A reminder that not everyone loves more transparency for health-care prices

Welcome to Health Reform Watch, Jason Millman's regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Jason with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, or sign up here to receive it straight from your inbox. Read previous columns here.

SEATTLE— There's been a lot written recently about efforts to make health-care pricing more transparent. Here's an example of one that's failed, though.

I went to Seattle this month with other D.C.-based health reporters through a Kaiser Media Fellowship to examine the state of health care in Washington. The most frequent topic of discussion during the trip was Washington state's relatively successful Obamacare health insurance exchange and the challenges it still faces. A close second, though, was the defeat of legislation that would have greatly expanded health-care price transparency in the state.

One high-profile bill would have created a database in Washington state that basically would have required insurers to disclose what they're paying for health care services based on where care is provided. The all-payers claim database, as its known, would in theory allow consumers to compare the quality and cost of health-care services, by procedure and by hospital, to determine their best options for care.

These databases aren't everywhere in the country, but they're starting to catch on. Eleven states have set up these kinds of databases, and another five states are actively working to set them up, according to the APCD Council, a group helping states to  these databases in place. Nationwide adoption of the databases could save up to $55 billion over a decade, according to a study published last month, but there's a big debate about how effective they can be.


(Credit: APCD Council, a collaboration between the University of New Hampshire and the National Association of Health Data Organizations)

But legislation in Washington state to create the database failed — according to pretty much everyone we talked to — because of the strong opposition from the state's largest private insurer, Premera Blue Cross. The company lobbied hard to defeat the effort, which had broad support from the health-care industry, employers and competing insurers. Critics of Premera said the insurer has a strong business interest to keep the cost information under its control.

"They go to people and tell them you got the best deal," said Ron Sims, the incoming chairman of the state's health exchange board. "What happens when all of the sudden ... you're able to compare who had the best deal? That really alters your business model. Transparency isn't to their benefit at the moment, which is why all the other plans want transparency."

Premera executives we met with said they favor transparency and have taken steps to provide their own members with cost and quality information. But they questioned the usefulness of the all-payer claims database if it's not coupled with information about what consumers would actually pay under their insurance plans. Premera vice president Rich Maturi also questioned whether a consumer would actually use the database to pick an insurance plan based on the cost of a certain procedure.

"We have not seen evidence they're ready for that level of shopping," he said.

Washington state supporters of the database aren't giving up the effort, which has created some unusual alliances. The state chapter of the National Federation of Independent Business — the national chapter, you'll remember, challenged Obamacare at the Supreme Court in 2012 — testified in favor of the database this year. "We're now the closest of buddies on this issue," said Bob Crittenden, the top health policy advisor to Gov. Jay Inslee (D).

"Because they're going to be hammered with health-care costs, they're seeing this as a primary issue," Crittenden added.

Top health policy reads from around the Web:

Medicare to penalize hospitals for their mistakes. "A quarter of the nation’s hospitals – those with the worst rates – will lose 1 percent of every Medicare payment for a year starting in October. In April, federal officials released a preliminary analysis of which hospitals would be assessed, identifying 761. When Medicare sets final penalties later this year, that list may change because the government will be looking at performance over a longer period than it used to calculate the draft penalties. The sanctions, estimated to total $330 million over a year, kick in at a time when most infections measured in hospitals are on the decline, but still too common." Jordan Rau in Kaiser Health News.

Health insurers push back against drug costs. "In dealing with health plans, drug companies are facing a new imperative — bargain or be banned. Determined to slow the rapid rise in drug prices, more health plans are refusing to cover certain drugs unless the companies charge less for them. The strategy appears to be getting pharmaceutical makers to compete on price." Andrew Pollock in the New York Times.

How a Republican Senate might attack Obamacare. "Full repeal might be a fantasy, but with total control of Congress the GOP might be able to chalk up some real policy wins against the Affordable Care Act, and the first targets are already coming into view. ... Winning the Senate and keeping the House would also have some risks for the GOP. It would step up the pressure to prioritize bills that Obama might sign, without disappointing conservatives who don't want to see the party accept Obamacare as the status quo. And it would bring into sharper relief the constant question of whether Republicans should advance their own health care plans." Sam Baker in National Journal.

Jason Millman covers all things health policy, with a focus on Obamacare implementation. He previously covered health policy for Politico.
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