Bush Demands Data on Price, Quality of Care

Federal government initiatives don’t usually jump to mind in the category of innovative thinking. But even if Washington is following the private sector, its sheer heft makes a difference when it jumps onto an issue.

This might be the case for President Bush’s executive order instructing four government agencies, including the Center for Medicare and Medicaid Services, to provide health care price and quality information to beneficiaries. The instruction also compels them to improve health information technology systems and make them work together to produce more transparency into quality of care and pricing.

In addition to Medicare and Medicaid recipients, the plan participants covered by the order are those in the Departments of Defense and Veterans Affairs and the Office of Personnel Management. Together, they represent about 25 percent of the health insurance market. Some of the information also will be available to the public.

With the president demanding more price and quality data, businesses may follow suit in their contracts with health providers.

“These things are already happening without a government mandate, but they will be further encouraged with the executive order,” says Katie Mahoney, manager of health care policy at the U.S. Chamber of Commerce.

One of the major health care providers, Aetna, is already offering price and quality information to its plan participants in select markets. The company is confident that other providers will do the same.

“This will be embedded. This will be a way of doing business,” says Robin Downey, head of product development at Aetna.

The business community embraced Bush’s move because it gives momentum to consumer-driven health care. Proponents of consumer-driven health say the success of such plans hinges on the ability of individuals to save money by making decisions based on price and quality.

“You might see more companies willing to make this the (only) type of health plan they offer rather than just a choice,” says Ted Nussbaum, head of group and health care consulting with Watson Wyatt North America.

The key to price transparency is to get providers to divulge the dollars and cents they paid, which they often see as a competitive advantage. “The challenge for the private sector will be to have price disclosed as opposed to cost,” Nussbaum says.

On the quality side, there likely will have to be much give-and-take among interest groups as they grapple with definitions of quality care.

Two organizations—the Ambulatory Care Quality Alliance (AQA) and the Hospital Quality Alliance—have brought businesses and health providers together to work on benchmarks.

“Having the government say, ‘We’re going to do this (price and quality transparency)’ makes it all the more urgent for hospitals and doctors to work with HQA and AQA to come up with consensus measurements,” says Steven Wojcik, vice president of public policy for the National Business Group on Health.

Seattle might be one community that takes the lead in the transparency process because of interest from major employers in the area, says Maria Ghazal, director of public policy at the Business Roundtable, an association of CEOs of large corporations.

The enthusiasm is shared by corporations throughout the country. “Our CEOs have been pushing for a year now for greater transparency in the health care system,” Ghazal says.

—Mark Schoeff Jr.