Price-posting initiative raises concerns about implementation

Physicians see President Bush's order that federal agencies begin publicly disclosing health care price and quality data and adopting interoperable information technology as part of a larger push toward "transparency."

While many doctors support the intentions, issues of funding and execution must be addressed before the government's effort and any private initiatives can succeed, they said.

Although patients in federal health programs, such as Medicare, aren't able to shop around for doctors based on price because the government sets fees, the White House sees the effort as leading by example.

"Health care policy ought to be aimed at bolstering the consumer, empowering individuals to be responsible for health care decisions," Bush said when he announced his directive Aug. 22.

Like several other medical groups, the American College of Physicians' response to the executive order is "generally positive," said Lynne Kirk, MD, the college's president. "We think things need to move in this direction."

The American Medical Association also is on record supporting transparency. The Association already has policy calling on physicians, hospitals and others to post their fees for patients to see. But the AMA says true health care cost transparency also should contain charges set by health plans.

"Today's executive order is a step toward increased price transparency in the health care system," said Edward L. Langston, MD, chair-elect of the AMA Board of Trustees. "However, gone are the days when a doctor posts fees and patients pay the doctor directly.

"Now, it's third-party payers -- insurers and the government -- who set prices," Dr. Langston said. "If we want patients to become more prudent purchasers of health care, they need to be in greater control of their own health insurance choices and decisions, and need price transparency from all insurers -- not just the federal government."

Support for the concept

Karl Ulrich, MD, president and CEO of the 730-physician Marshfield (Wis.) Clinic, applauded the executive order's sentiment.

"I am in support of providing information on cost and quality to the patients and public," he said.

Dr. Ulrich, whose clinic is a member of the Wisconsin Collaborative for Healthcare Quality, said the group is in the process of establishing quality parameters for such a system.

"By making costs and quality transparent, that is really creating an accountability that is long overdue," he said.

"It may be a bit frightening as physicians if our numbers are not as sterling as we would think," Dr. Ulrich said, "but that could lead to improvements and wonderful outcomes in the long run."

Karen Ignagni, president of America's Health Insurance Plans, said insurers embrace the concepts put forth in Bush's directive.

The order "rewards the delivery of high-quality care, fosters an interoperable health care system and takes steps to ensure that consumers are equipped with the best available information they need to make health care decisions," Ignagni said.

"Many health insurance plans already are leading the way by collecting and disclosing quality and price data and making personal health care information more available to their members," she added.

Details, details, details

But the fine points of any transparency effort are crucial, physicians said.

For example, price reports should be comprehensive. "Just posting the fee can be misleading," said the ACP's Dr. Kirk. "It's only part of the information that people need."

Consumers need to understand whether all costs, such as lab work, tests or referrals, are included in the reported price and understand that some physicians have little control over fees set by the institution in which they work, she said.

Who's paying?

Many physicians said they are behind the move toward interoperable health records, which can exchange information with other systems. But they worry about who would foot the bill.

Assuming there is a good control over privacy, patients and physicians would have much to gain from using interoperable electronic records, Dr. Ulrich said. Marshfield Clinic has kept electronic medical records for some 20 years, he noted.

But the executive order does not include any money for the federal effort. "There will be a critical junction ahead about whether this is funded," Dr. Ulrich said.

Joseph M. Heyman, MD, member of the AMA Board of Trustees, knows firsthand the steep price involved in interoperable medical records.

Dr. Heyman, an Amesbury, Mass., gynecologist, has used electronic medical records at his solo practice since April 2001. He estimates that implementing EMRs generally would cost between $20,000 and $50,000 per physician.

"It's not an inexpensive, simple thing to accomplish," Dr. Heyman noted. AMA policy supports initiatives to ensure health IT interoperability and efforts that "provide positive incentives" for physicians to acquire technology.

Dr. Heyman recognizes electronic records' benefits. "It allows us to be efficient and give better care."

The technology reminds doctors of necessary tests and potential drug interactions or patient allergies, therefore preventing medical mistakes, he said. If records are interoperable, they could be accessed when the patient is out of town or seeking emergency services. Then physicians could provide a better diagnosis and avoid redoing specific tests, he added.

But expense again presents a deterrent. Dr. Heyman said it might cost between $200,000 and $600,000 annually to maintain a network connecting physicians, nurses, hospitals and pharmacies in nearby Newburyport, Mass. "That's just one community."

Productivity dip

Michele Johnson, senior government relations representative for the Medical Group Management Assn., says Bush's executive order calling for interoperable electronic medical records is just that, a call without funding or mandates to back it up.

"It's an aspiration. I'm not sure whether the order itself will have any impact on physicians." It is directed more at federal agencies, she said, and may contain more rhetoric than substance.

MGMA conducted a 2005 survey that found between 10% and 15% of medical practices have implemented EMRs, and another 10% to 15% were planning to do so within the next 24 months. Not surprisingly, larger practices were implementing at a higher rate than were smaller practices.

The study found that initial capital costs ran about $30,000 per physician and rose higher for smaller practices. Maintenance costs were estimated at $1,500 per physician per year.

In addition to the high cost, the study reported a significant reduction in productivity, at least through the implementation and acclimation process.

Practices commonly reported decreases in physician productivity of up to 15%, usually lasting a year or more.