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Medicare chief tells Philly conference: Patients must be part of controlling health-care costs

CMS Administrator Seema Verma spoke at Wharton's Health Care Business Conference at the Union League Friday.

CMS Administrator Seema Verma speaks at the Wharton Health Care Business Conference at the Union League Friday Feb. 2, 2019.
CMS Administrator Seema Verma speaks at the Wharton Health Care Business Conference at the Union League Friday Feb. 2, 2019.Read moreAnirudh Bajaj

Patients should work to rein in health-care costs by demanding accountability and transparency from hospitals and physicians, U.S. Centers for Medicare and Medicaid Services Administrator Seema Verma said Friday.

“It is incumbent on every American to take control of their health care, to seek out high-value care from providers who are competing for their business, to demand their health-care information, and to make decisions that will lead to better, healthier lives,” the Trump administration appointee said in a keynote address at the Wharton Health Care Business Conference at the Union League in Philadelphia.

Verma spoke days before President Trump’s State of the Union address Tuesday, in which he is expected to talk about his administration’s efforts to rein in drug prices. The cost of prescription medication and health-care services was a top concern for midterm voters, and has captured the attention of both Republicans and Democrats.

The amount people spend out of pocket has risen steadily in recent years and is straining families that aren’t seeing a proportionate rise in wages. Middle-class families with what they thought was good health insurance are putting off procedures and rationing medications, and medical debt is a leading cause of personal bankruptcy.

As people spend more out of pocket on their health care, they are increasingly seeking information to help them make smarter decisions. But finding out in advance how much a procedure will cost is difficult because the prices insurers negotiate with doctors and hospitals are considered proprietary.

Verma said the administration wants to focus on greater price transparency as a way to drive more competition in the health-care system and, ultimately, stem rising costs.

She pointed to several CMS initiatives intended to “empower patients” by giving them access to price and quality information.

As of January, hospitals must list on their website the so-called chargemaster price for every procedure, service, and product they provide.

The same month, CMS debuted its “What’s Covered” mobile app, through which people with original Medicare can look up whether the medical service they are seeking is covered.

“We’re creating a new generation of patients where they have this information,” Verma said after her remarks. “Our patients haven’t had this, and they’ve gotten used to relying on whatever they’re told to do. We’re trying to change that.”

The ultimate goal, she said, is that if patients use cost and quality information to decide where to get care, providers would have to compete for their business by providing better care at lower prices.

But we are a long way from there. Though more readily available, the newly accessible information isn’t necessarily useful.

Hospital systems in the Philadelphia area, including Jefferson Health and Penn Medicine, have put on their websites complex Excel spreadsheets with hundreds of procedures and their chargemaster price.

But the documents are difficult to read because of hard-to-decipher abbreviations, and the prices don’t even apply to most patients. Few people pay chargemaster prices, which are notoriously marked up. Insurance companies negotiate lower rates and Medicare decides on its own what price it will pay.

“It’s not enough to just put it out there,” said Betsy Q. Cliff, a doctoral candidate at the University of Michigan School of Public Health, who has studied how people use price comparison tools. “We have to make sure people understand how to use it and that they’re able to use it.

In a national survey of 1,600 adults with high deductible health plans, Cliff and her colleagues found that people were more likely to say they would use a price tool if they thought it would help them pay less money or access the best doctor. Their findings were published in February in the journal Medical Care.

Some patients have learned the hard way that even when price tools are available, they’re not helpful.

Getting price information to the public is only the first step, Verma said.

Patients need to have information about price and quality, but also need to understand how to make sense of it in a way that will lead to better decisions about their care. Insurers could play an important role in using price and high-quality information to steer patients to providers considered the best value, perhaps by offering reduced co-pays to members who see preferred providers, she said.

“We do hear from people who say no one is going to use this information." Verma said. "The thing I would say is it’s important that information be out there. ... It’s important that patients at least have it.”