Sunday, May 26, 2013

What price is correct for transparency?

As noted previously, the Massachusetts legislature has entrusted the handling of the all-payer claims database (APCD) to a new independent state agency, CHIA (Center for Health Information and Analysis) which has issued proposed regulations concerning the availability of the data.  Among the issues CHIA had to decide was what fee, if any, to charge for access to the data and the terms under which someone can request a waiver. Those regulations are here.  Here is an excerpt:

The proposed fees reflect the cost of systems analysis, program development, computer production, vendors’ fees, consulting services and other costs related to the production of any requested data. The proposed fees are based upon four factors: (1) the type applicant requesting the data; (2) the type and number of data files requested; (3)the data elements requested; and (4) the number of years of data requested.  The Center may reduce or waive the applicable fees for qualified applicants. 

The Massachusetts Hospital Association recently filed complaints about some aspects of those regulations:

When CHIA released its initial proposed APCD fee schedule in November 2012, a mid-size organization, such as a community hospital, would have had to pay as much as $39,375 for just one year of restricted data, which would be insufficient to study trends and analyze the impact of any interventions over time. Such a hospital would have to pay multiple times for the data it needs. Under CHIA’s new fee schedule, released this month, a provider organization requesting restricted data from all categories would have to pay $40,500. And while the proposed new fees were reduced for obtaining public, de-identified data, it would still cost a provider organization up to $15,000 for a single year/single use.

“MHA appreciates that CHIA significantly reduced the fees for researchers,” MHA’s Sr. Dir. of Managed Care Karen Granoff wrote in testimony in response to CHIA’s fee schedule. “Like researchers, providers have a legitimate need to access the data for all of the purposes outlined in Chapter 224, yet unless CHIA adjusts the fees and makes them more reasonable, it is unlikely that many providers will be able to take advantage of this resource.”

Granoff noted that APCD costs in neighboring New England states are significantly lower and she noted that hospitals already pay an assessment to fund CHIA’s budget.

“The proposed fees will discourage use of the data by providers at the same time that the state is trying to promote the use of transparency around care delivery and to encourage care coordination and a transition to population-based care delivery,” Granoff wrote. “It would be an unintended consequence if the Commonwealth’s multi-year, ambitious effort to control healthcare costs were to fail due to barriers to data access set up by the agency itself.”

I asked CHIA Commissioner Áron Boros if he would like to use this forum to respond to the MHA comments, and he kindly did so: 

As we consider adjustment to the fee schedule in light of the comments we received, we are conscious of CHIA's competing responsibilities: to defray the operational costs of the APCD while also maximizing its value by facilitating access to many diverse users. 

Over my term at CHIA, I am committed to continuously expanding the use of our data resources. Novel uses of public assets like the APCD hold the promise of accelerating improvements in cost and quality in Massachusetts. Fees are necessary part of the investment needed to support this future, but I welcome all thoughts on how to ensure such fees are appropriate.

Having served in fee-based agencies, I am acutely aware of the trade-offs facing CHA.  If it incurs direct costs in serving requests for data and does not have a state appropriation to pay those direct costs, the fees it charges must be compensatory for the work needed to satisfy the requests.  To the extent it waives fees, it would be required to add those amounts to the fees paid by others.  If there is a broad public interest--as here--in making data broadly available to those with insufficient resources to pay the direct costs, it turns to the Legislature and Governor to make those funds available.

In this instance, though, perhaps the rules could be read to mean that the MHA--a voluntary, not-for-profit organization with a strong emphasis on education programs--could make a single request on behalf of a group of hospitals who would share the data, reducing the cost for any one institution.


Barry Carol said...

This has to be one of the most glaring examples of penny wise and pound foolish that I’ve seen in awhile. How much does it cost per year to operate the CHIA and how much is spent on healthcare in Massachusetts each year? True price and quality transparency can play a critical role in enhancing competition in MA and making it much easier for both patients and referring doctors to quickly identify the most cost-effective high quality providers and steer their business to them. If I were the governor or a member of the state legislature, I would view it as a no brainer to fund the CHIA with state revenue and allow it to offer its resources and services to anyone interested at no charge or, at most, a nominal charge. It seems like common sense to me.

Anonymous said...

Go Barry! I share your incredulity. I have yet to understand why on earth a year's worth of data for one hospital could cost 40K. Can anyone explain this in English?
Not to mention the fact that other states apparently also possess such databases. Why not get them all out there? As e-patient Dave says, gimme my damn data.

nonlocal MD

Anonymous said...

Not only are the fees outrageous but the legislature has backed out of funding CHIA at all and the assessment as it now stands in the budget is entirely borne by health plans, hospitals and ASCs. Yet the resource is a statewide policy imperative.

Barry Carol said...

It looks to me like the hospitals are using their political influence to keep this data as bottled up as possible. They apparently got their friends in the state legislature, with help from well paid lobbyists, to make the CHIA self-fund its agency with user fees. The result is often prohibitive cost for many parties interested in accessing and analyzing the data. This looks like another sad example of politics by and for the powerful.

In the meantime, I learned recently that the CEO of Mt. Sinai Hospital in Miami, FL agreed to start disclosing actual contract reimbursement rates his hospital receives from Aetna and the local Blue Cross insurer. He also challenged his nearby competitor, Baptist Hospital, to do the same though, so far, Baptist has declined. We need a lot more hospital CEO’s like Mt. Sinai’s.

Paul Levy said...

Interesting. Here they are subject to nondisclosure agreements. Also, I was always told that sharing my hospital's rates with competitor hospitals would violate antitrust rules. That's why I always hoped for state action on such matters.

Barry Carol said...


I learned of the Mt. Sinai CEO’s action from a post by Sarah Kliff on the Washington Post’s Wonkblog. While her post didn’t say so, I’m assuming that the hospital must have gotten a waiver of the nondisclosure agreement from Aetna and the local Blue Cross insurer. I also assume that the hospital contracts with other insurers as well but none of them were mentioned in the article.

I recently read that the original rationale for confidentiality agreements was to prevent price collusion among doctors and, presumably, hospitals. However, price transparency is routine, expected and taken for granted in every other area of commerce. I just don’t get why anyone thinks they are needed in healthcare especially as consumers are becoming more cost conscious as a result of higher deductibles and we (finally) want doctors to view knowing and caring about costs as an important part of their job. The cleanest way to fix this, in my opinion, is through federal legislation that outlaws confidentiality agreements between healthcare payers and providers.

Anonymous said...

The anti-trust threat was heavily bandied about when I practiced as a hospital-based physician, also. And yet when a true anti-trust situation arises as with Partners in Boston, the feds seem powerless. I concluded it was all bark and no bite. Now, it has become man bites dog since it is actually hindering price transparency rather than hindering market monopolies by hospitals.