Health Care

Auditor’s report says state could be doing more to make health care costs transparent for consumers

Vermont is not meeting a legal obligation to use its health care claims database to provide the public with consumer information, according to a new report from the State Auditor’s Office.

The report also found that Vermonters are taking on a growing amount of liability for their health care costs.

The number of high-deductible health plans has grown from 21 percent of the commercial market to 34 percent in three years from 2009 to 2012. A deductible is the amount one pays out of pocket before insurance benefits kick in.

In addition, plans sold on the state’s health care exchange, which opened last year, can leave families with as much as $12,700 in out-of-pocket costs on top of premiums, according to the report.

Making price and quality information accessible could help patients make value-based choices for non-emergency medical care.

The Vermont Health Care Uniform Reporting and Evaluation System (VHCURES) is an all-payer claims database with information on more than 100 million claims paid by commercial insurers, Medicaid and Medicare going back to 2007.

The auditor’s report describes it as, “a digital catalogue of all fees for medical services and products that insurers paid over the last seven years in Vermont.”

VHCURES data has been used to inform health care initiatives including the Blueprint for Health and Green Mountain Care, the state’s planned universal, publicly financed health care program.

State Auditor Doug Hoffer. Photo by Roger Crowley/for VTDigger
State Auditor Doug Hoffer. Photo by Roger Crowley/for VTDigger

State law requires it be used to assess the health care system capacity, inform policy, evaluate programs, compare treatment costs and approaches, improve the quality of health care and inform consumers.

The auditor’s report found Vermont has made progress on all but the charge to inform consumers using the claims data.

“It’s regrettable, but the fact is it’s not too late; they can do it now,” State Auditor Doug Hoffer said. “And that appears to be their intention.”

Hoffer said that consumer information on the price and quality of health care services will still be important, even if the state makes the transition to a single-payer program.

“Providers charge different amounts for different procedures all over the state regardless of whether there’s going to be two payers, one or five,” he said.

The information currently available to consumers is limited and difficult to find.

The legal framework exists to provide consumers with meaningful guidance about health care services, according to the report, but the state has not created an effective program to help patients compare price and quality information specific to their situation, meaning whether they have insurance and what type.

Green Mountain Care Board Chair Al Gobeille said creating consumer tools using VHCURES data is something the board intends to do, but it’s going to take years not months.

“It’s a priority, but it’s not the priority,” Gobeille said, noting that the board has limited resources and is managing several other health care reform initiatives.

The board took control of VHCURES a year ago, and is planning to overhaul the database to make it a more useful tool for the state agencies, contractors and research groups that rely on it.

Consumer tools in Vermont and other New England states

Current law divides responsibility for implementing a consumer information system between the Department of Financial Regulation and the Green Mountain Care Board.

DFR publishes hospital and health plan report cards that illustrate price variation and contain some quality information, but they are of limited use to consumers because they use what hospitals charge, which isn’t what insurers pay, and even the uninsured can access provider discounts.

The department’s online offerings also aren’t attracting visitors, according to the report. The hospital report card site attracted fewer than 700 visitors last year, and the health plan report card site attracted fewer than 100 visitors.

The New England states are leading the way in developing all-payer claims databases, Vermont included, but Maine, New Hampshire and Massachusetts have all experimented with putting price and quality information online for consumers.

New Hampshire launched a price comparison tool in 2007 that allows the public to compare side-by-side price information for 30 common health care procedures based on their situation. Maine quickly followed suit and more recently Massachusetts launched a similar website.

The New Hampshire site, nhhealthcost.org, went dark in 2012 when the state changed vendors for its claims database. But studies of the tool’s impact on New Hampshire’s health care system suggest it had greater impact on providers than consumers, according to the auditor’s report.

Publicly shedding light on price variation among providers led to a restructuring of hospital-insurer negotiations and inspired health plans designed to encourage the use of lower cost services.

The New Hampshire site may have reduced price variation, but it didn’t make health care services cheaper, according to Gobeille.

“Price information has not lowered cost; meaning simply putting it out there isn’t effective,” Gobeille said, “If we do something, I want to make sure it’s effective.”

It’s widely recognized that price information alone isn’t helpful to consumers, and that pairing it with quality or outcome data is important to informing a patient’s choice.

The Massachusetts site provides some quality information for certain providers and services, but it doesn’t provide price estimates based on a specific insurance plan, and the data used is often four to six years old, according to the auditor’s report.

One aspect of the planned revamp of VHCURES is to integrate other health data sets beyond claims – which capture just what was paid – in order to make it more useful. One example mentioned in the board’s RFP is the hospital discharge data collected by the Department of Health.

Consumer tools built on an improved VHCURES system will provide greater value to consumers, Gobeille said.

VHCURES 2.0

The board intends to overhaul the system when the state’s contract with Maine-based On Point Health Data ends in August.

A request for proposals to do the overhaul was released in May, and bids are due in July.

The goal is to track individual patients through the health care system while protecting their personal information. That will eliminate duplication that currently happens because all claims in the database paid on a patient’s behalf are not associated with a distinct patient ID.

As described in the auditor’s report, “The plan is for one lockbox vendor to receive data with personal identifiers, such as names, social security numbers, street addresses, and medical record numbers. The contractor would secure the information, encrypt it, and transfer it to a second vendor that would receive and organize the de-identified information in a data warehouse.”

The contractor will also eliminate multiple versions of the database currently spread across state government, store the data, integrate related data sets, and create Web-based analytical tools to make the data easier to interpret.

