Lessons Learned

Stemming the growth of health care costs cannot be accomplished without transparency around the cost and quality of health care being provided. As part of their endeavor to reduce health care cost and spending while promoting the development of high-value care, the Alliances have embarked on innovative efforts to control costs and monitor over- and underuse while advancing improved quality. They are seeking transparency to uncover variation in health care costs.

Access to data is essential to present an accurate representation of cost and variation within the market.In addition, Alliances need to have access to specific types of data, such as allowed amounts paid to providers, to guide the markets’ efforts on strategies to reduce costs.Variation within the market can encompass a number of different areas, such as costs and utilization or rates of procedures, services, and products. Alliances also need to be able to distinguish between health plan product lines because combining commercial insurance, Medicare, and Medicaid data does not allow for adequate cost comparisons.

Several Alliances have developed creative methods and proxies to contend with the lack of cost data. Accessing reliable cost data is difficult for many reasons. Health plans may decline to share data because of contractual or proprietary concerns. Technical issues, such as provider or patient identification challenges, may also make cost data difficult to access.Because of these obstacles, some Alliances use nationally developed algorithms or regional averages. Others have had success in using national (Medicare) cost data as proxies. Proxies are cost approximations or averages; and while the methodology provides an opportunity to engage in cost work, it is not the idealapproach. There are wide variations within a market for costs of procedures or episodes of care that cannot be teased out through use of proxies.

Acquiring cost data does not guarantee success; Alliances may still face a number of technical issues in using and reporting the data. While the issues described below are characterized as technical issues, there is perhaps an underlying lack of political will on the part of the health plans to participate in the process of analyzing and reporting cost data.

Technical Issue


No access to allowed amounts

Sometimes health plans refuse to provide allowed amounts because of gag clauses or privacy concerns. Instead, they provide a proxy dollar amount that is not an accurate representation of cost.

Plan member enrollment changes

No common member ID to locate members who move from one health plan to another.

Inconsistent use of provider identifiers

Common means to identifying providers is the National Provider Identifier. If not all health plans provide this NPI, then data cannot be linked at the provider level.

Invalid member IDs

Using a catchall member ID for claims for patients without an ID.

Insufficient provider specialty information

This information is important when attributing patients with chronic diseases or other specific episodes to providers so inter-provider comparisons can be made across similar provider types.

Lumping together product lines (Commercial, Medicaid, Medicare)

Combining product lines results in an inability to create important distinctions when running analyses, and thus meaningless results.

Small N

Inadequate sample size prohibits reporting.

Technical Issue Table developed by the HealthCare Incentives Institute (HCi3).