Washington’s Consumer Database On Medical Costs Faces Fiscal Challenge

Washington's Consumer Database On Medical Costs Faces Fiscal Challenge
If Washington state's All-Payer Claims Database can become fiscally self-sufficient through sales of premium information products, consumers in the state will enjoy free access to comparison shopping data for medical procedures. Photo: Swedish Medical Center

As Washington state prepares for the fall 2017 launch of its public-facing database on comparative costs and quality of different medical procedures, some of the 12 other states that have already done so are sharing lessons learned on how to ensure utility and solvency.

APCD Could Provide Value, Broadly

The systems are called all-payer claims databases (APCDs). They allow consumers to shop knowledgeably among different medical providers, and can help employers save money by choosing the right health care plan for workers.  As well, medical facilities can adjust their prices competitively and insurers can use data on claims paid across the board, to tweak their plans’ offerings based on market needs.

In Washington, state law requires the APCD be fiscally self-sufficient. The state Office of Financial Management (OFM) will be working with expert contractors to meet that stringent requirement.

Oregon Health and Science University (OHSU)’s Center for Health Systems Effectiveness (CHSE) will run the database. Currently, it is funded through start-up grants and will primarily rely for revenue on premium data fees paid by employers, insurers, providers, and researchers.

Paid Data Products Must Attract Buyers

“It’s been a concern…that they are going to be dependent on selling the reports,” State Sen. Randi Becker (R-2) told Lens. She is Chair of the Senate Health Care Committee. The pay-to-use data “has to be more valuable to the folks qualified to access it.”

“There’s no specific funding mechanism now and it’s hard for me to understand how it will be self-sustaining,” said Dr. Roger Stark, Health Care Policy Analyst for the Washington Policy Center. “I don’t think [the legislature] is going to pass legislation to fund it. You could put a user fee…but it’s my suspicion if you did that, then there would be very few that would want to use it.”

State Rep. Eileen Cody (D-34) is Chair of the House Health Care and Wellness Committee. She said CHSE should draw from the approach of the Washington Health Alliance, which “has had such a history with working with employers, providers and insurers” to harvest actionable data. The Alliance works to boost transparency, control prices, and empower health care purchasers and consumers. “[The center] is now going to have to “continue that same work, keeping everyone involved so they know what product is needed,” Cody said.

Lessons Learned From Other States

APCDs around the U.S. underscored to Lens the importance of collaborating with potential data purchasers, and finding a healthy balance between free and paid information.

Colorado’s APCD is partially funded through grants from funders who also benefit from using the data, and revenue from licensing fees for more in-depth data. That’s according to Cari Frank, Director of Communications for Colorado’s Center for Improving Value in Health Care. Colorado’s database is “on a path towards self-sustainability,” she added.

There is a value in insurers “seeing themselves compared to others in the market,” said Frank. “I think more hospitals and provider groups are using data to negotiate rates and they will want to get this information” before bargaining starts.

‘A Lot Of Work To Do In Educating Employers’

Colorado’s APCD has not received as many data requests from employers, according to Frank. “It’s hard to engage employers…[they] don’t understand they have the ability to make change in healthcare. There is a lot of work to do in educating employers to determine what their role would be…hospitals are different, they understand they can use this information to make changes to the way they are providing care, or charging costs, to be more competitive,” said Frank.

Utah’s APCD is funded under an allocated budget for multiple projects within the state health department’s Office of Health Care Statistics (OHCS), according to Director Norman Thurston.

Marketing and fiscal strategy matter. “It becomes a challenge if you make the public-facing tool so robust it would answer anybody’s questions,” said Thurston. “By law, we produce pieces of information useful to the general public, but they are not so comprehensive or so complete” that paying customers would not be able to find another, higher level of data products.

One Emerging Market: Consultants To Medical Providers

Thurston’s colleague Kellie Furman, Contract and Project Manager for Utah’s OHCS added, “I would have thought that employers would be interested, especially big employers,” but the state’s APCD has not yet pitched the value proposition to them. Furman added that insurers have also “been slow on the uptake from our perspective,” but there is a growing customer base among consulting enterprises, advising physician clinics and hospitals.

Important to consider for any APCD is identifying those who will be using the data and making sure the organization running the database can connect with that market, Thurston added. “We like to think of this in a business sense, you have to start with a quality product. The APCD data that one collects has to be the right data, has to be clear…timely….complete,” said Thurston.

If Washington’s APCD will not have access to legislative appropriations, CHSE has to “make sure the revenue model from the rest of users would create enough of a surplus to keep everything running,” said Thurston.

In Minnesota, the database receives an annual legislative appropriation and uses federal grants to cover operational costs, according to Stefan Gildemeister, Director of the Health Economics Program for Minnesota. The state’s APCD is entirely public access, with no paid data products.

Price Comparison Data Key

“What we hear from the current public file-use community…there is a large part of them saying the summary data is not helpful…what folks want to know is: what is paid for each procedure and where they fall into comparison with the market,” Gildemeister added.

Roger Tubby, Director of Data Management and Analytics for Vermont’s Green Mountain Care Board, said the APCD data should include quality measurements such as how a diagnosis is being treated by different providers, and patient recovery and readmission rates.

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