Individuals, employers, health care providers and health plans are all asking the same question—how can we make our communities healthier while at the same time reducing cost and increasing quality in our health care system?
Price drives increased spending
The Alliance has established reducing the price of health care as its highest priority goal. Recent studies point to prices as the key driver of increases in inpatient and outpatient spending. The current level of variation in pricing for similar services in different settings or different delivery systems is largely hidden, particularly from buyers. There is concern that a rapidly consolidating market for acute care services in Washington will make this worse.
Price is only one factor in the health care value equation
Reducing price is critical to achieving the Alliance’s other goals: reducing underuse of effective care and reducing overuse. The underuse of evidence-based care leads to avoidable complications, including emergency room visits and hospitalizations, and drives significant cost increases in the health care system as a whole. The current fee-for-service system encourages the overuse of tests and procedures that don’t necessarily lead to better health. Overuse exposes patients to risks as well as increasing health care costs, leading to waste in the health care system.
Transparency levels the playing field
Greater transparency about both episodic price and utilization rates—paired with quality measures—are critical tools needed to level the playing field, especially for buyers. When paired with quality data, reporting on price will allow stakeholders to engage in strategies to lower costs and increase high-value health care in the state. This is the overarching context for the next phase of the Alliance’s work.
Areas of focus
The Alliance is focused on two areas of activity to reduce price variation in Washington.
- Establish the capability to measure and report variation on the price of care.
- Target actions to address selected areas of high price and unwarranted variation in pricing.