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The Case for a Comprehensive Cross-Payer Health Database

The Case for a Comprehensive Cross-Payer Health Database. Mac McCarthy, FSA, FCA, MAAA Middle Atlantic Actuarial Club September 13, 2013. Speakers. Mac McCarthy, FSA, FCA, MAAA McCarthy Actuarial Consulting Mac@McCarthyActuarial.com 804-651-5293. Tom Persichetti , ASA, FCA, MAAA

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The Case for a Comprehensive Cross-Payer Health Database

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  1. The Case for a Comprehensive Cross-Payer Health Database Mac McCarthy, FSA, FCA, MAAA Middle Atlantic Actuarial Club September 13, 2013

  2. Speakers Mac McCarthy, FSA, FCA, MAAA McCarthy Actuarial Consulting Mac@McCarthyActuarial.com 804-651-5293 Tom Persichetti, ASA, FCA, MAAA Persichetti & Associates Tom.Persichetti@PersichettiLLC.com 202-321-5426 www.McCarthyActuarial.com

  3. Agenda • Current State of Healthcare Claim Data • Affected Parties’ Issues • Buyers • Payers • Researchers & Policymakers • Providers • Consequences • Why Consolidated, Shared Data Makes Sense • Potential / Emerging Solutions • Impediments & Concerns • Audience Q&A www.McCarthyActuarial.com

  4. Current State of Healthcare Claim Data • Each payer has proprietary database • Payers include government programs, insurance companies (including HMOs), and employers • State all-payer databases • Data warehouse services • No central repository • Little or no information sharing www.McCarthyActuarial.com

  5. Buyers’ Issues • Buyers = • Individuals / Consumers / Patients • Employers • Inability to ascertain providers’ and competing treatments’ value • Information overload & credibility deficits • Frustration due to: • Poor communication between care providers • Inconsistent billing and benefit statements • Lack of accountability • Distrust is widespread www.McCarthyActuarial.com

  6. Payers’ Problems • Payers = • Insurers • Employers • Governments • Projecting future costs • Fraud and waste • Assuring value for clients/employees/constituents • Managing financial risk www.McCarthyActuarial.com

  7. Policymakers’ & Researchers’ Needs • Credible data on alternative treatments for specific conditions • Prevalence, effectiveness & costs • Stratified by population characteristics • Considering comorbidities • Reliable information on the impact of: • Plan design • Alternative payment strategies • Wellness & disease management programs • Provider consolidation & density • Quantification of fraud, abuse and waste in the healthcare industry www.McCarthyActuarial.com

  8. Providers’ Concerns • Inappropriate / unmanageable risk assumption • Demand anticipation • Revenue protection • Reputation • Control www.McCarthyActuarial.com

  9. Consequences • FBI estimate for 2009 fraud1: 3% - 10% of total health spending ($75–$250 billion) • Recoveries in 2012? Only $4.2 billion2 • Truven Payment Integrity Analysis3: • Annual fraud and abuse = $125 – 175 billion • Lack of care coordination = $25 - $50 billion • Provider inefficiency and errors = $75 - $100 billion • 1: Health Affairs, 28, no.5 (2009): • Combating Fraud In Health Care: An Essential Component Of Any Cost Containment Strategy • 2: HHS/DOJ Healthcare Fraud and Abuse Control Program, FY2012 • 3: Truven Health Analytics: Payment Integrity Analysis, April 2013 www.McCarthyActuarial.com

  10. Consequences • Time for recommended evidence-based practice to be fully implemented4: 9 years • National Health Expenditures increase, relative to GDP growth, 2000 - 2011: Double 4: Commonwealth Fund: Blueprint for the Dissemination of Evidence-Based Practices in Health Care www.McCarthyActuarial.com

  11. Consolidated, Shared Data Makes Sense • Fraud payment avoidance • Consumer Driven Health Plans • Shared risk models • ACOs, PCMHs, Bundled Payments • Efficient capital investments and provider workforce development • Comparative effectiveness studies • Enhanced disease tracking for early identification of emerging epidemics and localized “hotspots” www.McCarthyActuarial.com

  12. Potential / Emerging Solutions • Verisk Health • Pooled-Data Alliance between health insurers • “For the first time, healthcare payers will be afforded the same comprehensive view of suspect providers and schemes that has proved so successful for the property/casualty industry.” • Applies fraud detection tools developed in the property & casualty insurance markets, adapted to the healthcare environment www.McCarthyActuarial.com

  13. Potential / Emerging Solutions • HealthcarePays • Member-owned “industry utility” • Membership is open to healthcare payers and providers • “The HealthcarePays network connects employers, payers, providers, banks, key government agencies and waste and fraud systems to provide a level of transparency that enables unparalleled waste and fraud detection.” • Mirrors fraud avoidance techniques used by credit card industry • Cross-payer / cross-provider claims data will be available to members , subject to member defined governance and applicable privacy regulations www.McCarthyActuarial.com

  14. Impediments & Concerns Dialogue No one understands me What do you mean? www.McCarthyActuarial.com

  15. You have Questions We have Answers www.McCarthyActuarial.com

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