Regence BlueCross BlueShield Objects to Making Healthcare Costs More Transparent

The Oregon State Public Interest Research Group submitted 24,000 signatures from Oregon residents, impelling the board to make changes that would compel the Insurance Division to make insurance company rate hikes more transparent and the companies more accountable.


October 7, 2013 -- The Oregon Health Policy Board laid out five straw proposals last week in an attempt to carry out Gov. John Kitzhaber’s request to transform the healthcare system by coordinating care, rewarding quality outcomes and using a global budget to pay for healthcare costs.

One tool that could be helpful in driving down costs is a statistical warehouse known as the all-payer, all-claims database, created by a 2009 law, which lets the state collect mountains of healthcare information.

“The authors of this provision had a very broad perspective of what it can do,” said Gretchen Morley, the health analytics director at the Oregon Health Authority, who’s been developing the database.

But despite that broad perspective, the database -- which includes information on how much insurance companies pay for various health procedures -- is off limits to the public as well as news organizations such as The Lund Report.

Earlier this year, Oregon received an “F” for healthcare transparency in a national report produced by two business groups, the Health Care Incentives Improvement Institute and the Catalyst for Payment Reform. Greater transparency from the all payer, all-claims database may give consumers a better idea of healthcare prices so they can make more informed healthcare purchasing decisions.

Currently only academic research groups that can prove the use of this information meets high academic rigor are allowed access to the data base, said Jesse Ellis O’Brien, the healthcare advocate at the Oregon State Public Interest Research Group.

But if it were available to the public, OSPIRG or journalists might learn how much Regence BueCross BlueShield pays for a procedure compared to Health Net or Medicare, including hospital costs. They might also learn which hospitals charged more than others for similar procedures.

By making the data base publicly available, consumers could have a better opportunity to choose health plans that give them the best value, according to O’Brien. “We definitely would advocate for making it more accessible,” he said.

But, Alison Goldwater, the vice president of provider services at Regence, told the policy board that information should remain confidential. “Publicly disclosing private contract rates will drive rates higher.”

That’s not true, O’Brien countered, saying that Regence’s competitors have told him privately that transparency could help them get lower rates from hospitals throughout the state.

On the other hand, Bill Ely, a chief actuary at Kaiser Permanente, cautioned the use of the all-payer, all-claims database to get a true measure of healthcare cost, noting that an s integrated healthcare model, such as Kaiser, doesn’t rely on a claims system to determine costs.

But Ely did welcome the idea of setting up an all-payer, all-claims advisory group, as outlined in one of the straw proposals presented to the board by Diana Bianco of Artemis Consulting.

“Only after a thorough understanding of the data is obtained can we make it useful for the state,” Ely said.

Although the recommendations for the all-payer, all-claims database recommendations could be put in place in 2014, Kitzhaber has asked the policy board to come up with recommendations that could come before the February 2014 legislative session.

One idea that seems likely is pushing private commercial insurers that participate in Cover Oregon to focus on a coordinated care approach similar to that adopted by the Oregon Health Plan.

To qualify for the exchange, insurers would have to instigate the primary care home model as well as use global budgets and quality metrics, said Board Chairman Eric Parsons.

“We should do everything we can to channel care to primary care and preventive care,” he said, before warning about being too prescriptive in the board’s policy directions. “I want to encourage the direction but not bind providers to any rules.”

Another proposal would reward insurance companies to show a sustainable inflation rate, with merit badges, that participate in Cover Oregon. And, the Insurance Division could reduce or reject rates increases if insurance companies were unable to show they were following innovative practice solutions. 

“Oregon’s rate review process has been very effective at forcing insurers to operate more efficiently,” O’Brien said.

O’Brien pushed for using rate requests to hold insurers accountable, and, by extension, hospitals and other healthcare providers accountable for controlling healthcare costs.

But Goldwater once again dismissed Regence’s ability to force providers to adopt cost containment measures.

O’Brien agreed that insurance companies might be unable to negotiate provider contracts if they push too hard to hold down costs. But, if the Insurance Division required all insurance companies to apply this pressure, and quantify their cost containment strategies, the health systems could be held accountable along with the insurers, he said.

OSPIRG delivered a petition signed by 24,000 Oregonians, calling for the Insurance Division to make insurance companies prove they were working to control medical cost and demanded that insurers notify their consumers when they seek rate hikes.

