Cost Transparency Essential to Value-Based Care

Cost transparency could change how providers, payers, and patients think about healthcare. Just last week, the Centers for Medicare & Medicaid Services (CMS) reported information regarding how much physicians earn in Medicare reimbursements. This news comes nearly a year after CMS released details which disclosed what hospitals charge and what Medicare pays them for common inpatient and outpatient procedures.

Costs of care aren’t the only focus of transparency, though one University of Chicago study found there was a 7% reduction in the cost of elective procedures when providers were forced to reveal their prices. Data on physician performance allows consumers to make smart choices when comparing the quality of care of different providers.

Daniel Moncher, CFO at Firelands Regional Medical Center in Ohio, says his hospital is considering the implications of cost containment in the evolving healthcare environment, especially as care shifts from a fee-for-service model to a pay-for-performance model.

"The key to success is going to be cost containment,” said Mr Moncher. “We've always been a very cost-conscious organization, and we will be even more so. Not obsessive, but it is definitely something that will be top of mind, and we'll be scrutinizing everything, such as staffing requests, business opportunities, supply costs, and overhead costs. We'll be trying to lower our costs as effectively and systematically as we can."

Aside from cutting costs, Mr Moncher suggests that employee buy-in, increasing outpatient volume, and preparing for accountable care are important.

"We've got our toe in the water to solidify relationships with long-term care facilities with respect to an [Accountable Care Organization] and the continuum of care," he said. "We've had discussions at the senior management level to see who the major players are in our community. At the clinical level we have great relationships, but we need to start building some trust at the leadership level. How do we do that? Who are the key players? That's what we've started thinking about."

Around the Web

Revealing Times [Modern Healthcare]

4 Survival Tips for the Shift to Value-Based Reimbursements [Health Leaders Media]