Dr. Zeke Emanuel: What makes one hospital a model for price and quality transparency

Despite consumers' desire for information on hospital prices and quality outcomes, they are often kept in the dark. However, if people could make informed decisions regarding their healthcare services, competition would likely lead to improved quality and lower costs, Ezekiel Emanuel, MD, wrote in Fortune magazine. One hospital in California recognized the value of providing this important information years ago.

Since 2012, for-profit Hoag Orthopedic Institute in Irvine, Calif., has posted its quality data online, as well as the comprehensive prices for all of its surgical procedures, according to Dr. Emanuel. In its annual 45-page Outcomes Report, "The first 30 pages are filled with graphs, charts and data that would thrill a policy wonk," he wrote.

The Outcomes Report includes how many hip and knee replacements and other operations the hospital performed over the last three years, allowing for insight into the relationship between volume of surgeries performed at the hospital and quality outcomes. Hoag also discloses its readmission rates, surgical site infections and rates of other complications.

"But who cares if there are no infections if most patients don't experience pain relief and don't get back to playing golf and other normal functions after their knee is replaced?" Dr. Emanuel wrote. Hoag discloses data from patients' self-reported pain scores before and after undergoing surgeries. It also provides information on quality improvement projects.

Though Hoag's degree of price and quality transparency goes above and beyond most hospitals, there is still room for improvement, according to Dr. Emanuel. First, the quality data are not narrowed down by each individual surgeon, and patients have said Hoag could improve communication about medications. Additionally, consumers need to visit the Orthopedic Surgery Center of Orange County's website to view Hoag's prices, instead of simply going to Hoag's website.

According to Dr. Emanuel, a few things make Hoag unique. First, it actually cares for Medicaid and underinsured patients, unlike many other for-profit hospitals that close their doors on high-risk or Medicaid surgical patients in favor of the "good paying" patients. Roughly 40 percent of Hoag's patients are on Medicare, and in 2014, it provided more than $1 million in charity care including 300 operations. It is on track to provide more than $2 million in charity care in 2015, according to Dr. Emanuel. Hoag's website even explains to patients how to receive financial aid for surgery.

Second, Hoag never advertises — leaders there believe publishing its superior performance in its annual quality report is advertising enough.

Third, it is a joint venture between the local, nonprofit community hospital and the physicians. "The partners believe in themselves and are willing to compete on quality and price. They are maniacal about collecting data, and using it to drive infections to zero, patient experience and perceptions of care to 100 percent, and pain and functional outcomes ever higher," Dr. Emanuel wrote. Hoag is also one of the few healthcare providers to conduct time motion studies to determine the true costs of services and identify inefficiencies to be eliminated.

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