Consumers will have new tools for finding out what a trip to the doctor will cost before they take it, thanks to two bills passed by Washington lawmakers.
One will require insurance companies to provide customers with a tool for doing cost- and quality-comparison shopping, while the other creates a public, statewide database with information on quality, but limited price data.
Medical procedures can cost hundreds or thousands of dollars more at one clinic or hospital than another, but most people don’t realize there’s a huge disparity in price, or know how to find that information. Transparency advocates hope that if people easily can compare the prices of everything from a hip replacement to open-heart surgery, they’ll opt for the less expensive option, ultimately driving down medical costs.
“Your goal is to change people’s behavior. You want to show them this is what things cost,” said Sen. Mark Mullet, D-Issaquah. “People will start to be more engaged, and shop on price. It’s the only sector of the economy where people don’t know what things cost until they do the procedure.”
Some, but not all, insurance companies already have price searches on their websites, but they can be difficult to find and have information for a very limited number of procedures. They also don’t always provide quality information alongside costs — an important consideration when someone is putting their life in a doctor’s care.
Mullet sponsored Senate Bill 6228, which requires insurance companies to provide their customers with a cost- and quality-comparison tool. The measure, which Gov. Jay Inslee says he’ll sign, requires companies to feature the tool on their customers’ homepage and build a comparison app for cell phones and other devices.
Some people have asked if price information becomes more widely available, won’t the cheaper doctors just raise their prices to match more costly providers? Mullet expects the opposite.
“The people who are more expensive are the ones who come under pressure,” he said.
The measure also tackles the matter of how to determine which doctors or facilities provide the best care. It creates a committee that will come up with metrics for measuring quality. That could include data on patient safety, how well a provider manages someone with chronic health conditions such as diabetes or heart disease, and the use of screenings and other strategies for preventing disease.
At the end of the year, the group will report on the best ways of collecting and sharing that information. Some of this data already are collected by the Washington Health Alliance, and the new group is expected to build on that work.
It was down to the final hours of the legislative session for House Bill 2572, a measure that creates a database of provide cost and quality information about doctors, clinics and hospitals around the state. The bill also has provisions for improving mental-health services for low-income residents and for taking action on a plan to reduce health-care costs in the state.
The original proposal, which was requested by Inslee and sponsored by Rep. Eileen Cody, D-Seattle, had support from hospitals, doctors, a patient advocacy group, a tribal representative, and business interests including the conservative National Federation of Independent Business. But the database provision hit a wall with the state’s two largest insurance companies: Premera Blue Cross and Regence Blue Shield.
Companies such as Premera and Regence negotiate the rates that they pay hospitals and doctors, and that information is considered proprietary. The companies objected to sharing this information with the state in order to create a database of medical costs. They also raised security concerns about patient privacy.
They countered that they supported transparency, but not in the form of a statewide database, called an All-Payer Claims Database. At least 11 states have these databases and many others are pursuing them, but the insurance companies challenged that they’re not working as planned.
“There is quite a bit of transparency in the private sector today,” said Eric Earling, a Premera spokesman. “The promise of the All-Payer Claims Database sounds nice, but the reality is that they’re not able to achieve their stated goals.”
The bill that lawmakers ultimately passed stripped out the requirement that Premera, Regence and other insurance companies share their cost information. It still creates a database, but is limited to the health-care prices paid by plans covering state employees and Medicaid. Large companies such as Boeing and Microsoft who self-insure could voluntarily share their cost data.
Chris Bandoli, lobbyist for Regence, said Thursday the company was “generally supportive” of the revised legislation. Earling said Premera had “no objection to the state pursuing a payer database for their health care purchasing.”
The governor’s office was largely satisfied as well.
“It’s probably 80 percent of what we asked for,” said Bob Crittenden, Inslee’s health policy adviser, later Thursday evening. “In this business, that’s pretty good.”
Even before the legislative session, the state had been taking steps toward bringing transparency to medical costs and quality.
Officials with the Washington Health Care Authority, the agency overseeing Medicaid, announced last fall that it had received a 2-year, $3.4 million federal grant to work on a cost and performance database. And in December, the state released its lengthy Washington State Health Care Innovation Plan, which highlights transparency as a key strategy for controlling health-care costs.
Mary McWilliams, executive director of Washington Health Alliance, said the lawmakers made a “major policy decision to establish an All-Payer Claims Database as a community asset.”
She said the database would be an important tool not only for individual consumers, but also for businesses providing health insurance for their employees.
Crittenden said he expects to keep meeting with the insurance companies to try to address their concerns.
“Sometimes you have to bite the apple twice,” he said. “Making the progress we’ve made, we’re on the way.”