CMS Healthcare Cost Transparency Tools Found Lacking

November 19, 2014
Laura Joszt, MA
Laura Joszt, MA
Laura Joszt, MA

Laura is the editorial director of The American Journal of Managed Care® (AJMC®) and all its brands, including The American Journal of Accountable Care®, Evidence-Based Oncology™, and The Center for Biosimilars®. She has been working on AJMC® since 2014 and has been with AJMC®'s parent company, MJH Life Sciences, since 2011. She has an MA in business and economic reporting from New York University.

In an effort to foster greater transparency of healthcare costs, the government and private sector entities are offering tools that provide cost and quality information to consumers. But just how effective are these tools?

In an effort to foster greater transparency of healthcare costs, the government and private sector entities are offering tools that provide cost and quality information to consumers.

Just how effective are the tools offered by CMS? A new report from the Government Accountability Office (GAO) says that the government is failing to actually make healthcare costs more transparent.

GAO analyzed 5 transparency tools operated by CMS: Nursing Home Compare, Dialysis Facility Compare, Home Health Compare, Hospital Compare, and Physician Compare. Three other tools are under development: Hospice Quality Reporting, Inpatient Rehabilitation Facility Quality Reporting, and Long-Term Acute Care Hospital Quality Reporting.

After literature review and interviews with experts, GAO determined the information that is most relevant to consumers relates to their particular circumstances. As such, relevant information typically describes key differences in quality of care and costs.

“Transparency tools are most effective if they provide information relevant to consumers and convey information in a way that consumers can readily understand,” according to the report.

However, the tools already in place lack relevant information on cost, and data on the key differences in quality of care is limited, according to the GAO report. Furthermore, none of the tools provide information on out-of-pocket costs, so consumers cannot anticipate cost of services in advance. There was also an issue with the timeliness of the data being presented and the clarity of the language, according to the report.

Although CMS has taken some steps to expand access to cost and quality information, its process for selecting cost and quality measures for its tools has been influenced far more by providers rather than consumers.

“Without procedures or metrics focusing on consumer needs, CMS cannot ensure that these efforts will produce cost and quality information that is relevant and understandable to consumers seeking to make meaningful distinctions.”

Based on GAO’s research, more effective consumer transparency tools are:

  1. Use plain language with clear graphics
  2. Explain purpose and value of quality performance ratings to consumers
  3. Summarize related information and organize data to highlight patterns and facilitate consumer interpretation
  4. Enable consumers to customize information selected for presentation to focus on what is most relevant to them
  5. Enable consumers to compare quality performance of multiple providers in 1 view
  6. Enable consumers to assess cost and quality information together
  7. Enable easy use and navigation of the tool.