Value-based care isn't yet scaling, but price transparency could bring about widespread value-based competition, Trilliant Health CEO Hal Andrews says.
The healthcare analytics company launched a price transparency analytics tool March 27, matching information from its provider directory to payer price transparency data. The data allows providers and payers to see what other providers are getting paid for the same services.
Mr. Andrews sat down with Becker's to explain how this kind of analytics can bring an end to "information asymmetry" between payers and providers.
"Historically, payers had all the data and health systems and the physicians were just begging for higher rates. Nobody could actually build an analysis of what the mix of quality and cost is," Mr. Andrews said.
"Now, you're about to have the ability to see that some people who are getting paid the highest rate do the same amount of volume as another provider, but that other provider has better quality," he added.
Comparing negotiated rates and quality outcomes across providers in a market could bring about a shift from value-based care to value-based competition between providers, Mr. Andrews said.
"Value-based care is something that we've talked about in the country for a long time, but it has never worked at scale anywhere," Mr. Andrews said.
Value-based care is a "point solution," Mr. Andrews said, but widespread competition on quality has the potential to go further to solve cost challenges.
It may take two, three or five years for providers to adopt this kind of data, but eventually the best value for particular services in a market will emerge.
"There'll be markets where the best value for orthopedics is one provider, the best value for heart surgery is another provider, and the best value for imaging is a third provider," he said. "What that unlocks for health plans — but really employers, who are really the ones underwriting the commercial insurance — it gives them the chance to educate their employees about making consumer-driven choices."
The challenges ahead
The sheer size of price transparency data means anyone trying to unpack it needs massive amounts of storage and processing power, Mr. Andrews said.
"I know a couple of health systems thought they might do this themselves," Mr. Andrews said. "My guess is that it's going to cost over a million dollars a year just to store the data. Not to analyze it, not to process it, just to put it on the shelf."
Trilliant's price transparency service can be useful for most payers and providers, Mr. Andrews said, aside from critical access hospitals that have different reimbursement focuses.
"I think the advantage will be to those who start to use it first," he said. "How will it all unfold? I have no idea. It will probably be bumpy, it will be chaotic. We'll certainly have a couple of stages of Kübler-Ross. I think denial is already in the water table. I think there's going to be some anger, and then some bargaining, pretty quickly, and then we'll be able to get to the final stage of acceptance."
"The American consumer should be able to pick based on value. We've never been able to pick on value. We can pick on convenience, we can pick on somebody else's network design, but we've never been able to connect that cost to the service to the value of the service, and that's the big opportunity."