To Find Health Care Cost Savings, Follow The Money. Or Rather, The Data.

Apr 11, 2014

It's pretty basic: in order to save a little money, most people have to stick to a budget. But before you can sketch out that spending plan, you need to know where your money's been going and how much you've been spending on everything. Then you can look for places to trim and skimp.

So too goes the theory with health care spending. Or at least, that's the idea behind several new efforts:

- Rhode Island is creating something called an "all payer claims database." The legislation to enable this passed in 2008, but it's just now coming to fruition, led by a coalition of government, industry, and policy folks. The idea is this: every single insurer, from commercial, private companies to public insurers like Medicaid and even the state's self-insured plan administrator are now required to send data from every claim, meaning every health care dollar spent in this state, to this new database. Individual Rhode Islanders can opt out, but I've got assurances from one of the project's leads, Lt. Gov. Roberts' chief of staff Jennifer Wood, that no personally identifiable information will accompany the data insurers send. It's just stripped down claims data, aggregated to help paint a clearer picture of what we're spending money on, where we might be able to focus efforts to trim costs, how costs compare across diseases, locations, populations, etc. 12 other states have these databases. It's an exciting step towards getting a better handle on not only what our health care spending looks like but also on what's making us sick and helping us get better.

- The Centers for Medicare and Medicaid Services released a trove of data this week on what it pays doctors for providing services to Medicare patients. It'll be fascinating to see how the data gets sliced and diced and what trends and surprises emerge. In the meantime, be wary about diving into the data yourself unless you have some context. Some doctors may seem to have gotten paid a boat load, but there may be more than one practitioner billing under that doctor's ID, or he or she may have a particularly sick patient mix, etc. Charles Ornstein of ProPublica does a great job covering the caveats as well as the other tools out there for helping people learn more about their doctors. The bottom line for me is that cost data means very little without quality data, and that's a whole other ball of wax. What you could begin to find in the data, however, if you're adventurous, is what kinds of services your doctor performs and whether he or she performs more or less of a particular kind than his or her peers. That could tell you something about your doctor's approach to caring for patients with certain conditions and whether that approach is consistent with others or an outlier.

- And finally.... the deadline for doctors to switch to a new medical billing code system, called ICD-10, has been delayed. They're stuck, for now, with the previous iteration, ICD-9. What the heck does all that mean and why should you care? Well, it has to do with how specific your doctor can get about your condition or treatment when it comes to billing your insurance. ICD-9 has about 4000 different codes for all kinds of health issues. ICD-10 about 72,000, according to this great piece from NPR's Eric Whitney. The more specific the information doctors and health insurers and others have, the more easily they can analyze that data for trends. What treatments are working well? Which are costing too much and not delivering good outcomes?

So, lots of data is being unleashed, or about to be unleashed. Now the question is: can we use it to help deliver higher quality, lower cost health care that everyone can access?