Privacy and security issues are a concern for many in the liberation of health data. While opening up data to public use bolsters innovation and opportunities to improve healthcare experiences and costs, patients are justifiably worried that their private health data may become compromised. Thus, the establishment of trusted third-party gatekeepers are essential to keeping the health data arena secure as well as comprehensible to everyday data users. We spoke to Dr. David Newman, Executive Director of the Health Care Cost Institute, about the role his organization plays in gatekeeping and analyzing health data.
What is the Health Care Cost Institute and what is its mission?
The Health Care Cost Institute (HCCI) is a non-profit, non-advocacy, non-partisan research institute. It was created in 2011 by Aetna, Humana, Kaiser Permanente, and UnitedHealthcare to hold their administrative claims data, but is independent of the insurers and governed by an autonomous board of academic researchers and actuaries. I am the first executive director.
Our missions are to promote independent research and analysis on US health spending; to provide policy makers, consumers, and researchers with better, more transparent information on what is driving health care costs; and to help ensure that, over time, the nation is able to get greater value from its health spending.
To those ends, HCCI has created and maintained a database of up-to-date information about public and private sector health care costs and utilization using health care claims data – that’s the bills your insurer receives from doctors. Currently, HCCI holds medical and pharmacy claims for 50 million Americans a year since 2007, and from all 50 states and the District of Columbia. This is a huge amount of data. But what also makes the HCCI dataset unique is that we hold the allowed amounts (actual amounts paid) by both the insurers and consumers. We have both the insurer’s portion of the bill and the actual out-of-pocket spending.
In 2012 and 2013 we released annual reports on health care spending and utilization trends. These reports, have become a definitive source of information regarding health care provided to those under the age of 65 and covered by employer-sponsored insurance (ESI).
HCCI also licenses data for non-commercial, non-proprietary research by academics on costs, utilization and other health related topics. Last year, the Society of Actuaries released the first independent research project using HCCI data. Dale Yamamoto estimated health care costs from birth to death, the cost of diseases over a lifetime, and the cost of health care in retirement. Today, there are other projects underway. We also recently announced our Academic Research Partnership Program.
All HCCI reports and issue briefs are available for free on our website along with links to independent research using HCCI’s data.
David, your passion and dedication are well known. Could you talk about what drives you as the leader of the organization and the impact that increased transparency could have on healthcare system as we know it?
I strongly believe in HCCI’s public mission. What we are doing is both unprecedented and important, extremely challenging, and has broad stakeholder support.
Economists readily acknowledge that properly functioning markets require information on price, quality, and treatment alternatives, and all three have been lacking in health care. That said, we stress that a lot of the formative research required to introduce transparency has not been performed. For instance, there are studies from other sectors that suggest price transparency can increase prices. Separately, we really do not understand how important price actually is to consumers relative to other information, which information is important, how it should be presented, how consumers should make trade-offs between price and quality, or how transparency might effect health disparities. As an example, are consumers better served from prices provided from payers by provider at the procedure code or episode level, or are they better served with a reference price that allows them to comparison shop – we do not know.
We have so much health data today. Making it meaningful, comprehendible, and actionable seem critically important. What is HCCI’s vision of “smart data,” and how will it transform the way data governance and sharing is conducted today?
We hope to transform big health data into smart data. Our view of smart data is that an entity, such as HCCI, should sit between data owners and data users, as a trusted third-party. A trusted third-party can reduce costs, provide expertise and value-added services, and achieve economies of scale that benefit everyone.
By standardizing data contribution and data licensing, HCCI has reduced the legal costs of holding big data without sacrificing security. HCCI has negotiated standard licenses from data owners, so they only have to license their data once in order to allow broader access to their data. These licenses grant HCCI the right to redistribute the data to researchers. These standard licenses, often at the institutional level, mean that negotiations are far more efficient.
One of the benefits of a trusted third party with a public research mission is that we are able to assist teams with their research efforts. We report on our data and know it well. Moreover, researchers using HCCI data can rely on HCCI’s de-identification, under HIPAA, when using the data. These determinations can save researchers thousands of dollars and ease Institutional Review Board review. In addition, HCCI performs value-added functions, such as generating common encrypted provider identifiers across data contributors and merging outside datasets into the HCCI data.
Finally, there are significant costs associated with technology and data storage that, when shared, achieve considerable economies of scale, bringing down the costs associated with any particular research project.
Your visibility into both public and private sources of health care data has given you a unique window into the economics and mechanics of our healthcare system. Could you talk about one or two of the most surprising insights that have emerged?
First, as the quantity and variety of data increases, we are making all sorts of discoveries regarding costs and use of health care services. For instance, our initial kids health care report found that while health care costs rose with age, kids had the fastest rate of growth of any age cohort. Our second kids health care report highlighted that kids use of health care services, and costs, varied considerably by age. For example, teenagers (ages 14-18) use of mental health drugs rose 10% between 2011 and 2012 much faster than younger kid’s.
Finally, I should note that HCCI is not the cost control institute. If care is improving while costs are going up, this may be a good use of resources. However, if payers, consumers, and employers want to put downward pressure on prices, they need to know where prices are going up faster so they can ask why.
HCCI recently announced exciting new partnerships with leading research, actuarial, and government organizations. Can you tell us a little more about these partnerships and how it will expand HCCI’s current database and ability to produce comprehensive analyses on claims data?
One of HCCI’s public missions is to license its data to academic researchers for non-commercial non-proprietary research. Licensing and distributing big data is not easy, so we needed an approach that was both efficient and scalable. The HCCI Academic Research Partnership Program will license our commercial claims data to eight universities, including: Dartmouth College, Yale University, University of Pennsylvania, Northwestern University, University of Michigan, University of Minnesota, and the University of Texas MD Anderson Cancer Center. In addition, the Society of Actuaries, the American Academy of Actuaries, MedPAC, and the Congressional Budget Office are participating.
Each partner institution can commence at least two research projects each year, and those institutions involved in graduate education can start one doctoral dissertation project each year. We envision most projects will be completed in our “data enclave” with researchers “coming” to the data rather than the data being distributed to researchers. The Academic Research Partnership Program will accelerate and expand the research being conducted using HCCI data. Once we have more experience with the technical issues associated with operating the enclave, we can expand access to others.
What other plans does HCCI have in store for the coming year?
2014 is already an exciting year for HCCI. We just released a new report on Children’s Health Spending, and we anticipate in September updating our 2014 annual report on health care cost and utilization for the privately insured. We’re engaged in a number of partnerships to start reporting some health care benchmarks at the state level and we’re looking forward to seeing those completed before the end of the year.
HCCI has also applied to become a qualified entity under the Affordable Care Act. If HCCI is approved, we would hold most of the Medicare data for public reporting purposes. In addition, HCCI has been pursuing other public data. If we are successful on both fronts, HCCI will hold data on roughly 100 million Americans in 2015.
Finally, HCCI has been approached by owners/holders of electronic medical records wanting to explore whether HCCI can provide a governance structure for sharing these data and linking them with administrative claims data. If this is successful, HCCI could hold comprehensive claims and medical records for millions of Americans for research purposes, such as cost-effectiveness research. Finally, we hope to announce shortly a major foundation funded research program that would provide even greater researcher access to HCCI’s data and financial support for studying the impact of health care reform.