Physician Focused Price Transparency: Raw Medical Claims Data: The Wrong Measurement To Control Cost

Stanley Feld M.D.,FACP,MACE

The real problem with raw medical claims data is that it will be misleading to the public. Its use will not measure the quality of medical care accurately.

In the meantime “Health insurance premiums up 6.1%, fast outpacing inflation and wages”.

During a recent lecture a physician asked me why are healthcare insurance rates rising at such a rapid rate and I have not received a reimbursement increase in 8 years? The answer is simple. All the other stakeholders are increasing the cost of healthcare.

I have discussed price transparency in detail. The error in using raw medical claims data is it is creating another false hope. It will not reveal overhead costs of the healthcare insurance industry or the actual costs for the delivery of care by hospital systems. Other sources are available to reveal hospital system charges and reimbursement. We do not have a way to evaluate hospital system costs. We have mentioned the $11 aspirin built into hospital charges, the one million dollar plus annual salaries of hospital administrators, the ten million dollar plus annual salaries of healthcare insurance company administrators. These numbers increase each year without explanation or analysis of its impact on the cost to the healthcare system. We must demand the analysis of these costs.

“These data are not so transparent and certainly not beside the point. Real healthcare data is hard to find and define.
Everybody wants a clear view of the cost and quality of healthcare. But defining this “transparency” is not an easy task. It is a task that physicians, insurers and the federal government continue to struggle with. These days there’s a lot of talk about making the cost and quality of health care more understandable to patients. But this transparency, like beauty, is in the eye of the beholder. While physicians and insurers each express support for transparency, there is a battle over what measures and techniques should be used to achieve it. Even the definition of price transparency is in flux.”

“ There is a concern among physicians that without physician clear direction and input, transparency initiatives aimed at the physician might mislead patients into thinking that healthcare insurance plans are paying doctors more than they actually are and that physicians are overcharging. Physicians also worry that plans are not using the correct and most complete information to rate quality, thus misrepresenting doctors, particularly those who take high-risk cases.”

In the discussion of medical claims data the real issue of the increase cost to the healthcare system is avoided. Remember, eighty percent of the healthcare dollars are spent on treating the complications of chronic disease. Neither insurers nor the government adequately do anything to support the prevention of chronic disease. Let us suppose the insurers did support the prevention of the complications of chronic disease. The additional monetary support would lead to the development of innovative techniques to prevent the onset of chronic disease.

Patients need to work hard to prevent the onset of chronic disease. Patients with a chronic disease have to be taught to be the “professor of their disease’ and work hard to prevent the onset of the costly complications of chronic disease. This can be done with the aid of their physician assuming he has the economic incentive to help the patient manage their chronic disease. These educational processes are not adequately supported economically at the present time.

Patients are ultimately responsible for their lifestyle behaviors. Patients are not doing a good job preventing chronic disease or the onset of the complications of chronic disease. Obesity is at the root of precipitating many chronic diseases, yet obesity in America is growing at an alarming rate.

Are patients to blame for the obesity in America? The answer is they are partly to blame. However, they are bombarded with external stimuli that promote obesity. My solution to obesity in America is for congress to pass a farm bill that does not subsidize mega farm corporations for producing harmful foodstuff. If congress passed a farm bill that banned the use of corn, corn products, soy and soy products as well as sugar and sugar products in food and shifted its foodstuff use to produce oil we would go a long way to solve America’s obesity problem as well as our dependence of foreign oil. I would also subsidize public education through public service campaigns to promote healthy food intake, increased exercise and healthy lifestyle changes. The public is needs this information. It broadly support the megavitamin and supplement industry in an effort to promote its good health.

Neither the insurance industry nor government supports programs that enhance compliance or adherence to medical therapy. Innovative programs rewarding patients are relatively easy to construct if industry and government would support these programs. Nationally, patient adherence to medical therapy is about 50%. Wal-Mart’s generic drug program has gone a long way to increase the affordability of drug therapy and increase adherence.

The issue of transparency and raw medical claims data can now come into focus as being inadequate to judge the quality of the therapeutic interaction. We are only going to reduce the cost of healthcare if we decrease the complications of chronic disease and not by evaluating quality medical care inaccurately.

This is going to take co-operation of all the stakeholders. The way to motivate patients to control cost is to have them own their healthcare dollar and provide incentives for them to use those dollars wisely. If we took the steps outlined much of our healthcare costs would decrease and the health of the nation would increase.