Transparency vs. Accountability: Washington State $3.4 Million Grant to Study Price Transparency

Washington State was just awarded a $3.4 million grant to fund a public/private partnership to examine health care price transparency.

http://www.bizjournals.com/seattle/blog/health-care-inc/2013/10/washington-wins-34-million-to.html

Specifically, the Washington State Office of Financial Management, the Health Care Authority, and the Office of the Insurance Commissioner are working with the Puget Sound Health Alliance (Alliance) to develop a statewide data center. The project will begin in October 2013 and end in September 2015.

The state will use the federal funds to establish a voluntary or mandatory reporting for all public and private purchasers by building upon claims data information already submitted to the Alliance.  The grant will also be used to create an inventory of medical cost data sources in the state; improve IT infrastructure; establish protocols on data access; and develop strategies to disseminate information to consumers.

According to the Washington State Hospital Association, price and quality transparency have emerged as important issues in Washington State as employers and purchasers seek more information to improve health outcomes and reduce costs.

At the Alliance, stakeholders continue to discuss how best to voluntary disclose negotiated prices.  The Alliance is seeking more pricing information, specifically prices that hospitals contract with carriers, so employers and purchasers can make better health care decisions.

But, there is a difference between transparency and accountability.

A Cautionary Note

While all this sounds admirable, an article that appeared in the Oct. 21st  The New Yorker, The Financial Page:  Open Season by James Surowiecki, noted that studies on transparency for CEO compensation actually raised CEO salaries, not lowered them.  And that hospital disclosure of prices, actually resulted in driving up prices.  As he concludes:

We tend to be uneasy about bargaining in situations where the stakes are very high: do you want the guy doing your neurosurgery or running your company, to be offering discounts?  Better to tell yourself that you spent all you could. And overspending is always easier when you are spending someone else’s money.  Corporate board members are disbursing shareholder funds, most patients have insurance to foot the bill…..

“Sunlight is supposed to be the best disinfectant….as long as the system for setting the pay is broken, more disclosure makes things worse instead of better.” 

We do need transparency in health care pricing, but it needs to be tied to outcomes, not just claims data, and it needs to come from peers.  We need to pay attention to two great groups in Washington State that are quietly working on transparency by building trust…..and focusing on quality and outcomes:  The Foundation for Health Care Quality and the Bree Collaborative. They don’t get headlines. Trust is not birthed in headlines. Trust is birthed in results, collaboration and hard work.

Transparency should be a question of consistent quality and outcomes.  Yes, we need to have understandable hospital bills and have answers to wide variations in costs—but those must be tied to outcomes not just the costs of care.   And we must find ways to hold institutions accountable.

Kathleen O’Connor © October 28, 2013

About Kathleen

Kathleen O’Connor: 30+ year health care consumer advocate, non-profit executive and author. For more information about Kathleen, please see "About" on the main content bar above.
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