One of the essential needs of a consumer-directed healthcare system is transparency on behalf of providers, i.e. full disclosure of fees charged by doctors and hospitals for their services and appropriate quality measures associated with each transaction. Since 2006, the Bush Administration has publicly endorsed the idea of having more information available to consumers on the price and quality of healthcare services, hoping that increased transparency will promote free market principles and competition in the healthcare arena, leading to reductions in the cost of services.

In 2006, Aetna started to provide consumers with online access to the rates it negotiates with physicians in several U.S. cities in the name of transparency. Members in some areas can access price data for the top 30 physician services in addition to information about physician performance and quality. Aetna has also been pushing hard for a California state Senate bill, reportedly one vote short of approval, that would force hospitals and providers to release cost and poorly-defined quality information to health insurers.

What Aetna is doing is a sneaky way of turning the buzz around the value of increased transparency in healthcare to their own perverse advantage. As a colleague of mine put it, for Aetna ” ‘quality’ is defined as compliance with a third party payer cookbook and ‘cost’ is defined as how much money doctors save the insurance company.” This is fake transparency and by no means consistent with the cost-reducing benefits of a consumer-driven healthcare system, which should facilitate competition among providers to offer the best care possible at the lowest price without the imposed restrictions of third parties.

Beware of such distortions. The insurance industry is only concerned with one thing: increasing their profit margins.

Filed under: Health Policy