Sponsored Webinar: Bringing Price Transparency to Healthcare http://www.modernhealthcare.com/article/20140729/SPONSORED/307299924 About the Webinar More consumers are finally asking for price transparency in healthcare, but most providers are still engrained in the pricing and billing practices they've always used. How can organizations take the lead on providing price transparency that will benefit all the stakeholders in healthcare? By attending this webinar, you will learn: Key steps in transitioning healthcare to a more price transparent model How price transparency reduces the cost of care The benefits of price transparent organizations

1. Bringing Price Transparency to Healthcare
Pathways to Leadership Series
August 26, 2014
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2. Agenda
•Housekeeping
•Speaker Introductions
•Presentation
•Q&A
•Conclusion
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3. Speakers
Bill Kramer
Executive Director, National Health Policy
Pacific Business Group on Health
San Francisco, Calif.
Robert Shapiro
ChiefFinancial Officer
North Shore —LIJ Health System
Long Island, N.Y.
BrodieDychinco
Vice President of Strategy
HealthSparq
Portland, Oregon
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4. Bill Kramer leads PBGH’s work to advance policy in ways that improve healthcare quality and reduce costs.Bill also serves as Project Director for the Consumer Purchaser Alliance, and on the National Quality Forum Board of Directors, the National Priorities Partnership, the Measure Applications Partnership Coordinating Committee, and the AQA Alliance Steering Group. Prior to joining PBGH in 2010, Bill led his own consulting practice in which he provided policy analysis and guidance on health reform. Bill was a senior executive with Kaiser Permanente for over 20 years and holds an MBA from the Stanford Graduate School of Business and a Bachelor of Arts from Harvard.
Bill Kramer
Executive Director, National Health Policy
Pacific Business Group on Health
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5. Bob Shapiro has been CFO since August 2000 and oversees financial affairs, treasury, budget and strategic planning, among other functions for North Shore —Long Island Jewish Health System. Prior to becoming CFO, he was VP Operations/Assistant Administrator. Bob began his career as a senior accountant with Blue Cross Blue Shield of Greater New York in the 1970s. He is an adjunct professor at Hofstra University in Hempstead, N.Y., where he teaches a graduate-level course in health systems finance. He is also a fellow of the Healthcare Financial Management Association.
Robert Shapiro
Chief Financial Officer, North Shore-LIJ Health System
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6. Brodie Dychinco is the Vice President of Strategy for HealthSparq, a consumer transparency business of Cambia Health Solutions. Mr. Dychinco is particularly interested in helping to make choosing health care providers and treatment options more understandable, enabling consumers to take charge of their health. Mr. Dychinco's efforts were recognized by the Blue Cross and Blue Shield Association in September 2012 with a "Best of Blue" award. His contributions in setting a national transparency standard and roadmap for the Blues, as well as his insight to health plans implementing transparency solutions, earned him the honor of being only the 12threcipient of the Guffey award.
Brodie Dychinco
Vice President of Strategy, HealthSparq
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7. The Transparency Imperative
Who is the Pacific Business Group on Health?

8. ©PBGH 2011 8
What Purchasers are Looking for:
a Full Picture of a Provider’s Performance
Quality + Price = Value
• Clinical outcomes
• Patient-reported outcomes and experience
• Appropriateness based on guidelines
• Total cost of care
Requirements:
• Willingness to share data
• Ability to combine standardized data from
different sources

9. ©PBGH 2011 9
The Patients’ Perspective
Patients have
a fundamental right to know
about the quality and cost
of the care they receive.

10. ©PBGH 2011 10
Price Transparency
What it is (or could be):
• A tool for payers, purchasers (employers) and
policy-makers
• (Maybe) – a tool for consumers
• A key building block in containing overall health
care costs by enhancing healthy competition
on price and quality
What it isn’t:
• Publication of hospital or physician “charges”
• The solution to all our problems

11. ©PBGH 2011 11
Price Transparency
Price information should:
• Reflect negotiated discounts
• Include all costs associated with a
service or services
• Identify the consumer’s out-of-pocket
costs

12. ©PBGH 2011 12
Audience(s) Types of Price Information Needed Example
Purchasers/
Payers
The total price of individual
tests and procedures
Price of a routine
colonoscopy for use in
reference pricing
Purchasers/
Payers
The total price of bundled
services
Price for a joint replacement
for use in reference pricing
and Centers of Excellence
contracting
Purchasers/
Payers
The total price of care for
patients with certain clinical
conditions
Price of managing a patient
with diabetes
Consumers,
Providers
Out-of-pocket price to
consumers
Price of an office visit, test or
procedure
Policymakers /
Regulators
Trends in prices within and
across geographies and payer
type
Bundled price of a spinal
surgery
Uses of Price Transparency

13. Poll Question #1
Which group do you think is applying the most pressure for price transparency?
•Payers
•Patients/Consumers
•Advocacy Groups
•Government/Policymakers
•Providers
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14. ©PBGH 2011 14
Using Price Transparency in
Value-Based Benefit Design
• Set a payment threshold or
“reference price” for certain
elective procedures
• Patient can choose any
provider, but pays full
amount above reference
price

15. ©PBGH 2013 15
CalPERS: applying the concept
to hip/knee replacements
• Prices varied from $15,000 to $110,000
(commercial PPO population)
• Anthem Blue Cross and CalPERS
established a reference price.
• Results:
• Increased volume of procedures at
low-cost hospitals by ~7%
• Amount paid per surgery ~26% lower
in pilot

16. ©PBGH 2011 16
Safeway: applying the concept
to colonoscopies
• Prices ranged from $887 to $7,245 – an
8x variation – with no apparent
differences in quality.
• Use of reference price encouraged
patients to use more efficient providers.

