Healthcare Price Transparency: A Look at Aetna’s Web-Based Tool

 

Illustration source: Vermont Health Connect, Vermont.gov

Would you look at comparative price information for procedures like an MRI, sleep study, or colonoscopy before you selected where to have a procedure done? Would you like to have fewer surprises on what you will pay before you go in for these procedures? Price transparency in health care has been a rallying cry, from many policymakers, elected officials, and journalists. It’s one strategy among many that many back as a way to get health care spending down and also offer consumers choice.

Many view healthcare as a market that can bring costs down when competition and comparison-shopping are in play. Others want transparent prices so consumers face no surprises before getting an astronomical bill. In both examples, the onus is on the public to choose wisely and economically.

In today’s post, I review a study of Aetna’s price transparency tool for outpatient procedures, including radiology, sleep, and cataract surgery reported in the Oct. 24 JAMA Internal Medicine led by Anna D. Sinaiko, PhD, MPP, from the Department of Health Policy and Management at Harvard University’s T.H. Chan School of Public Health. This study was slated to appear here earlier, but the election madness delayed it.

Aetna’s Member Payment Estimator for Eight Elective Procedures

Aetna developed a web-based Member Payment Estimator with the idea that patients would select care based on cost to them. It shared the tool with 94% of Aetna enrollees across the United States, but in this study, it reports just a 3.5% pick-up in using the tool. 

In the study, researchers used administrative enrollment and medical claims data to review whether enrollees aged 19 to 64 who underwent one of eight different procedures reviewed price comparison data provided by episode. The eight procedures in the study were carpal tunnel release, cataract removal, colonoscopy, echocardiogram, mammogram, several MRI and computed tomography procedures, sleep studies, and upper endoscopy procedures during the period 2010 to 2012.

“The way the web-based tool works is it adjudicates claims as if you are having the procedure in real time, factoring in your specific health insurance information (e.g. deductible, copays, age and gender), so that you can see your out-of-pocket costs at ten facilities in your geographic area of residence,” said Dr. Sinaiko, in an interview with PatientPOV. “This reflects the patient’s price information in advance of receiving care.” Results were only examined within geographic areas, not across those areas.”

How Aetna’s Member Payment Estimator Was Used

Besides finding that use was just 3.5% overall, these findings are interesting:

  • Of those who did review prices prior to selecting where to get their procedure, this group did choose facilities with lower relative price estimates, in the 46th percentile in the market versus the 54th percentile in comparison groups.
  • Of the eight procedures, MRIs, CT scans, and sleep studies were the only procedures where searching price information was associated with lower spending of $131.40 (12%) (P<.001) for imaging and $103.50 (6%) (P=0.06) for sleep studies.
  • In a related paper that Dr. Sinaiko published in Health Affairs, she reported that younger patients and those with high deductibles were the most likely users of the search tool.

Dr. Sinaiko acknowledged that sharing cost information with the public is new and that “efforts to engage patients are a work in progress.” What she recommends is “more targeted outreach at the time when the decision on where to go for care is most salient.” Web-based tools like Aetna’s are likely only to be of interest for certain elective procedures and not for emergent or urgent medical problems, she added.

The Value of Transparency

Health authorities of varying political stripes are pressing for more transparency tools. It’s clear that Stephen Brill, who wrote a high-profile article in Time questioning healthcare prices, led to a public outcry for transparency. Then, others clearly view healthcare as a market that works like buying a car. So, give people the tools to choose, and perhaps they will vote for value and lower cost.

Charles Ornstein, ProPublica says: “ProPublica has been building its data tools to allow consumers and patients to compare doctors on how they practice medicine, prescribe drugs, and interact with the medical device and pharmaceutical industry.”

Yet numerous studies point to significant resistance to going for cheaper care, particularly among the well insured. Many Americans see higher costs as a proxy for better quality. While Aetna identified facilities in their high-quality network in their tool, the information shared is extremely limited and the public might be skeptical of insurer-generated quality information.

