Could Price Be Right?

If confirmed as Secretary of HHS, Tom Price will oversee a $1 trillion budget – roughly one-third of all health expenditures.  His proposed legislation “Empowering Patients First” seeks to control costs by giving patients more choices and providing the information required to make them. He calls for publicly available standardized information on the price and quality of physicians, hospitals and other health care institutions.

It sounds like Dr. Price is prescribing a single data system. 

Medicare has had a single data system on the over-65 population for decades.  Since 2005, these data have informed Hospital Compare, a consumer oriented website comparing the quality of over 4000 hospitals.  And while prices in Medicare are relatively fixed, these same data have shown substantial variation in costs because the quantity of service – the number of hospital admissions, procedures and physician visits – varies substantially from place to place.

But Medicare is only one piece of the data puzzle.  A National Bureau of Economic Research report[nber.org] added another piece last year with data from large insurance companies like Aetna and United.  For the under-65 commercially insured population, it’s not just the quantity of services that are all over the map – it’s also the prices. 

We all have an interest in a sustainable health care system: one that provides high quality, needed care at a cost that doesn’t bankrupt public budgets – or worse, individual patients.  We need to learn from those communities that have found the right balance.  Rochester NY, for example, is among the least expensive health care markets in the country, for both Medicare and commercial patients.

But the only reason we know this is because a few insurers have been willing to share some of their data with researchers.

Unfortunately, much health information is still hidden from view – behind a proprietary curtain of privately held data. We rarely get to peek under that curtain, as researchers did last year.   Mind you, it took a heroic effort and still they were only able to look at less than a third of the private insurance market.  More than two-thirds remains a black box. 

That’s no way to run a railroad.  You want patient choice to encourage a better health care system in the future? Then the first step is for them to know what’s going on out there right now.  We need a single data system.

A single data system would make both price and quantity more transparent.  That alone might have the desired effect of dampening some of the price/quantity extremes.  It could also save billions in administrative costs by moving to a single uniform insurance claim. Furthermore, it would provide the opportunity to explore who is delivering great care at low cost – both to help consumers make choices and all of us learn how to improve the system. 

And a single data system is important for more than just saving money.  It’s important for the quality of clinical care.  Right now it’s hard to know what happens when a new drug, new procedure, or new device is introduced into the system.  No one can see the complete picture since different patients have different insurers. Then patients change employers and get a new insurer or they don’t change employers, but their employer changes insurers.  Or their insurance company merges with another one.

It’s a mess.  It’s a system that not only can’t monitor costs – it can’t monitor safety, something every orthopedic surgeon, including Dr. Price, cares deeply about.  The United States has probably implanted more metal on metal hip replacements than any other country in the world.  But we can’t say for sure, since we don’t have a single data system.  But we can say one thing for sure: we didn’t learn that metal-on-metal hips are much more likely to fail from US data, we had to import that knowledge from the United Kingdom – a country with a single data system. 

Dr. Price’s legislation envisions state-based portals for consumers to get information.  But why make 50 states build 50 different data systems? Patients move across state lines; they might appreciate one stop shopping. More importantly, so do insurers.  Four insurance companies – Blue Cross, Anthem, United and Aetna – now comprise of three-quarters of the national private insurance market.  That they would prefer a single uniform reporting requirement over 50 disparate requirements would seem to be a safe bet. 

We hope Dr. Price does the right thing: construct a single data system – so we can all know how our health care system does, and doesn’t, work.  

Dr. Welch is professor of medicine at the Geisel School of Medicine and author of “Less Medicine, More Health”.  Dr. Fisher is the Director of the Dartmouth Institute for Health Policy and Clinical Practice.

Categories: Uncategorized