Report on Treatment Cost Variation

[Guest guest]

FYI, for those who might be interested

From _http://www.hcbd.biz/story.aspx?id=30645_

(http://www.hcbd.biz/story.aspx?id=30645)

(selected snippets for brevity)

Treatment Cost Variation Responsible for $36 Billion in Healthcare Waste

According to Thomson Reuters Report

ANN ARBOR, Mich., Feb. 28, 2012 /PRNewswire/ -- Price variation for

common medical procedures costs Americans with employer-sponsored insurance as

much as $36 billion a year, according to a white paper published today by

Thomson Reuters.

The report uses claims data for Americans with employer-sponsored

insurance to analyze variation in prices nationwide for a set of 300

" shoppable "

procedures (high-volume procedures that consumers would plan for and schedule

in advance, such as a mammogram, knee replacement or MRI). It finds prices

in some markets that were two-to-three times higher than the median price

for the same procedure. The paper also suggests best practices for

implementing successful price transparency initiatives to combat this wide

variance

in cost.

Key findings include the following:

· $36 Billion in Savings: By reducing prices for 300 common

procedures to their median price nationwide, total employer medical expenses

would be reduced by 3.5 percent, or $36 billion annually, for the 108

million Americans under 65 who receive insurance through their employer.

· Site of Service Matters: A major driver of price variation is

site of service; prices vary significantly by care setting and the

percentage of services done in the hospital verses an office setting.

· No Correlation Between Price and Quality: A review of published

literature tracking the relationship between price and quality of care

reveals no positive correlation. In fact, lower-priced hospitals are often

associated with high quality scores.

· Best Practices to Reduce Price Variation Waste: The central

ingredients to achieving potential cost savings are benefit designs that

incentivize healthcare consumerism, access to provider-specific price and

quality information, estimates that summarize all costs associated with a

service

(hospital, physician and ancillary fees) and calculating out-of-pocket

costs using benefit information to personalize.

· Price Transparency Legislation in Play: Currently, 34 states

require reporting of hospital charges or reimbursement rates and another

seven have established a forum for voluntary price reporting. The State of

California recently passed legislation that prohibits any contractual

provisions between providers and health plans that limit price transparency.

Full Document Link

_http://thomsonreuters.com/content/healthcare/pdf/white_papers/health_plan_p

rice_transparency_

(http://thomsonreuters.com/content/healthcare/pdf/white_papers/health_plan_price\

_transparency)

Regards,

Dee

Dee Daley, PT, DPT

WorkWell Systems

New Ipswich, NH