From transparency to clarity

March 12, 2015

Healthcare stakeholders are touting the benefits of transparency, but to see real change, we also need clarity.

Everywhere we turn, we hear about the importance of transparency in healthcare. In light of the Affordable Care Act’s (ACA) disclosure rules and with the spotlight squarely placed on the industry, health plans and hospital systems, clinicians, policymakers, industry leaders and media outlets are all touting the benefits of accessible, reliable healthcare data. But while transparency is an important goal, it is only the first step toward driving improvement in our healthcare system. To see real change, we also need clarity.

What is the difference between transparency and clarity? Think of the pile of dirty dishes in your kitchen after a holiday meal. You can see that they need to be cleaned, dried and put away, but how do you start to make sense out of the chaotic mess? Now, picture those same dishes clean, with the glasses and silverware neatly arrayed on a beautifully set table. That’s clarity. Clarity means taking data elements and making them actionable by adding the context necessary to inform sound decision-making for all stakeholders-payors, plan sponsors, purchasers, researchers, practitioners and consumers.

Moving from healthcare transparency to healthcare clarity requires three essential elements:

  • Shared language. A common vocabulary gives all stakeholders a standard starting point for the conversation, analysis and comparison that advance system-wide solutions. For instance, New York State recently passed a groundbreaking law creating a standard reference point for usual and customary costs (UCC) for a given service, based on the 80th percentile benchmark from an independent, conflict-free source. FAIR Health’s benchmark data constitute the only source officially authorized to serve as UCC. Now, the State’s payors, providers and consumers can use this standard to articulate how charges and reimbursements are calculated, and resolve disputes between practitioners and payors. Several of other state legislatures are considering similar measures.

  • Shared knowledge. Individuals are personally managing more of the decision-making, and the cost, of their care. Yet surveys consistently show that a majority of adults do not know what terms like “co-payment” and “deductible” mean. How can we expect individuals who lack information about these basic terms to make sound decisions when they need to choose between a PPO and an HMO, or are enrolled in a high-deductible health plan? To manage their healthcare spending effectively, consumers need simple, contextual, educational tools that offer user-friendly resources providing apples-to-apples comparisons between plan options and clearly illustrating cost-sharing. FAIR Health provides a rich educational platform with an interactive cost-planning tool (fairhealthconsumer.org) free-of-charge to consumers thereby equipping them with insurance fundamentals and principles for understanding their own plans’ benefits, and to empower decision-making, particularly if they seek healthcare service outside their own plans’ networks.

  • Access to Reliable Data. Impartial and reliable data are a critical resource for payors, plan sponsors, and practitioners for determining appropriate reimbursement rates, fee schedules, reference pricing initiatives, bundled and accountable care organization payment programs, provider cost and quality analyses, benchmarks and more. But the key word is reliable. There are a host of data products available on the market, but users must understand the sources of the information that underlie these products. Are the data robust and geographically specific? Do the data clearly relate to specific services and procedures? Does the database have an independent source and, does it refresh the data continually? Are data aggregated using statistically defensible methodologies? Just like reading nutritional packaging at the supermarket, payors and plan sponsors need to check their source’s “ingredients.”

With a shared language, shared knowledge and reliable data, we can achieve clarity for the entire healthcare sector. And when we achieve clarity for all participants, everyone wins. Insurers and providers have more meaningful dialogues. Consumers are armed with actionable information. And insurers, providers, plan sponsors and policymakers can come together to develop new, innovative models of healthcare delivery and payment. Clarity helps build the confidence and trust that can unite all stakeholders in developing and improving the system. By insisting on clarity-and not just transparency-we can drive real change throughout the healthcare industry.

Robin Gelburd is President of FAIR Health, Inc.