Home > Employee Benefits > More all-payer claims databases could mean more transparency

More all-payer claims databases could mean more transparency

computers_techOver the past several years, many states have begun using all-payer claims databases (APCDs) to help create more  transparency throughout the health care industry. Similar to the Health Care Cost Institute’s new online consumer health care portal, APCD’s are designed to shed light on the price differences that various health care providers (doctors, hospitals, health care systems) charge for the same procedures. They require all commercial insurance carriers within a state to submit claims data and prices paid for services, and typically include medical, dental, pharmacy and mental health claims from all providers in the state. The data uses codes (rather than individual names and addresses) for privacy protection about specific patient claims, and business claims are kept private by providing only the median prices paid to providers for each service. The information helps consumers make decisions about where they go for treatment, and can also be used by insurers and large employers to design cost-effective benefit plans. In addition, state officials have used APCD’s to help develop health care policies and measure results. Eleven states (including Massachusetts) already have these systems in place, while 19 are currently developing APCD’s and another 21 more have introduced laws to create them. 

Despite the rise in use of these systems, some critics question whether they are worth the time, money and effort required to collect and analyze so much data. Others say it makes more sense to use national standards that can compare claims information across all states, rather than having each individual state collect data in separate databases. On the other hand, supporters argue that consumers, employers and providers have the right to know about the price and quality of services data, especially when costs variances are so high. According to claims data from the National Institute for Health Care Reform comparing the cost of a joint replacement at 36 different hospitals across the country, prices for this procedure varied from $17,000 to $35,000.  Knowledge about these kind of price disparities helps consumers when they are deciding where to go for treatment.

Regardless of how claims data is collected and analyzed, by each individual state or on a national level, the creation of APCD’s and other online health care portals demonstrates the industry’s movement toward encouraging consumer understanding and awareness about the quality and price of their care. The data offers public access into the negotiations between insurance companies and providers over costs for services. As health care reform continues to unfold, the use of tools that enable industry transparency will continue to be influential and should be monitored closely.


About the Author

Alyssa Martin is a Vice President at William Gallagher Associates, providing proactive service, effective decision-making and advanced problem-solving capabilities to a number of national clients in the mid-sized to large markets. She also works with clients to assist their employees with their individual Medicare choices as they are approaching retirement.

617.646.0350 | amartin@wgains.com | Connect with Alyssa on LinkedIn |
Follow Alyssa @Alyssaamartin
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