Study Suggests Plan Transparency Doesn’t Reduce Costs

Original post

“Transparency” and “choice” are keywords associated with health plan consumers these days. But there’s no guarantee those key words will lead to the keyword phrase “lower health plan costs.”

One survey of the employees of two large employers reports that, given transparency and choice, plan members did not reduce their costs, and even increased them a bit.

As reported in the Journal of the American Medical Association, a Harvard-led study of plan member choices showed that when employees spent more time reviewing plan options, they did not necessarily choose a cheaper plan. The study compared two groups of employees — one with a plan that included a price transparency/comparison tool, and another that did not.

The end result: The group with the transparency tool at its disposal spent slightly more (about  $59 per member) on a plan in 2012 than in 2011. The control group with no tool spent about $18 more.

However, the study included a big caveat: “Only a small percentage of eligible employees” used the tool.

Such studies can offer some value to the overall discussion of reducing health costs. However, this study’s small focus (employees of two companies), when it took place (before comparison tools had truly entered the health plan lexicon), and the relatively few folks who used it, probably suggests that perhaps it could be used as the starting point for a broader study based upon more recent data.

HR align benefits with business objectives

Originally posted September 24, 2013 by Jennifer Paterson on

Reward and HR professionals are taking steps to ensure that the benefits they offer support the objectives of their organisation, according to research by the Chartered Institute of Personnel and Development (CIPD).

Its Aligning strategy and benefits survey, which is based on responses from 444 organisations, found there is also a strong correlation between workplace outcomes and transparency in employee benefits.

Organizations that prefer to be more transparent about their benefits schemes are more likely to have good employee relations, increased productivity rates, lower absenteeism, good employee retention and low pay discontent.

The research also found that, where respondents’ workforce comprised mostly graduates, there is a higher level of membership in defined contribution pension plans.

Charles Cotton (pictured), reward adviser at the CIPD, said: “HR professionals continually have to ensure that the reward provisions they offer in the workplace are in keeping with the shifting nature of work, and are aligned to both the needs of business and employees and integrated with other aspects of people management strategy.

“Failure to do so will result in inappropriate achievements, skills and behaviours being rewarded and recognised.

“What our research helps to illustrate is that HR [professionals] are not adopting benefits for the sake of it, but are choosing those that match what the firm is trying to achieve. It also shows the impact that employee benefits can have in the workplace in terms of employee retention, absence, productivity and relations.”

Most States Fail Transparency Scorecard

Original article

Thirty-six of the nation's 50 states received either a "D" or an "F" in a report card, issued by two nonprofit organizations, measuring the strength of health care price transparency laws.

"We know from studies that the price for an identical health care procedure performed in the same city can vary by as much as 700%, with no difference in quality," said Francois de Brantes, executive director of Health Care Incentives Improvement Initiative, or HCI3. "When consumers shop for value, they can help rein in health care costs; but to do this, they first need timely and actionable price information."

Burden placed on consumer

The report card, developed by Catalyst for Payment Reform and HCI3, examined multiple factors in arriving at a 100-point scale.

Those factors include levels of price transparency such as:

* Pricing information reported to the state only.

* Pricing information available upon request by an individual consumer.

* Pricing information available in a public report.

* Pricing information available via a public website.

The report card also measured scoring criteria by scope, including:

* Scope of price, including charges, average charge, amount paid by the insurer and amount paid by the consumer (allowed amount).

* Scope of services covered under the law, including all medical services, inpatient services only, outpatient services only, or the most common inpatient and outpatient services.

* Scope of providers affected by the law, including hospitals, physicians and surgical centers.

The groups calculated a score for each level separately and then factored a sum for a total score out of 100 possible points. Every state received a cumulative additive score, taking into account all relevant laws passed in that state. Thus, grades do not reflect individual statutes or bills, but rather each state's overall legislative effort toward price transparency for health care.

The sponsors of the report say the majority of states have very basic laws requiring average charges to be made public, but charges do not reflect what consumers, employers and health plans actually end up paying for care. In many cases, the information is only available upon request, placing a considerable burden on the consumer.

States have duty to protect

"It should be concerning to every lawmaker in the country that 18% of the U.S. economy is shrouded in mystery," de Brantes said. "Without price information, how can we possibly expect consumers to act in a value-conscious way? It is a duty of every state to protect its residents from unfair trade practices, and healthcare consumers are, for the most part, completely left to fend for themselves."


This story originally appeared in Health Data Management, a SourceMedia publication.