All-payers claims databases can move healthcare forward

When I meet with policymakers to talk about healthcare, I remind myself that it is much easier to address the myriad of problems plaguing treatment and care delivery methods than it is to define the solutions. There are no quick fixes, and oftentimes the free-market ideas we propose are complicated and controversial. 

That is certainly the case when we talk about the critical importance of all-payers claims databases (APCDs), which have proved to be valuable resources for all healthcare purchasers. APCDs give us a broader set of data to compare performance and cost between providers and care settings – a cornerstone of free market healthcare that could make a real difference in the prices we pay for healthcare services. 

Read more: Regulations are holding up access to high-value healthcare

At their most basic level, APCDs are exactly what they sound like. They are incredibly large databases that collect medical claims, insurance eligibility and provider files from health plans, including Medicare and Medicaid. APCDs also may include data from self-funded employers and state employee plans. Because the data is plan sourced, it covers the whole spectrum of care delivery, including claims from inpatient hospitals, outpatient hospitals, long-term care facilities, independent physicians and clinics, pharmacies and ambulatory surgery centers. Many APCDs also purchase tools, such as groupers and risk-adjustment tools, to standardize data for use by healthcare stakeholders.  

Right now, APCDs are mostly created by states, although sometimes they are borne out of private-public partnerships. As an organization that purchases care on behalf of 340-plus employers, we use the Wisconsin Health Information Organization (WHIO). This APCD enhances our own data and the information we collect from other sources to identify providers delivering the highest value healthcare. WHIO helps us evaluate and compare the effectiveness, quality, and total cost of care delivered in various settings across the state, not just within our own population. 

Fitting in with transparency regulations 
Price transparency is foundational, but it is not enough on its own to inform high-value healthcare. For example, identifying a lower unit price for knee replacement surgery is important, but it does not necessarily translate into higher value if outcomes are poor or ancillary services delivered alongside the knee replacement are more expensive. 

Read more: Incentive payment is critical for value-based purchasing

Today, the federal government requires both hospitals and insurers to disclose their negotiated prices, otherwise known as “allowed amounts.” Unfortunately, these files are simply not actionable for consumers on their own. It takes at least one other entity (and likely more) with data expertise to be able ingest the data and make it usable. To realize the true benefits of transparency, employers are undertaking a multi-step process to ultimately put the data to work and drive care to high-value providers when possible. 

The first step in this process is an analysis of what drives costs within the population served. In our case, that is employees and their families. Then, a second analysis identifies the highest-value providers available to serve those specific needs, which will differ from one employer to the next. That is where APCDs come in to help identify those providers using data from other payers to supplement the data specific to the plan. Then comes a strategic network configuration that supports high-value care delivery and payment. 

Beyond those first steps, many employers are building trust with their employees through the creation of onsite or shared-site clinics staffed with independent healthcare providers. Employers are arming their clinic staff with data to make referrals to independent specialists, health systems and ambulatory surgery centers that are delivering high-value care. Of course, plan design is also critical to align incentives for employees and their families to choose high-value providers. 

Read more: Are employers picking affordable healthcare benefits?

This multi-step process may seem daunting, but employers that have made these investments have realized considerable savings in their health plans. Many have been able to hold employee health premiums steady for five-plus years while actually lowering the cost of healthcare for employees and families. 

In other words, price transparency is critical, but we also need objective data sources and the flexibility to create smart plan designs that support steerage. We need resources for care navigation. It takes all these pieces, plus a market where choices exist, to achieve better healthcare for Americans at a more affordable price. 

Is there an APCD in your state? 
The national APCD Council website includes a helpful map of the current state of APCDs around the country, a description of the data each APCD collects and how the database is managed. If you review this information, you will notice that APCDs differ considerably from state to state, each having their own data formats and rules for accessing data. 

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This makes it difficult for multi-state employers to use APCDs to their fullest potential. And new APCDs generally have to start from scratch, duplicating investments others have already made. Even so, states are increasingly investing in APCDs for the benefit of lowering costs for state employee plans and Medicaid programs, and to support other healthcare purchasers. 

But there is a better way. Legislation introduced at the end of the previous congressional session (HR 9644) would establish an easily accessible national APCD while providing support to existing and future state initiatives. A national APCD would result in a robust dataset, which would give states, purchasers and researchers the objective data they need to paint a comprehensive picture of the state of healthcare in this country.

As I mentioned, many ideas to “fix” healthcare are controversial, and the notion of a national APCD has its detractors. There are many industries that benefit financially from the status quo and our health system’s opacity. Hopefully, policymakers asked to fight these battles will side with consumers since they are the ones paying higher prices and higher taxes to perpetuate a system still shrouded in secrecy.