The billing (claims) data of healthcare providers for the United States Medicare Program, which is considered to be one of the most important healthcare programs to be held private for almost 35 years, was made available to the public just a couple of weeks ago on April 9.
The data that will be available to the public includes the identifiable healthcare provider information, specialty, procedure and associated cost information. However, data related to the patients will not be available to the public, as patient privacy will be maintained.
Experts and some groups have opposed the release of this data due to the possibility of privacy intrusion and potential for patients and payers to misinterpret the data among others. In other words, the implications of this data release require further extensive analysis.
Several payer groups are very excited about this information and government and the government agencies are interested to see the cost efficiencies that this program might bring. And, along the same vein, insurance firms and private payers would like to leverage this information to benchmark the claims the providers make. And finally, patients and healthcare delivery enablers (employers) would like to wean the 'quality of care' information from this data.
We believe that this data is truly a treasure trove to understanding the various dimensions of government spending, provider billing patterns, fraud and potential cost efficiencies. In my opinion, three product ideas based on this data which can be features of a stand-alone product or used in conjunction with any existing product are. In other words, there are three ways payers and providers can leverage analytics solutions to enhance the customer experience:
Fraud/improper payment prevention
According to a U.S. Government Accountability report, in 2012, the Medicare program covered more than 49 million elderly and disabled beneficiaries. The cost was $555 billion and the estimated improper payments reached $44 billion. This ratio of almost 8 percent of the payments being improper provides a great opportunity for reduction.
There are products that exist that use advanced prediction/estimation models based on patient behavior, billing cycles, nation-wide provider billing estimates and standard cost estimates to detect improper payments. Increasingly, these types of products will become more and more popular with the government and with insurance providers.
Doctor ratings
With newly available information on procedures, it will become easier to identify the expertise of the certain providers. For example, if a patient wanted to get a cataract operation done, that patient could find out how many operations a specific surgeon did last year, so on and so forth, to help them guide a decision. No surprise - research shows that the quality of procedures is better if the doctor performs the same one frequently.
A product or a feature that combines these newly available doctor ratings with the cost information would be a very powerful tool for the selection of the expert. Several insurance companies and healthcare analytics firms already provide features which list doctors by their specialty, ratings gathered from peers, and cost estimates. The new analyzed data would fit right in here.
Driving cost efficiencies and cost reductions
With the data on the cost per procedure now clearly available, researchers can look at the money spent on drugs or procedures in different parts of the country. They can check whether that leads to increased quality in care. From a payer point of view, now there is comparable claims information for the provider to compare the insurance coverage part and the Medicare billing cost for the same procedure.
A product that compares the healthcare provider claims estimate for the same procedure from a Medicare perspective and insurance provider perspective would also be of great interest to both the government agencies (CMS etc.) as well as the insurance providers. Ultimately, this will help the payers to benchmark costs and drive efficiencies.
In summary, the released Medicare claims data is a very rich piece of data that will make its presence felt in multiple facets of healthcare. There's no doubt that its repercussions will be tremendous to say the least. Payers and providers should both look at leveraging emerging analytics solutions to help drive an improved customer experience.
Yoganand Sundararajan is Senior Manager, Business Consulting at Virtusa.