17. ©PBGH 2011 17
Range of Prices for Colonoscopies
Cost Per Procedure – SF Bay Area MSA
$887
$916
$925
$932
$965
$981
$1,015
$1,110
$1,169
$1,249
$1,428
$1,463
$1,530
$1,535
$1,642
$1,643
$1,713
$1,721
$1,728
$1,963
$1,994
$2,099
$2,309
$2,320
$2,451
$2,771
$2,816
$2,876
$2,881
$2,987
$3,013
$3,039
$3,049
$3,271
$3,301
$3,318
$3,333
$3,367
$3,647
$3,769
$3,793
$4,518
$4,576
$5,596
$5,682
$5,734
$7,245
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z
AA
BB
CC
DD
EE
FF
GG
HH
II
JJ
KK
LL
MM
NN
OO
PP
QQ
RR
SS
TT
UU
Room & Supplies Professional Medications Diagnostics
Diagnostic Colonoscopy Providers

18. ©PBGH 2011 18
Policies to Advance
Transparency
 Prohibit gag clauses
 Require participation in all-payer
databases; provide funding
 Allow “qualified entities” to sell
data and analyses
 Standardize measures of cost
and quality

19. ©PBGH 2011 19
Why providers should start now
Consumer expectations
Purchaser expectations
 High-value providers will be
the winners – increased
volume

20. About North Shore-LIJ
•17 facilities
•4,507 beds
•673,524 ED visits
•254,700+ inpatient admissions
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21. $17M
$150M
Drivers of Transparency at North Shore-LIJ
1. New York Public Health Law, passed in 2002
2. Large Uninsured Population
3. Increased Patient Financial Responsibility
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22. Strategy 1: Call Center
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Created collection agency to reduce costs imposed by third-party agencies
Segregated 3rd-party billing and integrated self-pay billing
Led to a call center very familiar with the uninsured—an evolution from a collection agency to a help center.

23. Strategy 1: Call Center
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Best Practices
Form unit for patients with financial assistance policy
Follow script to ensure consistent communication,
Aggregate functions with regard to payment and billing

24. Strategy 2: Patient Tools
•Patient Financial Assistance Programs
•“Understand Your Bill”
•Make a Payment
•Hospital Insurance Plans
•Estimate Your Personal Expense –Calculator
•Submit an Insurance Claim
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Tools on NorthShoreLIJ.com

25. Spotlight On: Cost Estimator
Patients care about what they can expect to pay out of pocket.
The estimates arepresented as ranges rather than a single number.
Next step: Bundling related procedures often done in tandem
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26. Why Our Patient Tools Work
We’ve expanded the call center to handle questions about the price estimator.
The rundown includes what insurance coverage is expected to pay and what the deductible is expected to be.
The financial assistance phone number is available when an estimate is not available via the web-based tool.
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North Shore-LIJ has received 10,000inquiries about price.

27. Next Steps for LIJ
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Address government requirements to post chargemaster
Competitive Pricing
Move to complete price transparency in 5 years

28. Amovementtoempowerconsumerswithinteractivetoolsandinformationsothattheycanchooseprovidersandtreatmentoptionsinamoreinformed, convenient,andvalue-drivenway.
What is transparency?

29. Affordable care options exist today
Shoulder arthroscopy
In Dallas
$3,000
to
$26,000
In Seattle
$2,000 to $18,000
In Boston
$4,000 to $22,000

30. 50%
Lower Cost
Higher Quality Adherence
No correlation between cost and quality

31. web- based tools
Where can we go for answers?
wellness initiatives
health assessment
DM programs

32. Are we ready for Health-azon?

33. The information consumers value
cost
quality
convenience
social

34. Poll Question #2
How often do YOU (as a patient) inquire/educate yourself about cost before receiving or seeking medical treatment or care?
•Never
•Rarely
•Sometimes
•Often
•Every time
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35. Shopping tools do work…
Gallbladder Removal
Inpatient
Outpatient
Surgical
$19,102
$11,107
$6,360
Cost Estimator users choose
Non-users choose
Average Cost
Least expensive
Most expensive
41%
55%
10%
70%
20%
4%
(2 year period of regional health plan’s claims history)

36. … when they are used
Inpatient
Outpatient
Surgical
$19,102
$11,107
$6,360
Average Cost
Least expensive
Most expensive
$10,319
Average Cost for Cost Estimatorusers
$14,195
Average Cost for Non-users
Gallbladder Removal
(2 year period of regional health plan’s claims history)

38. Proactive campaigns
Analysis and engagement
Conveniences
Take engagement and design to the next level

39. Q&A
Bill Kramer
Executive Director, National Health Policy
Pacific Business Group on Health
San Francisco, Calif.
Robert Shapiro
ChiefFinancial Officer
North Shore —LIJ Health System
Long Island, N.Y.
BrodieDychinco
Vice President of Strategy
HealthSparq
Portland, Oregon
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