Increased Transparency Essential to Goals of Improving Health System Performance and Reducing Spending; Large Majorities Favor Requiring Reporting of Drug Prices, Medical Loss Ratios
New York, November 19, 2007—Health care providers, insurance companies and drug makers should make information about prices available to the public, according to a new survey of leaders in health care and health policy. The latest Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey finds widespread support for such measures: In addition to the reporting of provider quality and prices, 86 percent of respondents support public reporting of drug prices charged to major purchasers, and 82 percent support the public reporting of medical loss ratios—the share of premium dollars that private insurance companies spend on actual medical care, rather than marketing, administration, and other expense or profit.
The survey focused on transparency in health care quality and pricing—that is, the public reporting of such information by name of hospital, physician practice, or other health care provider. Three-quarters of health care leaders believe increased transparency in quality and price is essential to improving the performance of the U.S. health care system.
Improved transparency can help reduce the ever-increasing spiral of health care costs, the respondents said, but only to a small degree. Two-thirds (69%) of opinion leaders see improved transparency as a means of reducing health care spending. There is great variability of opinion on how great an impact transparency would have on cost. Seventeen percent believe it will reduce spending by more than 5 percent, while 31 percent think it will reduce spending by 1 percent to 5 percent.
On the other hand, four out of five (81%) opinion leaders think that more widespread public reporting of information could stimulate providers to improve their performance through quality improvement activities. "Transparency is important because it motivates physicians and hospitals to assess and improve their care," said Commonwealth Fund President Karen Davis. "For those providers that aren't doing well, public reporting serves as a wake-up call to identify problems and improve performance."
Two thirds of the opinion leaders surveyed believe increased transparency could also help patients make more informed decisions about their health care. However, only 8 percent think patients will be able to make such decisions in the next two to three years, given the information available to them. "Beyond just providing more information, we need to learn more about the types of information that are useful to patients," said Dr. Tony Shih, the Fund's assistant vice president for Quality Improvement and Efficiency. "For instance, it's not just the price of a specific visit or procedure that''s meaningful, but the total price for treating a condition over time."
Despite the broad support for improved transparency, there are significant barriers to implementation, including the logistical issues of collecting data and making information comparable across plans and comprehensible to patients. Survey respondents named the following key strategies to improve health care quality and cost transparency:
- sharing the costs of data collection for performance measurement across providers, insurers, and the government (75%);
- ensuring widespread adoption of health information technology (88%);
- establishing a new public/private national entity to set standards for measurement and reporting and to be accountable for health system transparency (56%); and
- paying providers based on publicly reported quality and price data (54%).
Given increasing public attention to the state of the U.S. health care system, most of the 2008 presidential candidates have put forward health reform proposals. Seventy percent of health care opinion leaders surveyed believe it is important for the candidates to make a system of public reporting part of their reform plan. "We've seen more bipartisan agreement on the issue of transparency than we have for many others," Davis said.
The survey of leading health care experts representing a diverse range of professional and ideological perspectives is the 12th in a series from The Commonwealth Fund, and the fourth conducted in partnership with Modern Healthcare magazine. Commentaries on the survey results by Robert Galvin, M.D., director of global health care for General Electric, and Paul Ginsburg, president of the Center for Studying Health System Change, appear in the November issue of Modern Healthcare. The commentaries are also posted on the Fund's Web site, along with a Commonwealth Fund Commission on a High Performance Health System Data Brief discussing the survey findings,
Opinion leaders surveyed included experts from four broad health care sectors: academia and research organizations; health care delivery; business, insurance, and other health industry; and government and advocacy groups. Elected officials and media representatives were excluded.
Methodology: The Commonwealth Fund Health Care Opinion Leaders Survey was conducted online by Harris Interactive between October 1, 2007, and October 28, 2007. The survey was administered via e-mail to a panel of 1,294 opinion leaders in health policy and innovators in health care delivery and finance. The final sample included 241 respondents from various industries. Typically, samples of this size are associated with a sampling error of +/– 6.3 percent. However, that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated. The sample was developed by The Commonwealth Fund, Modern Healthcare magazine, and Harris Interactive. Data from this survey were not weighted.