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Time for an All-Payer Claims Database in CA?

[The following post was written by Erica Brode, ITUP intern.]

Recently, one of my health policy professors complained to her primary care physician about serious discomfort in her knee. Her doctor referred her to an in-network orthopedic surgeon who performed a MRI and then referred her to the in-network hospital for surgery earlier this week (which was successful).

Fortunately, my professor is covered by an HMO through her employer, UC Berkeley. Because she had no co-payments or other out-of-pocket expenses, my professor never thought to ask about the prices associated with these services. And even if she had asked, she probably would never find out since that sort of information is not available to the public and it is doubtful that even her physicians know.

Such lack of transparency is a common occurrence in our health care system. However this could all change if California invests in an All-Payers Claims Database (APCD). An APCD is a database created by state mandate that typically includes claims data derived from medical, eligibility, provider, pharmacy and or dental files from private and public payers.

Benefits of an APCD

With access to such information, public health workers could allocate resources based on the geographical distribution of disease. Employers could use the data to further their health promotion programs. And, consumers can see who provides a certain service in their area and how much it would cost.

Although originally developed for policymakers and academics, such a database allows transparency to all levels of the healthcare system from the payer to the consumer. Already implemented in other states, information in APCDs has been used in price negotiations between payers and providers without any impact on overall healthcare costs.

Opportunities & Challenges

On March 24th, Patrick Miller from the University of New Hampshire Health Policy Institute and Jonah Frohlich from Manatt Health Solutions Consulting Firm gave a briefing on APCD implementation in other states and spoke to the feasibility of launching this type of database in California.

Miller and Frohlich noted California’s unique challenges and its differences compared to the other states currently implementing APCD. California is much larger and has 300+ medical groups that would all have to provide separate claims data. There are also questions of whether the APCD would be governed by the state or a non-profit organization, whether the reporting would be mandatory (like most states) or voluntary (like Washington and Wisconsin), and whether an APCD would conflict with any California-specific privacy legislation.

One of the biggest roadblocks in California is money. Given our current economic environment, it is unlikely that our state would be able to fund this kind of project. However, other states have had success raising the necessary funding by assessing a fees on plans or providers based on market share, imposing fines for not reporting, creating data access fees, or working with the federal government to gain a grant or Medicaid match.

Although many states have already implemented similar APCDs, California is squarely in the “strong interest” category. While not currently on the legislative agenda, this type of transparent, consolidated database might just be what the doctor ordered for California’s healthcare system. An APCD would supply important information for Pay‐4‐Performance reimbursement systems and quality reporting initiatives, as well as efforts to establish medical and health homes. One particularly interesting opportunity for California would be the potential for an APCD to help the very important risk adjustment efforts in the California Health Benefit Exchange come 2014.

For more, you can view a video of Miller’s and Frohlich’s March 24th discussion, and download PDF versions of their presentations.