Transparency — the new moral imperative — has much to recommend it, but it is not a panacea. Giving people information about health care providers, or health plans, may or may not make them better “consumers” — whether the information is about price or quality. Indeed, a lot has been written in recent months about the unanticipated effects of price transparency — not all of it giving aid and comfort to those purchasers who are hoping that providing information will turn their enrollees into frugal, money saving consumers. “It ain’t necessarily so” — and not just because the information is complex and not easily transmitted. We have the price-placebo effect, — I personally like to call it, “The Neiman Marcus effect” — if the price tag is big enough, it has to be better — or, more academically put by behavioral economists, people tend to value stability more than change, and fear loss more than appreciate the potential benefits of change.
The point of these cautionary notes is not to criticize or denigrate transparency. Both are long overdue in a sector of our economy that has gone for far too long without sufficient scrutiny. As health care is now consuming 16% of our national GDP, scrutiny becomes not just appropriate, but an absolute necessity. But the most likely users of information about the cost and quality of health care may not be its ultimate consumers, but rather, its providers — the doctors and hospitals whose work is being analyzed and reported on, often to the discomfort of those being evaluated. The real benefit of transparency will come from the pressure it puts on providers to do better — to more rigorous self-examination, knowing that external examination is out there, and to even the most prestigious institutions, to remember that the world is watching, and no longer taking it for granted that their quality is as good as it gets, or its prices justified. Transparency may cause some angst, but its ultimate benefits outweigh its psychological costs. So, turn on those lights, and let’s take a closer look at what we’re getting from our health care system.
Dolores L. Mitchell, Executive Director of the Group Insurance Commission of the Commonwealth of Massachusetts, the agency that provides life, health, disability and dental and vision services to over 285,000 State employees, retirees and their dependents.
Dolores,
We agree with you that, although transparency is not a panacea, it will play an important role in improving quality and slowing costs. Research supports your conclusion that providers – and their patients – may be the greatest beneficiaries. We know from studies and analyses of states with broader public reporting requirements – Pennsylvania, for example – that health care information has done more to stimulate improvement by providers than to guide consumer decision-making. That’s why Blue Cross is committed to sharing data with doctors and hospitals that will help improve quality and safety and reduce unnecessary and potentially harmful care.
At the same time, we recognize that we also need to be more transparent about how we spend our members’ premium dollars. In fact, we’ve begun posting this kind of information on our website (www.bluecrossma.com). It’s a work in progress, but we believe it’s a start.
Why all the talk about transparency and making people better consumers, etc? This state has bigger fish to fry. For example, figuring out to pay for this mess which is running a huge deficit and on the short road to failure?
Too many residents couldn’t afford the plans at the 2007 prices, much less the 2008 increases that kick in on July 1, particularly those for Commonwealth Care.
When do you people get real and realize that this MA freak show is hurting a lot of hard-working taxpayers and it’s going to get worse as living costs continue to skyrocket weekly while incomes remain stagnant?
Check out HR676 for REAL health CARE reform. Mr. Dreyfus won’t like it but he’s probably made enough money off “members” to retire early.