Actuarial survey says transparency would reduce healthcare costs

Two recent surveys by the Society of Actuaries suggest that more transparency within the U.S. healthcare system is the key to bending the cost curve downward.

The SOA surveyed more than 600 members of its health section and hosted an online survey of 1,000 Americans to understand what consumers believe would help them control their own healthcare costs.

Healthcare actuaries believe that creating more transparency between doctors and patients, as well as between the provider community and patients, would be at least somewhat effective at bending the healthcare cost curve downward.

For example, 86 percent recommend making prices for treatments more visible and available for patients, while 79 percent recommend educating consumers and providers on the efficacy of care.

"The focus on transparency is essential for the future of the United States healthcare system, as pricing, effectiveness of procedures and quality of provider care are needed to help the medical community be more transparent in the ways in which to deliver care to patients," said Susan Pantely, consulting actuary for Milliman, Inc. "From an actuarial perspective, we're looking at the short- and long-term challenges and offering real-world solutions to help contain healthcare spending."

Pantely said actuaries will play a role in developing and evaluating cost savings approaches in the new healthcare reform law to determine if these measures reduce cost trends while improving quality.

"While there will be challenges in the healthcare system, one thing we know for sure is that in addition to increasing access to care, as a nation, it is important we also focus on ways to reduce costs while improving quality," she said.

Additional findings from the survey of healthcare actuaries include:

• 90 percent believe that reducing the number and severity of medical errors will help bend the cost curve downward.
• 88 percent believe that combating fraud and abuse within the system can be at least somewhat effective at bending the cost curve downward.

The SOA's online consumer survey, meanwhile, found that two-thirds support the actuaries' recommendations.

For instance, 37 percent feel they could better control their own healthcare costs if healthcare providers – or their insurance company – tell them about the costs of medical services and the quality of the outcome of procedures.

The same number feel they could better control their healthcare costs if, before administering a medical procedure, their physician informed them about the costs of the procedure, the number of times he/she has performed the procedure and its results.

However, there is some skepticism, as 39 percent of consumers feel there is nothing they can do to control their individual healthcare costs.

"It's clear that consumers are feeling helpless and want as much information about their medical treatment upfront, so they can make more informed decisions about their care and what makes sense for them financially, before it's too late and they're hit with unexpected out-of-pocket costs," said Ian Duncan, president of Solucia Consulting.

Ninety percent of healthcare actuaries, and 83 percent of consumers, believe that offering consumers financial incentives through their health insurance plan can be at least somewhat effective at helping them make better choices as patients and live healthier lifestyles.

"Financially incenting consumers to better manage their personal health is a valuable mechanism," said Duncan. "It can serve as a springboard for long-term health management and all-around healthier lifestyles."