Delivery of Care

How data analyses may bend the curve of health costs in RI

A promising statewide effort is underway to use the dataset from the All Payer Claims Database in RI to deconstruct health care costs

Image courtesy of Anya Rader Wallack

A slide from the slide deck presented at the May 14 gathering to discuss initial analyses from looking at All Payers Claims Database and potential strategies to reduce health costs.

By Richard Asinof
Posted 5/20/19
The gathering of the steering committee on health cost trends on May 14 provided an opportunity to develop common ground on data-driven strategies to deconstruct health care costs in Rhode Island.
Where does the creation of affordable, safe healthy housing as a prescription for good health outcomes fit into the health care cost equation? How do public health and clinical costs from emerging climate changes become a factor in anticipating future health costs? Will what many have characterized as a war on women in the efforts to create stringent anti-abortion laws at the state level change the overall cost equation for health care? If most of the money invested in health care is in clinical procedures and not in prevention measures, will attempts to bend the cost curve require a different way of looking at disease?
Patients, sometimes more than doctors, have a greater expertise in recognizing what is happening to their own bodies. Where, exactly, do they fit into the conversation about health care costs? But being heard is still a difficult process, where patients are defined by procedures and codes and health IT records, and the personal stories get lost in translation. When the human enterprise of health care breaks down, the relationship between patient and provider becomes fractured, a relationship that cannot be repaired by a stronger dose of medication.

PROVIDENCE – There are, according to the old chestnut, two things that are assured in life: death and taxes.

A modern update for Rhode Islanders might include the assurance of getting stuck in rush hour traffic as a result of continual repairs to the highways and roads in the state, which, at least for the 30 years having lived here as a resident, are a constant fact of life.

A fourth assured fact of life is the ever-escalating cost of medical costs delivered by the health care delivery system [which some have called a market of wealth extraction, not a system], something that afflicts both Rhode Islanders and the rest of the nation.

On Tuesday morning, May 14, when most of the other Rhode Island news media were busy taking joyrides in the driverless vehicles and then posting about it, ConvergenceRI was ensconced in a “listening” session at the Hotel Providence, where the stakeholders of the Rhode Island Health Care Cost Trends Project were gathering to review and discuss proposed strategies to reduce growth in health care costs, following a preliminary analysis using the All-Payer Claims Database, sometimes referred to as HealthFactsRI.

The rides in the driverless vehicles certainly provided a distraction for the news media to report on; whether the introduction of such AI technology does anything to relieve actual traffic congestion or improve mass transit infrastructure in the state is another story. But it certainly generated a lot of clicks, which is, after all, what drives most news coverage and advertising these days.

The stakeholder meeting, however, served as a promising launch point to wave the checkered flag to start to identify cost trends around health care costs and potential strategies to reduce them. [Editor’s Note: All the potential numbers and strategies generated by the analysis were not for citation or publication.]

Even with those restrictions on coverage, ConvergenceRI can report that there were spirited discussions among more than 100 participants, who probed the findings from the initial breakdown of the numbers.

The background

For those who may have been asleep at the wheel [which apparently includes WPRO’s Dan Yorke, who seemed unaware of the ongoing effort during a radio call-in conversation last week], here are the goals of the project:

To reduce growth in health care costs by developing a cost growth target and providing transparent health care performance data to influence purchasing decisions and care delivery reforms.

To develop a deeper understanding of the state’s health care cost drivers and cost variation.

To create a sustainability plan to support ongoing analyses.

A Steering Committee of payers, providers, and other business and community representatives is advising the state of Rhode Island on this work. The committee includes all the major honchos in Rhode Island’s health care industry, including:

• Dr. Tim Babineau, president and CEO of Lifespan
• Dr. Jim Fanale, president and CEO of Care New England
• Dr. Al Kurose, president and CEO of Coastal Medical
• Neil Steinberg, president and CEO of the Rhode Island Foundation
• Marie Ganim, commissioner, R.I. OHIC
• Kim Keck, president and CEO of Blue Cross & Blue Shield of Rhode Island
• Stephen Farrell, UnitedHealthcare of New England
• Adriana Dawson, Bank of Newport
• Al Charbonneau, Rhode Island Business Group on Health
• Dr. Peter Hollman, Rhode Island Medical Society
• John Simmons, Rhode Island Public Expenditure Council
• Teresa Paiva Weed, Hospital Association of Rhode Island
• Betty Rambur, Ph.D., RN, URI School of Nursing
• Sam Saglanik, Rhode Island Parent Information Network
• Larry Wilson, The Wilson Organization

The project is being supported by the by The Peterson Center on Healthcare through June 30, 2019.

The target: cost reduction
The Steering Committee compact set a voluntary rate of 3.2 percent annual growth target for health costs for 2019-2022, which was announced on Feb. 6 and supported by an executive order signed by Gov. Gina Raimondo. [See link below to ConvergenceRI story, “Annual cap of 3.2 percent put on health care costs in RI.”]

Under the initiative, data will be calculated and reported from Medicare, Medicaid and all major insurers to assess the performance at the state, insurance market, insurer and large provider levels.

The Brown University School of Public Health, under the direction of Dr. Ira Wilson and Anya Rader Wallack, Ph.D., conducted a data analysis to measure health care system cost performance and identify cost drivers. The findings were shared at the May 14 meeting.

