Toward Full Transparency of Health Care Costs

  Posted by: David Morales, Commissioner, Division of Health Care Finance and Policy

Health care costs are a critical issue facing the Commonwealth as individuals, families, and employers, as well as state and local government, are all struggling under the weight of high and rapidly rising costs of health care.  Without immediate action, economists estimate that the proportion of family income devoted to health insurance could rise to more than a third of median family income by 2016. This trend is unsustainable and underscores the need for immediate action in order to change this trajectory.

A little-noticed initiative is unfolding at the Division of Health Care Finance and Policy that will help to better inform businesses and consumers about health care costs and help them to understand what medical services cost and how much we pay for them in Massachusetts.  The Division is required by law to develop a robust health care claims database, which would offer full transparency.

Today, the Division will propose draft regulations to collect – in one central database – all inpatient, outpatient, pharmacy, and dental claims from fully-insured and self-insured health plans, Medicare, and Medicaid sources.  For the first time in the state’s history, this all-payer claims database – or APCD – will offer like never-before, a broad understanding of health care costs and medical service utilization across institutions and populations. 

Essentially, the APCD will serve as a clearinghouse for comprehensive quality and cost information that will help consumers, employers, insurers, and government have the necessary data to make prudent health care purchasing decisions; and in that way help to lower costs by encouraging them to use high-quality, more efficient providers. 

An added benefit of an APCD is that it would help to lower administrative costs for both government and insurers because it could serve as the central point for all health care claims.  Today, multiple agencies make routine requests of such data and drive up unnecessary administrative costs that in turn add to the cost of premiums.

Lastly, the APCD will serve as a valuable resource for researchers and other private sector organizations who seek to develop efficient, innovative ways of delivering health care in low-cost, integrated settings.

As we prepare to hold public hearings in late spring, we welcome your participation, questions, and comments. For more information about the APCD public hearings, please visit www.mass.gov/dhcfp, subscribe to our electronic mailing list by emailing dhcfp.newsletter@state.ma.us, or follow us on Twitter at www.twitter.com/masshealthcare.

Comments

[Patrick Long]

In the post you say, "Today, multiple agencies make routine requests of such data and drive up unnecessary administrative costs that in turn add to the cost of premiums."

Can you tell me what those agencies are and why they would be requesting it?