The American public will want ways to assess quality, but quality measures are in their infancy and poorly understood by most Americans. Also, costs of care may only matter for a limited number of procedures. As this study revealed, a miniscule number of Aetna enrollees considered where to get cataract surgery based on their out-of-pocket costs.

But with the recent news that healthcare premiums will rise on average about 25% in 2017, the public might have more incentive to review prices and they are bound to be pushed to look at dollars of their care or pay more.Price transparency strategies are but one approach being promoted to control costs of care. Another approach is value-based insurance design, that aims to align patients’ out of pocket costs with the value of services (evidence of benefit, etc.). PatientPOV.org will take these up in subsequent posts.

 

 

 

 

 

 

Delay of Generics Hurts Consumer,
Taxpayer Wallets, and Patient Health

 

Credit: Federal Trade Commission, downloaded March 21, 2013

Credit: Federal Trade Commission, downloaded March 21, 2013

To insure patent extensions of high-priced, blockbuster drugs, brand-name drug companies frequently pay generic drug manufacturers to stay out of the market. It makes cheaper, more affordable generic unavailable for years. The strategy is referred to as “Pay for Delay.” The Federal Trade Commission has lots of information on this problem and its legality comes before the Supreme Court this summer. The case is Federal Trade Commission v. Watson Pharmaceuticals.

GUEST POST by Wells Wilkinson, JD, Staff Attorney, Community Catalyst

Wells Wilkinson, JD, Staff Attorney, Community Catalyst, originally wrote the post below, for Postscript, a blog of Community Catalyst’s. Community Catalyst is a national advocacy organization, has been giving consumers a voice in health care reform for more than a decade.  It provides leadership and support to state and local consumer organizations, policymakers and foundations that are working to guarantee access to high-quality, affordable health care for everyone. You can follow Community Catalyst on twitter at PostScriptRx.

This spring, the U.S. Supreme Court will decide whether the increasingly frequent practice of brand-name drug companies paying off their competitors to keep new generics off the market is a violation of antitrust law. As former Federal Trade Commission(FTC) attorney David Balto told Politico: “There’s no other case that can have as much impact on reducing health care costs.”

This practice, called “pay-for-delay,” has skyrocketed since an appeals court decision allowed the first such deal in 2005. Since then, over a hundred pay-for-delay deals have delayed generic versions of 20 to 30 brand-name drugs each year, according to federal regulators at FTC.

There is no question delaying access to generic drugs harms consumers. That’s why Community Catalyst has helped consumers and advocacy organizations join legal challenges to pay-for-delay deals that blocked consumer access to generics of Provigil, K-Dur and Tamoxifen for years. We have also filed or joined Amicus briefs, and organized national and state-based advocates calling on Congress to ban pay-for-delay agreements.

Recently, Politico ran another story about how one defendant drug-maker in the case (Solvay Pharmaceutical) claimed that these pay-for-delay agreements don’t harm consumers, a position echoed by the generic drug industry’s trade group GPhA. But the FTC, U.S. Department of Justice, Attorneys-General in 36 states and consumer advocates all disagree. Why? Because access to generic drugs brings big savings for consumers and health plans. Look at GPhA’s own data that estimates access to generic drugs has saved consumers and our health care system more than $1 trillion from 2002 to 2011. That’s because generics cost one-fifth to one-tenth as much as brand-name drugs.

How the System’s Supposed to Work

Traditionally, generic drug companies wait for the patent on a brand-name drug’s active ingredient to expire and then file an application with the FDA to bring the generic version of the drug to market. Then the brand-name drug company sues the generic drug company, claiming some “patent infringement.” But in nearly all cases, the drug itself is off-patent. So the infringement is of a “secondary” or “defensive” patent that addresses some minor detail, like how the drug is formulated into a pill, or some step in the manufacturing process. The generic drug company then defends themselves from the litigation, and if they win, they launch their generic right away.

