The late, great economist Uwe Reinhardt once likened the ability of U.S. consumers to shop for health care to sending blindfolded shoppers into a department store. In a new report to the Pennsylvania Insurance Commissioner, the “Shoppable Care Work Group” provides advice on how to take the blindfold off.

The forward-looking group, co-chaired by Carnegie Mellon’s Martin Gaynor, included LDI Senior Fellows Justin Bekelman and Dan Polsky. The group readily acknowledged that not all care is shoppable, and that few consumers have shown a willingness to shop for care. Nevertheless, they thought it likely that interest in, and incentives for, shopping would only increase in the future:

As consumer enrollment in plans with high cost-sharing continues to increase (which seems very likely) more consumers will have an incentive to shop for care. Therefore it is likely that interest will increase among consumers in obtaining usable, actionable information that allows them to choose among providers in an informed, rational way.

The group’s mandate was to recommend ways that the state could enhance the ability of consumers to shop for health care. Over the course of a year, the group reviewed shopping tools offered by health insurers and other entities designed to increase price and quality transparency. They found that existing tools have serious gaps in usability, services covered, information on quality, and uptake by consumers.

How can the state help? The group recommended that the state confer with stakeholders to define a minimum set of shoppable care services, which would be updated periodically. Similarly, they recommended that the state define a basic set of quality measures that are easy to understand, meaningful, and actionable to the consumer. They urged the state to recommend that all insurers offer a consumer-facing price and transparency tool including these services and quality measures, and to make public a list of insurers who do so. 

As for the shopping tool itself, the group recommended that it be able to:

• estimate a consumer’s complete out of pocket expenses for a treatment based on their plan’s benefits and their eligible expenses at that point in time.
• provide relevant quality measures for the treatment and provider(s), when available.
• provide information on providers’ locations.
• provide information on consumer recourse if there is a billing issue.
• provide patient experience or ratings information, from users/members or from outside entities, where such information is valid, reliable, and available.

Role of an all-payer claims database

Because Pennsylvania is looking into establishing an all-payer claims database (APCD), the group also considered how having an APCD might affect these recommendations. They reviewed a consumer-facing transparency tool used by the New Hampshire APCD, and obtained information on other states’ APCDs. Consumer use of the APCD is generally low.

The group concluded that insurer transparency tools and APCDs are largely complementary. APCDs can provide information on quality and on the amounts providers are paid by insurers, but do not have access to information on consumers’ health insurance benefits or incurred expenses, nor which providers are in-­‐network. APCDs cannot tell consumers—insured or uninsured—what to expect their out-of-pocket costs will be. However, APCDs can serve a public reporting function that can benefit consumers, if public reporting leads to providers improving their performance.

The work group is part of a larger initiative to enhance price and quality transparency in Pennsylvania. In turn, that initiative is an important piece of the Health Innovation in Pennsylvania (HIP) plan, whose goal is to improve the health of all Pennsylvanians by transforming how health care is paid for and delivered.