Cost Measures

Alliances assessed their individual market and community to determine a localized approach to public reporting of cost information. Some Alliances focused cost displays around certain conditions or procedures (e.g., C-sections) while others provided a broader perspective about cost (e.g., reducing variations in cost/price for the same procedures). Despite their different approaches, Alliances confronted a number of common challenges in creating consumer-friendly comparisons of cost information.

Access to cost data is limited: Despite growing emphasis on cost transparency, access to cost information, particularly for consumers, remains limited. The amount and type of cost data available in a community depends on many factors including the political will—or lack thereof—to share and publically report data. For example, some health plans and providers view their costs or prices as proprietary, and therefore are not willing to make this information publically available. Technical issues, such as provider or patient identification challenges, may also make cost data difficult to access.

Lack of standardization of cost data: The cost or price of care can mean different things to different people, and the phrase used to describe cost will depend on the type of data reported.[1] For example, cost can be displayed in terms of an average or an estimate, overall price of service or total cost of care, or out-of-pocket cost to the consumer, and general or specific to an insurer and coverage level. Information on out-of-pocket costs, which are most relevant to consumers, is difficult to obtain. Cost comparisons may also relate to the ways in which providers offer efficient care by measuring the overuse or underuse of medical services or resources.

Despite these challenges, several Alliances developed creative methods and proxies to contend with the lack of cost data. For example, some Alliances use nationally developed algorithms or regional averages. Others have had success in using national (e.g., Medicare) cost data as proxies. Additionally, three Alliances, with support from the Robert Wood Johnson Foundation and the Network for Regional Healthcare Improvement (NRHI), are calculating and reporting total cost of care data. In addition to promoting cost transparency, this effort represents the first time that standardized cost information will be available across several communities, enabling a robust comparison of the total cost of care.

Taking these challenges into account, Alliances had to first determine what, if any, type of cost information was available in their communities and the type of cost information that has the most meaning for consumers. Alliances that were able to move beyond this step spent considerable time finding agreement and support among providers and other stakeholders on what to display and how to display it. Their key learnings continue to emerge, but indicate that special considerations are needed when creating public reports of cost comparisons.

1. Present quality and cost information together. Present comparative quality and cost information on a single page using five to seven specific measures or summary scores so users can assess multiple attributes at the same time.

2. Use actual dollar amounts to display costs instead of symbols (e.g., $, $$, or $$$). Using actual dollar amounts provides more concrete and meaningful information about costs for comparison.

3. Sort the information by highest overall quality and lowest cost and then allow users to sort by other individual quality measures such as those related to patient experience. Ordering enables users to interpret the data more efficiently and detect patterns.

4. Remember that consumers are only one audience for cost information. Resource use comparisons are not always seen as important decision factors for most consumers, but they are of critical interest to purchasers who are interested in providers who show efficiency.  When determining appropriate cost and value comparisons, consider diverse audience needs.

Creating credible and effective comparative quality and cost displays that can be understood and  used by multiple audiences requires careful collaboration with a broad set of stakeholders. Best practices discovered by the Alliances for effective display of quality and cost measures include the need for clear, well-labeled and explained visual indicators that are arranged in a consistent pattern and that allow for immediate visual comparison with minimal cognitive processing. Users should be able to determine the scope of comparison, and require a clear context for how measures can be used to inform decision-making.