Not long ago Wisconsin looked at knee replacements. Much to its surprise, it found a 1,000 percent variation in the cost of the procedure around the Badger State. Even after controlling for different types of patients — the young tennis pro vs. the obese septuagenarian — the state still found one knee replacement could cost as much as eight times another.
With the cost of health care in the U.S. soaring into the stratosphere, such information is — pardon the term — priceless. But it also can be hard to come by. In Wisconsin, it was made possible by a self-funded entity known as an all-payer claims database, or APCD. That's a jargony term for a site that pools claims information from all the health insurance companies in the state.
Legislation before the General Assembly would create a similar database in Virginia. It is backed by businesses big and small, which have a keen and obvious interest in controlling the growth of health costs. But it also has the somewhat surprising support of the state's hospitals and the Medical Society of Virginia. Hospitals and doctors are used to scrutiny: Since 1993, the Virginia Health Initiative has compiled data about their performance. Go to www.vhi.org and you can, for instance, compare obstetricians to see which ones have more or fewer repeat caesarian deliveries than expected from patient characteristics.
Insurance companies mine their claims data for even more precise information already. But because health care providers take patients who are covered by a multiplicity of different insurers, the data from, say, Optima alone does not give a complete picture of how Dr. Smith stacks up against Dr. Jones. Hence the drive for an APCD. (Individual patient information would be anonymous, as required by federal law: The database would reveal, e.g., that a 55-year-old Hispanic female received treatment for a broken arm, but not who she was.)
The concept is sound. Surprisingly, Virginia's largest insurer, Anthem, has not warmed to the idea. That is too bad; as the nation has learned from resources such as The Dartmouth Atlas of Health Care, health care spending can vary wildly without any concomitant variation in the quality of medical care or the patient's improvement. But the information in both the Dartmouth Atlas and the VHI database is highly limited. More comprehensive information would greatly increase the odds of improving medical care and bringing down costs. Surely that is something everyone — insurers particularly — should be able to support.
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