Testimony of Robin Downey, Vice President and Head of Product Development, Aetna, before the House Committee on Ways and Means Subcommittee on Health
July 18, 2006
Good afternoon, Ms. Chairman and members of the Committee. I am Robin Downey, Vice President and Head of Product Development for Aetna. I'm very pleased to be here today, and to describe to you Aetna's experiences with transparency in health care.
As one of the nation's leading diversified health care benefits companies, Aetna is proud to serve approximately 28.3 million people, including 15.4 million medical members. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans and government-sponsored plans.
Nearly five years ago, Aetna was the first national health insurer to offer a consumer-directed product which fully integrated health plans with Health Reimbursement Arrangements (HRAs). The authorization of Health Savings Accounts (HSAs) by Congress at the end of 2003 provided a critical extension of this concept, permitting employees to defer their own money into a similar, tax-advantaged health spending account that was also portable. Aetna's membership in HRA and HSA-compatible High-Deductible Health Plans currently includes nearly 600,000 Americans.
Today, I plan to share with you Aetna's experiences in introducing price and quality transparency in the health care sector - a topic that is particularly relevant as more and more Americans join consumer-directed plans.
As we begin to discuss the issue of health transparency, I'd like to illustrate why health care transparency is so important for you and your constituents. Imagine a world without price tags. You can buy that big screen TV that you've had your eye on, but you won't know the price until your credit card bill comes in the mail. Sounds ridiculous, right? But that's exactly the world the average American lives in when he or she seeks medical care.
As reported in the Wall Street Journal in February 1 and June2 of 2005, knowing the cost of a doctor's visit has long been a missing piece of the health care decision-making process. More recently, 84 percent of Americans agreed that hospitals, doctors and pharmacies should publish their prices for all goods and services. 3 And, in a recent Aetna survey in Cincinnati, 95 percent of members surveyed responded that information on price would be useful, but 70 percent of physicians felt it wasn't useful for their patients. These responses reflects a significant gap in understanding the impact that today's health benefits plans have on a consumer's need for information to help manage their health care spending.
Enter an emerging health care trend known within the industry as “price transparency.” Through price transparency, consumers know what they can expect to pay at the physician's office before visiting the physician. While this approach sounds sensible, no health insurer had ever provided this level of detail to its members. The reasons for this were varied - contractual issues, competition and complexities in the rates physicians agree to accept from insurers, concerns about consumers shopping for health care on price alone.
That changed in August of 2005, when Aetna announced that we would be the first health plan to provide consumers with online access to the discounted rates for the most common office-based procedures provided by primary care and specialist physicians.
Price Transparency in Cincinnati
Aetna's price transparency initiative responded to a call for help. The employer and broker communities asked us for our help in educating consumers about the actual costs of medical care. Despite the fact that we already offered our members a wide variety of information on health issues, health care quality, and average pricing within specific geographies, the increase in adoption of consumer-directed plans necessitated more detailed information.
After considering a variety of options, we determined that the time was right to offer physician-specific price information. The question was, how to do it in a way that was meaningful to consumers and respectful to the medical community?
One of the keys to successful implementation was testing the program on a limited pilot basis, allowing us to solicit feedback and expand and enhance the initiative over time. The greater Cincinnati market was chosen as the test market for a variety of reasons.
Collaboration also would be key. As the pricing tool was built, our medical directors and network professionals in the Cincinnati market began meeting with large physician groups and organized medicine. We also conducted more than 20 focus groups with physicians and office staff. Feedback from these meetings and focus groups - including changes in the terminology used with members, intense member education, and intense physician communication - were incorporated into the program.
The Launch
On August 18, 2005, Aetna launched price transparency. The initiative was well-publicized in the media, receiving significant attention from the Wall Street Journal, ABC World News Tonight, and National Public Radio. These media stories helped educate consumers, employers and physicians about not only Aetna's efforts, but the trend towards transparent pricing in health care.
