In my July letter, I talked about data being the key to increasing health care value. I mentioned the Hospital Price Transparency Study from the RAND Corporation that used data from self-funded employers and health plans in Wisconsin.
On September 24, BHCG, The Alliance and Wisconsin Manufacturers & Commerce were presenting sponsors (joined by co-sponsors Aon, Fond du Lac Area Businesses on Health, Hays Companies and Lockton Companies) of two virtual events when more than 325 employers, providers, brokers/consultants, other stakeholders and the media heard about the latest RAND study – RAND 3.0. The results were presented by Christopher Whaley, Policy Researcher at RAND Corporation, and event panelists discussed the implications of the results for Wisconsin and the country.
Wisconsin in Top Ten of Most Expensive States
The RAND project is a purchaser-led initiative that uses claims data to compare and publicly report hospital prices – not billed charges, but the prices we actually pay. The study, based on substantial claims data from 2017 and 2018, revealed prices employers and their employees paid for hospital care in Wisconsin were nearly three times what Medicare would have paid for the same services – putting our state in the top ten of the most expensive states in the country.
Using the same claims database, the study also showed prices paid for professional services in Wisconsin were more than 330 percent of what Medicare paid for the same services, making Wisconsin the third most expensive state in the country. The study’s supplemental tables detailed relative and standardized prices for individual hospitals in 49 states.
These results make it evident that quality and cost transparency is more critical than ever at this time when health care is simply unaffordable for many employers and employees who must share the cost burden. The ever-increasing amount spent on health care by employers reduces other investments made for workers. Critical priorities such as higher wages and expanded benefits, training, and safety investments all take a hit as health care costs continue to grow.
A Call to Action
With this evidence in hand, we are calling on all health care stakeholders to join us in our quest to improve health care value in Wisconsin. We urge employers to submit their claims data for RAND 4.0 (which is a relatively easy process), join their regional health care employer coalitions and engage with other quality and cost transparency initiatives (e.g., Wisconsin Health Information Organization, Wisconsin Collaborative for Health Care Quality). Lastly, as significant health care payers, employers can use benefit plan and payment design to reward physicians and hospitals for providing high quality and low cost care.
We are asking providers and health systems to work toward greater cost efficiency, collaborating with employers and health plans to meet the shared goals of affordability and price transparency. Health plans can facilitate this evolution through greater data sharing, value-based contracting strategies and elimination of the barriers to positive change.
The broker and consultant community can also play an important role to bring about change by encouraging their clients to participate in RAND 4.0 and assisting them in meeting their fiduciary responsibilities through their efforts to improve health care value in their communities.
The Journey Continues – BHCG-GNS Healthcare Physician Value Study 2.0
As mentioned in previous editions of this newsletter, late last year, our organization, with support from the Greater Milwaukee Business Foundation on Health, funded a study to assess the quality and cost of physician services throughout the state of Wisconsin. Presently, BHCG is working again with GNS Healthcare to produce the second iteration of this report. Watch for these results in early 2021.
Please do not hesitate to contact me if you have questions or want more information about participating in any or all of our efforts to improve health care value. I can be reached at 262-875-3312 x1 or jkluever@BHCGWI.org. Please stay safe and well.