Healthcare comparison tools shouldn't leave your members guessing

February 1, 2006

As the industry's largest managed care organizations continue to acquire smaller, consumer-directed health plans, it is evident that providers are making their move into the CDHP arena.

As the healthcare industry's largest managed care organizations continue to acquire smaller, consumer-directed health plans, it is becoming increasingly evident that managed care providers are steadily making their move into the competitive CDHP arena.

In order for consumers to take full advantage of new consumer-directed initiatives offered by employers and insurers, they will need greater access to decision-support tools to guide their healthcare choices. The more the healthcare system grants consumers control of their healthcare dollars, the more imperative it will be that people have access to vital data.

However, not all comparison tools are equal. The type and quality of information available as well as how it's presented and explained can vary dramatically. Bad or incomprehensible information can potentially leave consumers in a worse predicament than not having access to the information at all. When comparing hospitals, doctors or drug and treatment options, it is important that the information be complete, accurate and relevant.

When a consumer faces a risky surgery, he's conscious of the difference between returning to work quickly versus acquiring a complication or having to stay in the hospital longer (at an average cost of $30,000 per incident). Most consumers don't realize that the quality of U.S. hospitals varies dramatically. The inefficiency and variation in the quality of care results in tremendous waste.

Employers bear the cost of poor quality at about $1,800 per employee per year. For an employer with 5,000 employees, that's $9 million a year. Employers can make a difference to their bottom lines by offering employees information tools that will help them compare and choose better quality hospitals. Armed with value information, consumers can make better hospital selections and choose the quality of their care, saving their employers thousands of dollars in medical costs and reduced absenteeism.

One example of a large employer empowering its employees while attempting to lower healthcare costs is Kellogg Company of Battle Creek, Mich. Kellogg is currently providing its 16,000 employees a comprehensive decision-support framework that offers reliable, creditable healthcare information. As part of the industry-leading program, Kellogg employees can now gather health-related information on medical procedures, potential complications and risks, drug costs and formulary status as well as have the ability to compare up-to-date information for more 545,000 practicing physicians.

While there are some examples that illustrate the potential of offering consumer-accessible healthcare data, there is currently no widely available, comprehensive source for quality information that consumers can use to help them decide where to have a surgery or treatment performed. More often than not, searching through public information sources and trying to interpret what is found can be especially daunting when experiencing severe illness. An effective hospital comparison tool must integrate information from many of these sources. It should also provide other relevant information that can illustrate the risks and benefits of a given treatment, provide alternatives and offer questions that consumers should discuss with their physician. Finally, hospital-specific information should be provided regarding safety and associated procedure costs.

Complete Information: Integration of Multiple Quality Measures

Quality may be one of the most talked about, measured and least understood phenomena in healthcare today. Consumers need to understand hospital characteristics, patient volume, length of stay, standards and outcomes to compare hospitals. The consumer is best served if all available information can be compiled and succinctly delivered.

It is not enough to simply compare raw numbers reported by hospitals. A high mortality rate in a hospital might be a result of sicker patients even though it employs the best equipped staff to provide better care. For accurate comparison of hospital outcomes, it is important that the data be adjusted for both severity and risk. It should be noted that most hospitals use both severity and risk adjusted information internally to measure their quality, yet very few consumer hospital comparison tools use both of these important adjustment techniques.

Severity adjustment is the most common method used by consumer facing tools to equalize hospital outcome data. While the term implies that it adjusts for severity of illness, it does not take into account all the factors that help determine how sick a patient is.

Risk adjustment techniques take into consideration other risk factors such as age, gender, comorbid illness, and admissions (ER, transferred from another facility, ambulatory). For example, if the admission source is ignored, hospitals with more emergency and transfer patients are unfairly penalized. Without risk adjustment, differences between hospitals' results may be due to differences in the age of the population or severity of illness, rather than to differences in the quality or efficiency of care, resulting in inaccurate or imprecise reporting.