The state will continue to support the current version of VHCURES until the new version can be launched because many health care reform activities rely on its data.

Negotiations with potential vendors are expected to begin in November, according to the RFP, but Gobeille had no timeline for when VHCURES 2.0 might be operational.


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Morgan True

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  • paul reiss

    Any negotiated fees that consumers must pay directly from their deductibles or co insurance should be readily available with a single phone call to provider or insurer, or easily accessible on a website. The legislature could mandate it if not done voluntarily.

    • Doug Hoffer

      Correct. But that’s after the fact. Consumers need price and quality information before they choose a provider.

  • Jim Barrett

    Laws were written and passed requiring certain actions by Shumlin and this governor has chosen to ignore. So the bottom lines is, government and its leaders will do whatever they please and laws and accountability mean nothing! We can’t even get an ESTIMATE on what the costs will be for single payer, the biggest ripoff in this decade and everyone of us is affected.

  • Lee Stirling

    Below are 2 links to relatively recent articles at-odds about whether price transparency in health care actually does foster competition and help bring down costs. Common between them is the need to make an apples-to-apples measure of quality available with the price so that consumers can make educated decisions.

    http://www.commonwealthfund.org/Newsletters/Quality-Matters/2012/April-May/In-Focus.aspx

    http://www.theatlantic.com/health/archive/2013/04/how-price-transparency-could-end-up-increasing-health-care-costs/274534/

  • Jamie Carter

    This discrepancy in fees for a given health issue is one of the driving costs of health care, and a tremendous disservice to the public, who can not determine what something is going to cost until after the fact. There is no other business where this model is in effect.

    Can you imagine going to a car dealership, choosing a car, signing papers only to get your payment book a month down the road to find out what it actually costs… of course not.

    Hospitals get away with it because care is required, often without regard to cost. However there are also plenty of times where it is not an emergency and people need to be able to comparison shop. Health care has increased tremendously and one of the reasons is because a lack of ability on the consumers part to comparison shop. There is no competition to hold down prices and costs.

    I sincerely hope that the with a new health care system coming that one change that is made is a standardization of costs. The state needs to regulate this if single payer is to work… This procedure gets this amount of money.

    We see FAHC purchasing land, big salaries for its CEO, and continuous renovation and expansion of its facilities. Time for hospitals to start tightening their belts a little. The all you can eat buffet is running out of food.

    • Mark Moore

      Two words : cost shift. Check it out

      • Jamie Carter

        Cost Shift is certainly why insurance is so expensive, it’s also why many procedures have costs out of line with the actual procedure. The hospitals have to cost shift so FAHC makes your appendectomy a $20,000 operation. Northwestern cost shifts somewhere else.

        Dictating the amount of reimbursement for a given procedure is the only way single payer will work and contain costs.

        • Mark Moore

          So you are advocating that medicaid and medicare reimbursement rates be increased, Jamie.

  • Jim Christiansen

    “I sincerely hope that the with a new health care system coming that one change that is made is a standardization of costs.”

    Driving out the incentive for quality care is a sad policy, and quite frankly, it is far worse than no policy in the long term.

    Equality of misery is still misery.

    • Jamie Carter

      I am going to disagree… the “quality” of care is not dependent on the cost of that care anymore then the quality of education in are schools is a result of per pupil spending.

      In fact I would argue that standardizing costs would increase quality. If you need to go have a simple out patient procedure and FAHC, Northerwestern, and where ever else all have the same cost, you are going to go to the place with the best quality because that becomes the differing factor. Therefore, hospitals will need to increase quality if they want patients ($$$).

  • Kathy Callaghan

    I hope that folks with high deductible plans who are responsible for a lot of their health care expenses will avail themselves of the services of the new CareChoicedMD urgent care centers.

    The Barre/Berlin/Montpelier clinic is now open right next door to Kinney Drugs, and CareChoicesMD is opening more around the state in the near future.

    I understand that CareChoicesMD’s prices are significantly lower than those of the hospital-based urgent care centers, for the same services. This may be because they are not affiliated with hospitals and do not have to support that overhead.

    In any event, Vermonters should comparison shop when it is their dollar, and these new clinics offer excellent opportunities to be a health care consumer.

  • Dave Bellini

    “Vermont is not meeting a legal obligation..”

    “Report says the data is available but not shared. ”

    “… $12,700 in out-of-pocket costs on top of premiums…”

    “…the state has not created an effective program…”

    “…but it’s going to take years not months.”

    There’s been a gazillion dollars spent and an army of folks hired and the net result so far is a non-functional computer system, higher health care expenses for Vermonters, zero transparency and willful disregard for the law.

  • I thought that the health care exchanges were going to make everything transparent and easy for consumers to shop intelligently for affordable health care insurance.

    It now looks like a consumer has be a combination of a Philadelphia lawyer, CIA code breaker and soothsayer to decipher the policies offered on the exchange and divine other required information not yet available .

    Maybe I’m over reacting and we all need to relax and be patient, after all the State as only spend $82 million so far on the exchange.

    Plus we’ve been assured by Mr. Gobeille that getting the correct info out is a priority for the Green Mountain Care Board, but’ it’s not the priority…….ummmm?

    He also adds the public sector’s kiss of death on ever getting this task done when he says: “ The Board has limited resources”……. Translation…..It’s not going to get done in this life time and its not our fault.

    Maybe it is time to panic.