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February 10, 2014

Can a powerful database improve health outcomes and slow costs?

LeArchitecto; shutterstock.com
HBJ Photo | Matt Pilon Tamim Ahmed, executive director of Access Health Analytics, is the face of the committee juggling concerns from insurers, hospitals, consumers and public health advocates over how a massive trove of insurance claims data will be used to improve the state’s healthcare system.
By Matt Pilon

Later this year, Connecticut plans to catch up with most of New England when it launches a database containing health insurance claims records of nearly every patient in the state.

The depositing of the virtual reams of data into a so-called “all payer claims database,” or APCD, will give the state access to more health information than it's ever had in a single place.

The database is a key part of the state's efforts to rein in healthcare costs and improve care quality by shedding light on who's getting medical treatments and where, how much services cost, who's paying the tab and whether providers are following best practices for treating diseases.

Consumer advocates hope the database will eventually give healthcare purchasers, including businesses, the ability to compare hospital and physician costs and quality outcomes.

But it's not clear if that will happen. Insurers are demanding that information on what they pay individual medical providers be kept secret, which could diminish the database's usefulness, consumer advocates say.

The divergent viewpoints reflect the difficulties Connecticut, other states, and the nation have in introducing price transparency into the healthcare system, which many experts believe can help slow healthcare spending.

That's particularly important in Connecticut, which has the third highest healthcare costs in the country, making it more difficult for companies to do business here.

Price Transparency

Connecticut's APCD will be housed within Access Health CT, the state's insurance exchange created under the Affordable Care Act. The exchange hired Tamim Ahmed in August to oversee its analytics division, which is charged with launching the APCD by September.

During a recent interview in his downtown Hartford office at 280 Trumbull St., Ahmed said part of the APCD's goal is to chip away at a long-assailed aspect of the fee-for-service healthcare system.

“A market exists when buyers and sellers have enough information to recognize if a bargain is fair or not,” Ahmed said. “This is not present in the healthcare market because people do not have enough information about the cost or quality of care.”

Ahmed, who previously worked in analytics roles for Aetna, United Healthcare and others, shares the view that price secrecy can lead to higher costs. But in Connecticut, insurers are a major employer with political muscle, and they're trying to restrict certain pricing information from becoming public.

The trade group that lobbies on health insurers' behalf, the Connecticut Association of Health Plans, has asked Access Health to forbid administrators from publicly releasing data that reveals what they pay hospitals, doctors and other health professionals. Instead, insurers want more generic data to be made public, like the median cost of a CT scan at a given hospital for all insurance plans.

“While the intent of the [APCD] is to promote open information to [Connecticut] consumers this activity could lead to adverse effects on overall market competition that is not in the interest of consumers, and will threaten the state's efforts to achieve the health care cost benchmarks it most likely wants to accomplish,” the association's lobbyists wrote in a September letter to Access Health CT.

Trade Secrets

Keith Stover, an insurance lobbyist who co-authored that letter, said insurers believe the value of the APCD lies in analyzing broader trends, not in direct cost comparisons, which could lead to collusion among medical providers. That would ultimately drive up healthcare costs.

“I will tell you quite frankly that I think some advocates for this have dramatically oversold that component and should be looking toward what the macro-level data can tell us about health status and particular sorts of diseases and what treatments seem to work,” Stover said.

Ellen Andrews, executive director of the consumer-focused Connecticut Health Policy Project, said she doesn't buy that argument.

She said the the strongest tool the state has to slow healthcare costs is to open up pricing for all to see, including rates insurers negotiate in their contracts with doctors and hospitals.

That was, after all, one of the original purposes of the database when it was created by state lawmakers in 2011, she said.

“The intention of this thing has really been twisted,” Andrews said.

Asked how Access Health's rule-writing process will balance the push for transparency with insurers' competitive concerns, Ahmed admitted that claims data may not offer the sorts of cost comparisons some might find useful.

Rules for exactly what information will be publicly available are still being decided, he said, and the state is taking seriously insurers' concerns about transparency leading to price collusion among providers.

“We do not want to disadvantage the carriers in the sense that they are giving us the data, but they also have trade secrets,” Ahmed said.

For the APCD to avoid a rocky start, Access Health will need the continued cooperation of insurers, whose analytics teams will be asked to adhere to specific data submission formats and timelines, Ahmed said.

Meanwhile, doctors and hospitals have their own concerns about how quality will be measured and assessed. But their data won't be piped in for at least a few more years, as the appropriate technical infrastructure is not yet in place, Ahmed said.

Even if specific pricing data isn't available, Ahmed and others say the APCD will still be useful. Academics, analysts, state agencies and others will, for example, be able to break down the data — scrubbed of personal patient information — to evaluate the effectiveness of alternative payment models, such as accountable care organizations, and better understand cost and heath disparities trends.

The hope, officials say, is to identify things like best practices in hip and knee replacements, or to pinpoint overuses of radiation and other treatments.

One of the biggest beneficiaries could be the state itself, which budgeted nearly $1 billion for its employees' health benefits last year. Giving administrators a way to data dive into how tweaks to the plan's structure are working could be valuable, both for slowing costs and improving quality, Comptroller Kevin Lembo said in September.

Officials in other New England states said APCDs offer policymakers the best set of information they've had yet to analyze healthcare trends. But they are not necessarily a panacea for reducing costs.

In fact, few if any claims databases have proven to significantly curb rising healthcare spending, said Jo Porter, a co-chair of the New Hampshire-based All Payer Claims Database Council, who has advised dozens of states looking to launch medical claims databases.

Porter said she views APCDs as a tool in a toolkit.

“Wouldn't it be great if we thought the implementation of this database would be the be all and end all to solving the healthcare cost problem?” Porter said. “But certainly, we're not that fortunate.”

David Newman, head of the Health Care Cost Institute in Washington, D.C., said he agrees the data is useful, but that lawmakers, medical providers, employers and other stakeholders who spend significant money on health care will ultimately have to analyze the information and make policy and organizational decisions based off of it.

“Data can inform decision making and direct inquiry, but it doesn't necessarily give anyone an answer on what to do,” Newman said.

Read more

Insurers bet on medical cost transparency tools

Database Debrief

Connecticut's all payer claims database is set to launch in September, giving the state access to more patient health information than it's ever had in a single place.

Here's a quick overview:

Where does the information come from?

The pool of data contained in the APCD will come from paid insurance claims records, as well as from the U.S. Centers for Medicare and Medicaid Services. Down the road, officials hope to pipe in data from providers' patient charts. It will include dental, medical, and pharmacy claims.

Who can use the information?

The specific rules are not yet written, but hospitals, insurers, state agencies, news media, analysts and nonprofits will likely be able to request and receive data, depending on how they intend to use it. A yet-to-be-formed committee will oversee all requests.

How is patient privacy protected?

The APCD and its data vendor will be required to scrub from the records any details that could identify an individual before releasing it to a requester. The federal government offers detailed guidance on how to best “de-identify” data sets.

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