In addition, a data use strategy will be developed to leverage the All-Payer Claims Database on an ongoing basis in identifying cost drivers and cost growth variations to improve overall health care system performance. A draft strategy was also reviewed at the May 14 meeting.

In a feat that he likened to impersonating TV talk show host Phil Donahue, Wilson led the audience through a rapid review of the 113 slides in the slide deck, all the while sharing the microphone with questioners from the more than 100 health care aficionados who attended.

A deep dive
The categories examined as part of the analysis conducted of the All-Payer Claims Database included data from: commercial health insurance [fully insured and self-insured]; Medicare fee-for-service; Medicare Advantage [including Medicare Advantage and Medicaid]; Dual Eligibles [those with Medicare and Medicaid]; Medicaid Managed Care; and Medicaid fee-for-service [of which there are very few in Rhode Island currently].

The analysis of the All-Payer Claims Database began by testing: whether the database could serve as a data source for total cost trend analyses [not yet]; whether the database could serve as a rich data source for analyses of drivers of costs and cost trends [yes]; and whether the database could serve as a rich data source for supporting cost growth reductions and eventually quality improvement [yes].

The analysis concluded that by deconstructing costs and cost trends using the data from the All-Payer Claims Database, these datasets could be productively used.

While New England is the highest cost region in the U.S., when compared to other New England states, Rhode Island is consistently one of the lowest spending states. But, when compared to the rest of the country, Rhode Island emerges clearly as one of the highest spending states.

Follow-up questions
Following the session, ConvergenceRI reached out to Anya Rader Wallack with a series of questions;

ConvergenceRI: One of the cost-pricing trends identified was related to the cost of drugs. Are there plans to dig deeper into that, i.e., differences in how pharmacy benefits contracts are managed?
RADER WALLACK:
Future analyses could go in all sorts of directions. That will be guided by the steering committee, which, as you saw, had some preliminary [recommendations] but is seeking comment and, I think, even evolved in their thinking a bit today.

Our primary focus now is to analyze the APCD data on its own and make the dataset more complete. Something like how PBM contracts relate would require linking of datasets – something we will undoubtedly do, but we will have to prioritize. On the other hand, the high and rising costs of drugs is likely to remain an area of high interest.

ConvergenceRI: One cost not identified, as best as I could determine from the presentations, is related to health IT. Where does that fit into the picture?
The costs of maintaining health IT systems are huge; so are the problems with interoperability, as a function of cost. Are these expenses considered administrative costs? Is there a way to determine how such costs are factored into the total costs of every procedure?
That is of particular interest when it comes to managed Medicaid costs, because the new accountable entities may require health IT upgrades as do the managed Medicaid organizations, to make the data analysis work. How is that factored into the cost?
RADER WALLACK:
I don’t think there is any way to get at these costs through the APCD. They would show up as discrete costs in Medicaid MCO contracts, Medicaid program costs, [and in] commercial admin costs allowed in premiums by OHIC. A tiny piece of that is in every claim, but it is impossible to identify.

ConvergenceRI: When it comes to discussing orthopedic procedures and outcomes, it seems the data analysis may still be looking at the older business model of care. What Ortho RI is doing, as a physicians group, independent of hospitals, creating their own new building in Warwick, strikes me as an interesting cost comparison metric to explore, for instance, when looking at hip replacements, or total knee replacements, or the scoping of knees. Are they included in the mix of data inputs? They are, after all, the largest group provider of orthopedics in Rhode Island now.
RADER WALLACK:
Comparison of provider groups [as planned] should reveal whether some models are more efficient and have better outcomes, whether at the primary care, specialty care, hospital, or ACO level.

ConvergenceRI: The last question comes from a public health perspective: how do we look at issues of cost of care related to chronic diseases related to environmental causation and triggers, such as asthma, as a way of looking at prevention and avoided costs? It seems as if there is an opportunity to begin to redefine the definitions of value in medicine accordingly, i.e., avoided visits to the ED and hospitalizations, vs. in-home abatement of the triggers for asthma. Is that too far a bridge to cross?
RADER WALLACK:
Not too far a bridge to cross, and this was something of interest to our provider focus groups – whether they could look at data on social determinants, environment, geography, etc., to get a handle on things outside the health care system that might be driving high costs. We will be looking into what we can do with the state to combine APCD and other data for this purpose.
Lots of work to do! As was suggested, we need focus [because the potential is vast and somewhat overwhelming] on determination [because we need to pursue some things that will provide high ROI, to address the cost problem].

Finding common ground
Emerging from the meeting, ConvergenceRI was struck by a memory of when he lived in a small rural town in western Massachusetts, Montague Center, and each summer, the town would hold a festival on the town green, “Old Home Days,” to benefit the older residents in town. Everyone showed up for the festivities, many walking from their homes.

The gathering of the stakeholders on May 14 to discuss the analysis and potential cost reduction strategies had a similar feel to it: everyone from the Rhode Island health care industry seemed to be there, everyone knew each other. During a short break, there were a series of conversations that kept getting interrupted by more people entering the discussion.

There was a strong desire to find common ground, to see Rhode Island as a community, despite all the fractious news coverage of late between competing health systems.

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