Why don’t all health plans work like Cast­light?

Modern Healthcare - - COMMENT - By Fran­cois de Brantes Fran­cois de Brantes is ex­ec­u­tive di­rec­tor of the Health Care In­cen­tives Im­prove­ment In­sti­tute.

As­tartup com­pany takes claims data from em­ploy­ers and serves it up to em­ploy­ees in a “price trans­parency” tool. It then launches an ini­tial pub­lic of­fer­ing, which quickly rises to a val­u­a­tion of more than $1 bil­lion. Fic­tion? No. But baf­fling, yes, be­cause any health plan in the U.S. could do ex­actly the same, and bet­ter, since the plan knows the price of each ne­go­ti­ated ser­vice with each provider in its net­work.

As such, ev­ery health plan could of­fer its mem­bers ex­act prices for an episode of care. Fur­ther, in states with all-payer claims data­bases, any­one with ac­cess to that data­base could es­tab­lish trans­par­ent prices for health­care ser­vices in that mar­ket. They could and should, but they don’t. That’s why many em­ploy­ers have gone to Cast­light Health and are pay­ing for some­thing their health plans could and should do for free.

When you think about it, that a com­pany with a few mil­lion dol­lars in rev­enue, which never turned a profit, can ex­tract from claims data what ev­ery health plan could, but doesn’t, and end up be­ing val­ued so highly, is the most damn­ing in­dict­ment of the health­care mar­ket’s opac­ity. It’s also a mea­sure of the thirst for so­lu­tions that lift the veil over what is other­wise known to buy­ers in other in­dus­tries— the price of ser­vices and prod­ucts.

Last year, Cat­a­lyst for Pay­ment Re­form and the Health Care In­cen­tives Im­prove­ment In­sti­tute re­leased the first Re­port Card on State Price Trans­parency Laws. States were graded on a curve and few got a pass­ing grade. Over­all, the re­port card showed that res­i­dents in most states sim­ply don’t have ac­cess to the price of a health­care ser­vice in ad­vance of pur­chase.

This year’s re­port shows no progress. As we stopped grad­ing on a curve and took a deeper look at the con­sumer­friend­li­ness of state web­sites, no one gets an A. So has it got­ten a lot worse? For­tu­nately, no. Many states have in­tro­duced good leg­is­la­tion to im­prove trans­parency and oth­ers have as­sem­bled all-payer claims data­bases to re­lease price in­for­ma­tion. Some web­sites, in­clud­ing Maine’s, de­serve high hon­ors and are good mod­els.

Yes there’s progress, but we have a long way to go. And if states were won­der­ing if price trans­parency is worth the ef­fort, just look at the mar­ket val­u­a­tion of Cast­light.

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