Increased Health Care costsA Need for Transparency and Better Public Information Matthew Heyn Econom

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Increased Health Care costsA Need for
Transparency and Better Public InformationMat
thew Heyn Economic Aspects of Health CareApril
28, 2007
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Problem/Issue

• Unleveled Playing FieldWidespread practice of
  charging patients different prices for same care
• Patients need to understand health care quality
  so that they can make an educated substantiated
  decision on healthcare location.
• Bill estimation becomes more accurate and
  available to patients
• Currently providers dont have a way to improve
  by benchmarking their performance against others

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Problem/Issues Contd

• Difficult for private insurers and public
  programs to reward quality and efficiency
• National health care expenditures now account for
  nearly 20 percent of the Gross Domestic Product
  (GDP)
• The average rate of increase for health care
  premiums nationwide grow anywhere from 12 to 24
  percent annually
• Price increases dont allow patients to seek
  preventative care.

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Parameters Impacting the Problem

• CostIt is expensive for health care institutes
  to produce capital for IT upgrades that support
  price transparency data.
• Medical staff fear that price transparency will
  result in diluted health care that is focused
  on price not quality.
• Currently no incentive for patients to find
  inexpensive health careneed Health Savings Plan
  to create consumer awareness.
• Patients are willing to pay any cost for quality
  treatmentthis is why we must compound price of
  health care with quality of healthcare.

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Parameters Impacting the Problem

• In Epidemic of Care A Call for Safer, Better and
  More Accountable Health Care, the authors observe
  that consumers increasingly feel that health care
  providers are more concerned with profit margins
  and market shares than with patient well being.

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Economic Arguments
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SolutionsGovernment

• The government needs to be involved!!
• Medicare must assume leadership role in making
  cost and quality information available by
  provider and by patient condition publicly
  available
• Needs to forge public-private partnerships to
  create database that shows uniform quality
  metrics and transparent methodologies for
  adjusting quality and cost.

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What Needs to be Done

• Create a National Quality Coordination Board to
  set priorities to
• oversee the development of appropriate quality
  and efficiency measures,
• ensure the collection of timely and accurate
  information,
• encourage incorporation in pay-for-performance
  payment systems operated by Medicare, Medicaid
  and private insurance
• Invest in health information technology
• Make fundamental changes in current payment
  methods.

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What Needs to be Done

• Lower costs of health care plans so that patients
  are able to get preventative care
• Legislative modification
• Lower HSA eligible deductions
• Exempt primary care and preventative services
  from the deductible
• Guarantee choice of comprehensive health plan to
  workers covered under employer plans
• Actuarially equivalent benefits
• Set an income ceiling on eligibility for HSAs to
  reduce the tax subsidy for high-income
  individuals

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Thank You.Questions?

• www. Wisconsin.edu/summit/papers/healthcare.pdf
• http//www.cmwf.org/publications