Continuation of Research on Consumer Directed Health Plans: Does Access to Transparent Provider Quality and Cost Information Affect Health Care Cost and Utilization of Preventive Services?. Literature Review


The Internet has the potential to lower the costs of distributing information to consumers. The Internet also provides a dynamic interactive medium where the consumer can seek specific information on a topic. With regard to health care, while the value of the Internet for seeking health information has been documented by Baker, Bundorf and Wagner (2003), it is unknown whether consumers understand the information they receive, gain knowledge as a consequence, and take action from this knowledge.

Health care costs have increased for decades. The recent promotion of transparency of health care cost and quality information by President Bush is intended to provide information to consumers that would be difficult to obtain systematically and objectively. The provision of this information is the foundation of the recent CDHP initiative as well as the goal of developing a national health information technology infrastructure. To support the transparency initiatives, private and public insurers recently have developed and distributed tools to inform consumers about health care quality and cost. For example, Medicare’s Hospital Compare project disseminates web-based hospital performance measures collected as part of its reimbursement incentive program.

One of the key technologies enabling provider transparency initiatives is provider profiling. Provider profiling is a proven technology that is nearly twenty years old. Motivated by Wennberg’s discovery of small-area variations in providers’ practice styles (Wennberg and Gittlesohn, 1974), early use of the technology has been credited anecdotally with helping to make early physician-led managed care organizations solvent by the mid- to late-1980s. In 1992, a national conference of policy makers, academics and health plans agreed on the widespread use of the technology to contain health care costs (PPRC, 1992). Recent innovations and policy initiatives have reinvented provider profiling. The push for health care price and quality transparency is driving public and private insurers to use redesigned provider profiling tools. New metrics for measuring quality have been created by the National Committee for Quality Assurance (NCQA, 2007) and the Agency for Healthcare Research and Quality (AHRQ, 2007). In addition, pharmacy-based quality measures have been developed for pharmaco-economic studies. The eventual addition of clinical data from a national health information technology infrastructure will increase the quality of the tools even more.

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