as “extremely” or “very” influential in their clinical decision-making process.

These results suggest that providing physicians with comprehensive exposure to cost data might be an effective strategy in promoting cost-effective decisions across all levels of health system management.

Webinar: 8 Top-of-Mind Trends for Physician and Hospital Buyers in 2020

As cost transparency initiatives become systematized throughout the year, they will continue to impact value-based reimbursement models. To learn more about this and other trends affecting the healthcare industry in 2020, tune into our webinar discussion with Definitive Healthcare CEO Jason Krantz.

For more information and to access the on-demand webinar replay, visit:

8 Top-of-Mind Trends for Physician and Hospital Buyers in 2020

Don't have time to watch the webinar replay? You can also read about the top healthcare trends in 2020.  

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