How Pay-for-Delay Deals Broke the System

Since 2005, generic and “BigPharma” companies have decided to do what the federal and state anti-trust regulators see as collusion. During litigation, the brand-name drug company offers to settle the patent infringement lawsuit they filed by paying tens or even hundreds of millions to the generic company, which then agrees to not to start selling a generic for several years. Pay-for-delay settlements are very suspicious, not only because they are made in secret but also because the payments are going the wrong way. Usually the patent-infringer is forced to pay if they violate someone else’s patent. But in these pay-for-delay settlements, these roles are reversed.

For example, Bayer sued four generic manufacturers, saying, in essence: You have infringed the patent on our blockbuster drug Cipro. To show you how angry we are, we will pay you 400 million dollars. But only if you stay off the market.

As a result, consumers did not have a generic version of the antibiotic Cipro for another seven years, while Bayer made billions in unfair profits. Overall, these so-called settlements have caused consumers and their health plans to pay tens of billions right into the pockets of the brand-name drug companies. This creates a powerful incentive to collude and delay competition as long as possible. For the millions who are underinsured, delaying a generic can force patients to pay thousands of dollars a year, or go without needed medicine.

One story we collected from a consumer from Kansas describes his struggle to afford Provigil, whose generic was delayed from 2006 to 2011 by pay for delay. He reported: “[Despite] paying almost $17,000 in annual premiums for my family [health insurance plan] last year, I was paying around$650/month [for Provigil]… That is out of pocket money I have to come up with until later in the year when I reach my deductible [sic] and I can enjoy a few months of only paying $60/month. I cannot describe to you how much stress and difficulty this has caused for me and my family the last several years…”

The real question is whether the high court will allow these secret deals and legal maneuverings to continue? Or will it restore legitimate competition to this market, lowering health care costs and ensuring better access to affordable medicines for all Americans?

Stay tuned. We will be blogging regularly about this case as it unfolds and calling attention to how pay-for-delay deals harm consumers and increase the cost of health care.

Pre-ACA, Insured Face Exorbitant Costs.
With Accountable Care Act, People Will See Caps, Save $$

Vast numbers of Americans do not understand how the Affordable Care Act will make their expenditures for healthcare a heck of a lot more affordable. I am talking about the 80% of American voters who have insurance now, who misguidedly think it has them covered. Medical bankruptcies are up and they are happening to people like you and me because of unanticipated, unaffordable health expenses.

This week, I am sending money to a friend with breast cancer who has four children and insurance. Her friends are planning a fundraiser. She has had 6 surgeries and she can’t keep up.  She’s got breast care drugs that she cannot afford and no lifetime or yearly caps. I know someone else who delayed investigating a breast lump because she had to get herself insurance first. Now she’s stage IV and providers are after her daily for $$.

It’s not just cancer, although it is the first thing that often comes to mind. It’s mental health care that is not available for many Americans. It is what happens when someone suddenly has a debilitating stroke or progressive illness, or becomes disabled. Or drugs for HIV that suddenly become cut from the federal budget and thousands of HIV-positive Americans are without drugs. Annual and  lifetime caps, an end to pre-existing conditions, and insurance exchanges, and so much more,  have to be made plain to everyone.

It’s time to step up sharing specific examples of how people fare pre-ACA versus post-.  We need to move beyond generalities and intangibles to real-life hardships.  Social Security and Medicare, also faced early challenges and a skeptical public. I hope to share more stories here of real people who are going broke, barely staying alive because of current health policies. Many are insured, but can’t keep up.

If you are bored and feel like you have heard these vignettes many times before, make a contribution for the public good: try these real-life stories out on people who think catastrophic expenses could not happen to them. There are thousands more stories like this. Sadly, it is not unlike the AIDS Quilt.

We are in a precarious period. I urge you to get angry and seek out these stories. You won’t need to look too far. Get these stories around. RT them, tell them at parties. Let’s be sure the Affordable Care Act and all its essential public health infrastructure stand.

If you’ve got a story to tell, share it in the comments. If it’s too long, write me at “patientpov” at “gmail dot com.”