Health Data Transparency: The First Step in Controlling Costs 

Joseph Berardo, President and CEO, MagnaCare. (Aaron Houston NJBIZ)By Joseph Berardo Jr.

The key to effectively controlling healthcare costs is to have the ability to meet health goals for the entire employee population, while at the same time offering access to personalized care at the times that individual members need it. This new population health management approach helps to minimize costly interventions, such as emergency room visits, hospitalizations, imaging tests and surgery, and focuses on giving high-risk individuals the tools they need to overcome barriers to better heath choices.

A critical factor for population health management is access to transparent healthcare data, which can be used by employers to understand their employees’ healthcare usage and then curb costs and alter employee health behavioral patterns. This means that the data must be used in a way that is truly meaningful and promotes healthcare purchasing decisions based on value. A Commonwealth Fund survey found that 95 percent of Americans believe that having information about the quality of care provided by different doctors or hospitals is important, while 91 percent feel that having information about costs before they receive care is important.

Transparency = Empowerment

For employees, transparent healthcare data provides a window into:

  • Accurate total and out-of-pocket cost for treatment
  • Access to easy-to-understand provider quality of care and outcomes information
  • Secure medical records
  • Cost of medications
  • Knowledge about treatment benefits and risks

With access to price and quality information, employees can make informed decisions, and choose providers based on cost-effective, quality care measurements. This is significant given that 60 percent of all healthcare costs are influenced by the behavior and decisions of individual patients. Transparency also motivates providers to constantly improve and compete based on quality, price and service.

For employers, transparent healthcare data provides:

  • Standard metrics for assessing provider quality
  • Patient compliance data
  • Health status, needs, and goals of employees
  • Risks and benefits of treatments and drugs
  • Employee participation in wellness programs

Analysis of this sophisticated data can lead to improved benefit strategies, including wellness, disease management and productivity programs — ultimately reducing costs and putting the power of cost control into employer hands. It also allows for employers to identify the highest-quality provider, improve individual outcomes and enhance patient satisfaction with their healthcare coverage.

Incentive = Impact

So far the recent increase in public and private reporting on healthcare costs has yielded an inconsistent set of quality reporting measures, coupled with a lack of coordination and consistency of data. What’s more, many employers and employees alike are challenged to make real and beneficial use of the information due to a lack of expertise to translate the information in a relevant way.

In order for health data to be of significant value, patients must be motivated to use it. For example, patients covered by high-deductible plans have an incentive to seek lower cost care, but might be hampered by not being able to access negotiated fee schedules between their insurer and provider or hospital. This limits the potential impact on their actual spending. In rural areas especially, patient ability to shop around for care based on price information is limited by the low number of providers in the area.

Engagement = Cost Control

When employers get involved in employee population health, they can make a significant difference, helping employees to develop the skills and confidence they need to become more accountable for their own health. Using transparent data, employers and providers can work together to tailor communications, support and education to each employee’s level of need. This in turn can lead to employees taking a more active role in their own health and disease management.

Employers that partner with experts, such as a healthcare services company, are better able to take advantage of the new opportunities arising from the new era of patient-centric care. As more employers make use of data to measure healthcare prices and quality, and demonstrate value, treatment outcomes and access to care, the more empowered they will be in terms of controlling costs and helping curtail the high rate of U.S. healthcare spending.

Joseph Berardo Jr. is CEO of MagnaCare, an administrator of self-insured health plans for employers in New York and New Jersey.

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