The KHC’s three main organizational strategies are to improve healthcare quality, make healthcare more affordable, and build equitable healthcare communities. As an organization, we have long understood that transparency of information is critical to achieving those strategies.
This spring, a variety of studies and tools with important information about healthcare quality, safety, and price have been released, and transparency in coverage rules from CMS will be enforced later in the year. We want to provide an update on this important work that is going on throughout the country.
There is way too much rich information to adequately cover in a single post, so the KHC is planning upcoming discussions, webinars, additional posts, and other events to dive into this rich information and what it means for Kentucky and Southern Indiana. But in the meantime, we’ve rounded up the latest studies and tools to give you an idea of the current transparency of quality, safety, and price studies and tools.
RAND 4.0 HOSPITAL PRICE TRANSPARENCY STUDY
RAND 4.0, the fourth in a series of Hospital Price Transparency Studies focused on claims data from 2018 to 2020, was released May 17. Prices paid to hospitals during 2020 by employers and private insurers for both inpatient and outpatient services averaged 224% of what Medicare would have paid, with wide variation in prices among states, according to the RAND Corporation report. The study contained information from more than 4,000 hospitals in 49 states and Washington, D.C. The report shows prices as a percent of what Medicare paid for the same services, thus making these relative prices comparable across the country.
In Kentucky, the prices paid to hospitals for privately insured patients by employers averaged 212% of what Medicare paid in 2020, down from 219% in 2019 but up from 198% in 2018. In Indiana, there was a similar change in relative price, with employers in the Hoosier state paying 292% of Medicare in 2020, down from 301% in 2019 but up from 283% in 2018. While Kentucky has the 12th lowest pricing relative to Medicare, variation in pricing continues to be an issue.
NASHP HOSPITAL COST TOOL
While the RAND report shows prices relative to Medicare, in April, the National Academy for State Health Policy (NASHP), released the Hospital Cost Tool (HCT), which is an online tool that health purchasers can use to better understand and address hospital costs. The report was developed in partnership with the Rice University Baker Institute for Public Policy and Mathematica Policy Research, with support from Arnold Ventures.
The HCT identifies different cost measures including hospital revenue, cost to charge ratios, and profitability across more than 4,600 hospitals nationwide from 2011 through 2019. The tool is interactive, allowing users to examine data for an individual hospital or specific health system, by state or users can compare data across hospitals and states. The tool is based on NASHP’s Hospital Cost Calculator that uses Medicare Cost Report data annually submitted to the federal government by hospitals. Data for 2020 will be added to the tool after more hospitals have completed their reports for that year.
The RAND and NASHP data, along with data from the Center for Medicare and Medicaid Services, Turquoise Health, and Healthcare Bluebook, are now available in the Sage Transparency dashboard. The first-of-its-kind tool was developed by the Employers’ Forum of Indiana and brings together public and proprietary data on hospital pricing and quality.
The dashboard gives users free access to price and quality data for thousands of hospitals across the United States. Sage Transparency is an interactive, customizable dashboard which displays data from a variety of sources in an easy-to-understand way.
LEAPFROG SPRING SAFETY GRADES
The Leapfrog Group, a national nonprofit representing hundreds of the nation’s most influential employers and purchasers of health care, led in Kentuckiana by the Kentuckiana Health Collaborative, announced this week the spring 2022 Leapfrog Hospital Safety Grades.
The independent grading system assigns an “A,” “B,” “C,” “D,” or “F” grade to all general hospitals across the U.S. based on more than 30 national performance measures reflecting errors, accidents, injuries, and infections, as well as systems that hospitals have in place to prevent harm. The Kentuckiana Health Collaborative is the Regional Leader for The Leapfrog Group in Kentucky.
In Kentucky and Southern Indiana, 61 hospitals were graded, and 12 earned an “A,” 14 earned a “B,” 26 earned a “C,” 5 earned a “D,” and five were ungraded in the spring reporting.
The hospitals that earned an “A” include Baptist Health Corbin, Baptist Health Floyd, Baptist Health Lexington, Baptist Health Richmond, Deaconess Henderson Hospital, Mercy Health Lourdes, Monroe County Medical Center, Norton Audubon Hospital, Norton Brownsboro Hospital, Norton Hospital, Norton Women’s and Children’s Hospital, and St. Elizabeth Healthcare – Ft. Thomas.
In 2022, Kentucky ranked 35th among the states with 20% of graded hospitals receiving an “A” grade. That is down from the fall 2021 report when Kentucky ranked 30th with 25.4% of hospitals receiving an “A” grade. Indiana, the southern tip of which is located in the KHC region, ranked 29th.
For more information about the Leapfrog Hospital Safety Grade, as well as individual hospital grades and state rankings, visit HospitalSafetyGrade.org.
CMS TRANSPARENCY IN COVERAGE RULE
In 2021, CMS began enforcing the Hospital Price Transparency rule, aimed at empowering patients with the necessary information to make informed healthcare decisions. The rule requires hospitals to publish clear, accessible pricing information online about the items and services they provide in a machine readable file. In July 2022, a similar Transparency in Coverage rule will be enforced, which requires health plans to provide the same information. The rule will allow for broader visibility, including in-network negotiated rates and out-of-network allowed amounts.