CHARLES D. BAKER
Information, please, on health care costsFOR THE SIXTH year in a row, health care costs are rising at rates that far exceed the rate of general inflation. Studies continue to suggest that health care delivery is uneven at best, and in some cases, harmful, and everybody's got a financing scheme or a policy proposal to shift the cost and quality burden onto someone else.
But most of these ideas won't solve the problem. The real problem is about much more than high drug prices or corporate profiteering. It rests with the lack of credible, publicly available -- and understandable -- information around the cost and quality of health care. If the whole thing is just a big black box, why should we be surprised if it isn't as effective or efficient as we might like it to be? When someone buys any other product or service, he or she knows the price of that product, and has some ability to determine if its quality is worth the cost. In recent years, the Internet has made consumers even better purchasers than they were before, driving down prices, improving knowledge and enhancing value. But not in health care. As consumers, we don't know the price of any common medical procedure. We don't know the price of an appendectomy at South Shore Hospital, knee surgery at the New England Baptist, or having a baby at Brigham and Women's. We don't know if it costs more or less to have an MRI at UMass Memorial or Worcester Medical Center, or if bypass surgery at the Beth Israel Deaconess costs less than bypass surgery at Massachusetts General Hospital. We also have no clue about how much it actually costs at either institution: $5,000? $15,000? $25,000? $50,000? How can anyone focus productively on doing something about the rising cost of health care when there is virtually no publicly available information to focus on in the first place? Medicare pays for about 40 percent of all hospital and physician services, but does not make its hospital rates or physician fees available to the public. It should. State Medicaid programs should do the same thing. Private plans like Harvard Pilgrim could submit their payment data to a state agency -- like the Division of Insurance -- and the agency could publish and distribute a single price schedule that averages out health plan payments to each hospital and physician group. Pharmacies should be required to post their prices, too. This kind of disclosure would give employers, consumers, and the general public, for the first time, some specific idea about what their premium and tax dollars are paying for -- and where it's all going. The black box on quality is a little better. Tremendous progress has been made during the past ten years to improve the reliability of the information that's available to public officials, health plan leaders, physician groups, hospital leaders, academic researchers, and other professionals on the quality of care delivery. It is now possible to generate understandable reports that compare hospitals on complication rates, infection rates, and sheer volume of activity concerning a particular procedure. A consumer can figure out whether or not the hospital performing his or her back surgery has done the procedure 10 times, 100 times or 1,000 times over the past year -- and how they did in performing that procedure relative to other hospitals in your area. For example, the Harvard Pilgrim website contains publicly and privately generated data that can be displayed in a variety of ways to help explain how individual hospitals perform on particular procedures, relative to other hospitals. I recently looked up performance data for 10 common procedures (normal births, C-sections, coronary artery bypass graftings, stents, and angioplasties, hip and knee replacements, back surgeries, and the like) at several Massachusetts-based hospitals. There was wide variation in the number of procedures performed, complication rates, infection rates, and overall outcomes. Moreover, there was not much correlation between the price paid by Harvard Pilgrim for each of these services, and each hospital's performance on each procedure. Strong performers on infection rates, complications and overall outcomes were not necessarily the highest priced providers. Government officials who want to reduce costs and improve quality need to make the consumer's "right to know" about the cost and quality of health care a fundamental feature of the health care reform debate. Too much of the discussion over the years on what ails our health care system has been about financing schemes, cost-shifting, and payment arrangements. If we really want to improve quality and get our arms around our cost problem, we need to begin by opening up the black box of health care pricing and performance, and make this information available to everyone. Only then can we expect the kind of intense focus on this issue that will be necessary to generate real reform.
Charles D. Baker is president and CEO of Harvard Pilgrim Health Care. © Copyright 2004 Globe Newspaper Company.
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