Encouraging radical transparency: Could the VA system be the start of a breakthrough for healthcare markets?
Marketplaces require some level of transparency and choice to function properly. People need to know what goods or services cost, and suppliers need to understand demand. Otherwise, products become too expensive or scarce: two major problems in healthcare.
A big reason we struggle to provide affordable healthcare is because healthcare markets tend to be some of the least transparent around: buyers are often limited in their choice of healthcare professionals, don’t get much information about doctors beyond their name and specialty, and know almost nothing about costs.
Even the various online doctor rating websites that do exist, such as ZocDoc and RateMDs, often tend to be more about patient opinions than whether or not a condition was successfully treated. And costs are an even more complex matter: not only do patients typically lack reliable information about what procedures might cost, but doctors themselves may have no idea what the treatments they recommend will cost patients, and U.S. government research has shown that prices for the same procedures can vary widely by location.
Fortunately, there are steps we can take to foster transparency, even in healthcare.
To improve the quality of information available to its patients, the U.S. Department of Veterans Affairs recently unveiled its VA Access and Quality Tool, which provides easy access to information about quality of care, patient satisfaction and average wait times in VA hospitals across the United States.
The system aims to help hospitals increase their satisfaction scores and reduce wait times by making key statistics more visible to more people. This provides an unusual level of transparency to healthcare consumers, helping them make better decisions about which hospital to go to and incrementally opening up the healthcare market to greater transparency.
The VA is still far from a free market: it focuses on providing services to a pre-set population, and its pricing is not necessarily fully transparent or consistent across locations or patients. But by taking the step of revealing additional information about product availability and performance, the VA is coming closer to being a marketplace where healthcare consumers can make truly informed decisions.
According to the non-partisan Robert Wood Johnson Foundation (RWJF), 69% of people want insurance companies to share information about what they pay for procedures. Having access to information about wait times and quality of care might be represent important first steps toward more transparent healthcare costs and better outcomes.
Knowing how a hospital performs relative to other hospitals in the system is a bit like knowing your competitor’s prices: it increases the level of transparency and helps each party perform better, while enabling consumers to make better decisions.
Perhaps eventually, this transparency tool will help patients make better decisions and get better care. Additionally, the RWJF also suggests that transparency can actually help lower costs. If the VA ended up adopting a more standardized and transparent approach to pricing, it could simplify billing for its staff and payments for the government and for any patient obligations that exist.
But providing transparency isn’t as easy as asking for it. A lot of work goes into gathering and presenting the data needed to inform applications like the VA quality tool.
In addition to being able to access the right data in the right format, the data must be aggregated, anonymized, and brought together in a way that makes it easy to search. Many different systems have to work closely together for a tool like this to function well, but the promise of the tool shows that uniting relevant data in one place can transform operations and deliver market transparency.
Healthcare will never be a perfect market: buyers rarely have the option to just walk away, and will never have perfect information about every nuance in every subspecialty. But it can become a better market when patients have access to greater amounts of accurate information. And data automation can play a major role in delivering that access to information.
Once patients have easy access to the right information, underperforming hospitals will have to shape up or risk losing patients to hospitals with better outcomes, potentially improving healthcare for all.