The importance of claims databases to control costs
Well before implementation of the Affordable Care Act, a handful of states, including Maine, Maryland and Massachusetts, created all-payer claims databases (APCD), according to Stateline. The APCDs collect claims data from all commercial insurers within their borders to detect price discrepancies among doctors and hospitals.
The industry needs such databases because procedure prices and quality are not revealed until after services are provided, so doctors and patients make decisions based off little or no information. What's more, price variation differs greatly. For example, an appendectomy in California costs anywhere from $1,500 to $180,000, often within the same county, notes Stateline.
Blue Cross Blue Shield of Michigan launched an initiative to use claims data to determine cost and utilization patterns among 130 hospitals throughout the state back in 2013. Now more states recognize the need to adopt APCDs. In the last three years, 19 states have ACPDs and at least 21 states are considering creating them.
Claims databases also can shed light on if a doctor followed nationally recommended medical protocol for treatments. Making this information available to consumers can lead to better decisions about their care, reports Stateline.
The cost to implement the databases varies among states. Maine has spent between $4 and $5 million for hardware and staff time since 2002, according to the APCD Council. Maryland dishes out nearly $1 million a year for system maintenance, process management and analytical research.
"They are absolutely worth the money," APCD Council Director Denise Love, who works with states to develop effective claims databases, told Stateline. "States spend billions on healthcare. Spending a million or so to better manage those costs makes a lot of sense," she said.
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