With the launch of our pilot, consumers could research what they could expect to pay at the doctor's office before going in for a visit. Available via the Aetna Navigator password-protected member website (www.aetna.com), the tool includes rates for 5,000 physicians and physician groups.
Members access pricing via our “DocFind” physician search engine. Rates are currently provided for office visits, diagnostic tests, minor procedures and other services. In all, rates are offered for up to 25 services by specialty and, considering the variations in services among specialties, the tool contains rates for 600 services in all.
The Results
Since the launch of price transparency in Cincinnati, between 600 and 1,000 consumers a month have visited the price information. Increased usage happens at two specific times - as consumers choose their new benefits for the year ahead (typically in the fall) and as consumers begin to use their new benefits (typically in January). While it's too early to say whether consumer behaviors have changed in Cincinnati, we believe that simply raising awareness about the costs of care is one more step in creating a marketplace for consumers as health care decision-makers.
Beyond consumers, we have spent months soliciting feedback from physicians, employers and policy-makers. Physician research was conducted in Ohio, Connecticut, Washington, D.C. and Florida. Overall, physicians have provide constructive comments on improvements to the program, employers have been keenly interested in our plans to expand the program to their employees, and policymakers have asked to learn more about our experiences. In addition, Aetna's move towards price transparency has been hailed by the media as a “watershed in the evolution of a health care policy in the U.S.”4
The evolution of health care transparency
Clearly price transparency is only the beginning. As we met with and surveyed physicians across the country, they were very clear that their patients needed enough information to make decisions based on overall value, not simply price alone. Based on their feedback, we felt it was very important to expand our transparency efforts to provide consumers with information on quality and cost efficiency. Since we have been designating specialists into our High Performance Network based on clinical performance and cost efficiency since 2004, the integration of this information along with unit price transparency was the logical next step.
Aetna's High Performance Network: Aexcel
Let me provide some brief background on our Aexcel High Performance Network Option. On January 1, 2004, Aetna launched its High Performance Network, featuring Aexcel-designated specialists, in three markets. Health care costs were continuing to rise, and employers were asking for solutions to help mitigate costs while maintaining access to quality care. In addition, consumers often have little access to independent, objective information when they choose specialists. Aetna worked closely with some of its largest customers to create a network option that would meet their needs and also offer consumers information to help them make more informed health care decisions. The result is Aetna's High Performance Network which focuses on medical specialties that represent a high percentage of medical services and costs.
Aexcel-designated specialists have met established thresholds for certain clinical performance and cost-effectiveness measures. Currently, the Aexcel-designation process applies to 12 medical specialties. Doctors within these specialties are evaluated against measures that include the number of Aetna patients treated, clinical performance, efficient use of health care resources and, finally, access to care. Measures include unexpected adverse health events and a specialist's rate of his or her patients' hospital readmissions over a 30-day period.
Aetna's High Performance Network has been very well-received. Based on employer interest, we expanded its availability to include a total of 20 markets this year, with 7 additional markets recently announced to be effective 1/1/07 . We currently have 35 customers with 483,000 members enrolled in Aexcel and fully expect continued growth.
Next Steps
Just last month, Aetna announced that we would be expanding our health transparency initiatives to include price, clinical quality and efficiency transparency in all or parts of 7 states and the District of Columbia, and price transparency alone in all an additional 3 states. The clinical quality and efficiency information is based on the Aexcel designation. Marrying unit price with Aexcel data helps consumers and employers make decisions based on overall value.
When these enhancements go live on August 18 of this year, clinical quality and efficiency information will be available for nearly 15,000 specialist physicians, and specific pricing will be available for more than 70,000 physicians. In addition, we will be expanding our pricing tool to include up to 30 procedures per physician with the addition of major procedures to the list of available services.
Aetna will continue to work with employers, providers and legislators to push the envelope on health care transparency. We expect to expand the program to additional markets and enhance it with new information, including hospitals and ancillary providers over time.
