To understand the benefits of transparency and how it can be achieved in healthcare, we sat down with the Chair of Lorica Health’s Board, Professor Graeme Samuel AC, to find out more. Graeme has been involved in competition policy since the late 1980s and is a former Chair of the Australian Competition and Consumer Commission (Australia’s competition watchdog).

Healthcare transparency involves providing stakeholders with accurate and timely information that improves the efficiency of healthcare decisions. This has always been difficult to achieve due to the uniqueness of every healthcare interaction, siloed data and necessarily stringent privacy and security requirements. However, with rising healthcare costs and declining private health insurance membership the case has never been more compelling for transparency. Consumers are questioning why information commonly found in other sectors (eg cost and quality) does not exist in healthcare. With modern advances in data science and the secure hosting of sensitive data, solutions to this problem are emerging. 

Health compared to other sectors

In the retail sector, consumers make purchasing decisions based on their relative preferences for cost and quality related to an item or service, Samuel explains. For example, a consumer may decide to purchase a cheaper, generic brand of television at a heavily discounted price but will do so acknowledging that the product may only last a short period. They have traded quality for price. On the other hand, the consumer may decide to spend more on a reputable brand synonymous with high quality products. Here they have traded off a product designed to last for many years against the additional cost of that product suggests Samuel.  

“Health has always been identified as different,” says Samuel. “This level of choice and transparency are far more difficult to achieve in healthcare. There is significant information asymmetry and power imbalance unlike the retail example above.” Patients have not historically had access to information on price and quality of treatment. They have been entirely reliant on the guidance of their GP and treating physician for this information, Samuel expands. However, their primary adviser is often reliant on limited knowledge built up from anecdotal experience. 

This lack of access to information on the expected cost and outcomes for a given health intervention can put significant financial pressure on patients. By the time a patient has met with a specialist they often feel committed to continue treatment regardless of the emerging cost and powerless to discuss  or negotiate. 

Samuel argues that healthcare should not be different to the retail sector in this regard. “Translating the retail experience for a consumer to the healthcare experience for a patient tells us that it is vital for patients to be given sufficient information to be able to make an informed choice about the services they consume”.

The role of cost and quality of services

Healthcare information is often context-specific, with a patient’s GP playing the role of adviser to the patient. Transparent information concerning the cost and quality of healthcare services would allow GP’s to compare options and make informed decisions in partnership with their patients. Expected out of pocket costs and location of consulting rooms would be some of the data clearly identified through this process. 

Samuel explains that quality of care information is more difficult to interpret and compare. There are a range of factors that impact the quality of a service:

  1. The number of times the specialist has performed a particular procedure
  2. The hospital in which the procedure/s were performed (for example compliance rates with hygiene and infection control practices may vary across hospitals)
  3. The complexity of the procedure/s
  4. The age of the patient and other patient-specific factors that may impact on the risks associated with the procedure/s

Further, there are a range of patient outcomes that should be considered when assessing quality.

Benefits of transparency of data in healthcare

Improved transparency in healthcare is critically important to support patient choice. It will also lead to reduced healthcare costs and improved efficiencies more generally, in particular for private health insurance, private hospitals, Medicare and public health services.. 

Providing surgeons with transparency regarding their own performance will lead to improved quality of care including lower post-operative complication rates, reduced re-admission rates, shortened average lengths of stay (providing more capacity back into the health system) and ultimately better health outcomes for the patient, Samuel elaborates. In addition to these direct savings, there are significant indirect societal benefits including increased productivity both for the patient and carer/s by enabling patients to return to good health faster, he says. The end aim is improved outcomes for the patient. 

Samuel points out that if supported by the right information, patients will have a more informed discussion with their GP and can consider the best surgeon for their circumstances. This may mean deciding to travel further from their home to access good quality clinical care at a price they are satisfied with.

Another benefit is that providers can self-regulate by being aware of their prices and services in comparison to their peers. Improvements in quality and more efficient pricing that takes account of complexity and quality is the inevitable result. 

Barriers to transparency of data in healthcare

There are many barriers which need to be addressed before healthcare transparency can be achieved, says Samuel.

One of the biggest hurdles to overcome is access to data. Whilst the private and public healthcare sectors recognise the merits of transparency, Samuel explains, it is vital that the analysis is sound, accounting for differences in patient complexity profiles between surgeons. The presentation of results must also be in a simple, easy to understand format that is accessible for all healthcare consumers (catering to varying degrees of healthcare literacy). Initially the analysis should be presented only to a patient’s primary health adviser, the GP, who will involve and advise their patients in making appropriate choices having regard to relevant factors of quality of outcome, price and convenience.

Reforms needed

It is clear that reform is needed before we can reach the goal of transparency in healthcare. Access to data from private health insurers, hospitals and the public health system are vital but present some challenges in the current regulatory environment, Samuel explains. Having data from all sources is critical to ensuring analysis deals with issues of cost and quality across the entire healthcare sector, says Samuel.

Samuel warns it is important that this data is properly risk adjusted. It is widely acknowledged that more difficult procedures and complex patients with comorbidities present a higher risk of complications due to the difficulty of the operation. It is important this is adjusted in the data to avoid a disincentive for surgeons to undertake complex procedures, Samuel elaborates.

Similar to the television example, armed with the ability to compare the care outcomes of surgeons to the relative cost for the service, the patient will be able to make a more informed decision on whether they are prepared to pay a higher amount for the service, he says.

Samuel believes Lorica Health is at the heart of building the case for transparency in healthcare. The prospect of transparency in healthcare has never looked brighter. He said discussions with a variety of industry stakeholders including data custodians, professional associations and Government agencies were encouraging and suggested data would soon be available under appropriate conditions. It is vital that rigorous analysis is undertaken as soon as possible to ensure the process is trusted and can be successfully leveraged to support patient empowerment and choice, Samuel explains. 

Lorica Health develops leading edge software to power better healthcare by enabling a transparent, fair and efficient health marketplace. With extensive experience in data analytics, Lorica Health is well placed to support quality analysis in this space. 

Read more about transparency of data & market quality in this article penned by Lorica’s CEO and Managing Director Professor Mike Aitken AM.

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