America is on the brink of an unprecedented transformation in the use of health care data to improve the delivery of care and its cost. So it is shocking to see Minnesota lawmakers behaving like Luddites and constructing barriers to the use of state held data to “pull the veil back” on health care price and quality. Let’s look more carefully at what the state Senate is considering in SF 1818 in the light of broader national trends.

For the past several years, the Centers for Medicare & Medicaid Services (CMS) has been lauded for its efforts to liberate Medicare data for research and public reporting. In May 2013, CMS released, for the very first time, billing data for the 100 most common conditions treated under Medicare. In April 2014, CMS released data on the tests and procedures performed by more than 800,000 providers in 2012.

CMS describes the Medicare claims data as a “national resource” that will “spur the innovation necessary to … improve the health of the population.”

Finally, the Affordable Care Act (ACA) created the “qualified entity program” to allow independent groups to use commercial and Medicare claims data to profile individual providers and suppliers in an effort to spur better performance.

A similar transformation is taking place among enlightened commercial insurers who see the benefit in promoting greater access to claims data to shed light on prices and quality. In 2011, Aetna, Humana, UnitedHealthcare and Kaiser Permanente created an independent nonprofit, the Health Care Cost Institute (HCCI), to hold their claims data for public reporting and research. In 2014, Assurant Health joined this initiative. (Full disclosure: both Drs. Parente and Newman are associated with HCCI.)

In February 2015, HCCI launched Guroo.com, a national price-transparency initiative that initially offers reference prices for 78 services in some 340 metropolitan areas, including Minneapolis, Rochester, Mankato and St. Cloud. In subsequent releases, HCCI will be adding more prices and more locations. Guroo, a free site, could be a game-changer when it comes to price and quality transparency. Several states are talking to HCCI about the possibility of partnering to use the states’ all-payer claims databases to power transparency in those states.

But as the world marches forward toward the light, attempting to pull back the veil, the Minnesota Senate is attempting to quarantine this state’s all-payer claims data set such that its potential value will never be realized and never become the “state’s resource” to spur improvements. S.F. 1818 prohibits the identification of individual payers, providers, hospitals or clinics. As the legislation is written, if the state’s all-payer claims database contained Medicare, Medicaid and commercial claims, distinguishing data based on whether claims involved a state payer (Medicaid), a federal payer (Medicare), or a commercial payer (even aggregated), would be prohibited.

While the bill nods in the direction of supporting analysis at the geographic, community and population level, many communities do not have competing hospital systems or specialist provider groups, so effective analysis even at these levels may be difficult. Moreover, it is generally understood that prices vary more within markets than across markets, so studies of small markets, prohibited by S.F. 1818, are key but here are prohibited.

In pursuing S.F. 1818, the state is hampering its citizens’ access to greater price transparency, since S.F. 1818 would prohibit the state from sharing its data, even without patient data attached, with initiatives like Guroo. It would even prevent the state from pursuing its own transparency initiative, as some states are contemplating.

S.F. 1818 is poorly conceived, backward-looking and will restrict the types of analysis that need to be conducted to effectively reform the health care system in Minnesota. The bill should be amended to provide broad access to the claims data in a manner that is protective of patient information, company confidentiality, and antitrust concerns but also allows consumers, policymakers, and researchers’ access to the data needed to perform key assessments that will drive improvement.

 

Stephen T. Parente is Minnesota Insurance Industry Chair and associate dean, Carlson School of Management, University of Minnesota and governing chair of the Health Care Cost Institute. David Newman is executive director of the Health Care Cost Institute.