Sen. Chip Shields, D-Portland, pushed a bill in the past session, SB 413, which would have required this, but the bill was killed on the Senate floor, at the behest of Sen. Laurie Monnes Anderson, D-Gresham.

But the state’s consultants didn’t advocate one popular idea. Joel Ario, a former Oregon insurance commissioner, downplayed the effectiveness of wellness programs and patient health engagement in the individual market, despite evidence that larger employers have been able to persuade employees to take up healthier lifestyles.

“Wellness programs have shown significant success in the large employer market, where human resources can work with employees,” said David Cusano, a senior research fellow at the Georgetown University Health Policy Institute in Washington, D.C. “It’s questionable how much wellness programs can work in individual and small group markets.”

The health policy board will meet again Nov. 5 in Hood River to begin approving policy recommendations for the governor and Legislature.

Christopher David Gray can be reached at [email protected].

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How can we ever bend the cost of healthcare when the cost of services is so variable and opaque to both the patient and doctor? Why create the All Payer All Claims database if there is no transparency allowing consumer groups to analyze de-identified data??? We should understand how much patients are paying out-of pocket as these costs will not be tracked and they are not included in the measurements of the medical loss ratio. The more cost-shifting through co-pays, deductibles and co-insurance, the more irrelevant any insurance is. These issues come up at small group discussions today at a summit put on by the Coalition for a Livable Future. The out-of-pocket costs should also be understood at the point of service. Otherwise it will be hard to understand when a patient is 'non-compliant" because the tests and treatments are too expensive. The haves and have nots that drive up health equities are defined by our zip code. And as wealth and income inequality increases, our ability to address this (let alone bend the cost curve) cannot be accomplished without transparency of healthcare costs. Instead it is ok to send the metadata on all our healthcare visits to a private company??? Milliman Inc., an actuarial and consulting firm that is collecting our personal health information. They hold the key that encrypts our personal health information. We cannot opt in or opt out. Milliman Inc. will manipulate the data for analysis too. Who will audit their work? I have been waiting since July to learn more with this public records request. I hope others have similar questions about this BIG DATAbase and join me in demanding this information! ATTN: Public Records Officer Oregon Health Authority 500 Summer Street NE, E20 Salem, OR 97301 RECORDS REQUEST Dear Ms. Keely, Pursuant to the state open records act, I request that the Oregon Health Authority and its employees make available for inspection or provide copies of the following records: Memorandum of Understanding between the Oregon Health Authority and Milliman Inc. for the development and maintenance of the All Payers All Claims (APAC) Database. This should include payment for procured services. Security measures adopted by the Oregon Health Authority for the APAC database and estimated cost for these operations. Total payments to Milliman Inc. (inclusive of grants, revenue allocated by the legislature and other sources) to procure these services and future services. Data layout and field formats transmitted by Payers to Milliman Inc. Data breach guidelines for APAC, compliant with Jan. 2013 HIPAA rule changes. I wish to receive electronic copies of these records, unless that option is not possible. A cost estimate of these records can be sent by email.

Persist, Ms. Keely, persist! Not all players in this field have equal concern about data privacy for individuals, and your request is eminently appropriate. The database is s good thing for cost and care management, but accountability should be prominent. Don Thieman, M.D.

If dollar contract amounts are a problem (that is a reasonable objection), relative costs to a fairly granular level (an average of "100" with percents above and below, for instance) comparing contracted rates for a service by provider and insurer are not. This is an issue that should be pushed. With relative costs, a patient can learn what the cost will be by getting the billing codes proposed by the providers and asking the facility what will be the cost for that surgery or other service before scheduling. Any facility or professional unwilling to share that specific information for a potential patient should not get the work.

Persist, Dr. Thieman? This is a public record request. The OHA has a responsibility to respond to my request, one way or another. The costs that go into this project could be weighed against, say, the costs for financing health care systems. That money must be raised by private sources. Bending the cost curve means looking at all the ways that cost-shifting occurs. Indeed, we put so much emphasis on the MLR. Medical loss ratio doesn't capture out-of-pocket costs or profits of insurance companies. Just like the GDP, the MLR is false accounting. Indeed, it is germane to your point. If it is such a "good thing for cost and care management," why would reporters not have access to the information. At the point of service, doctors should know how much cost shifting is going on. They will be better enlightened how big business cost shifts to the average joe. For example, let's say Intel says to an insurance company, "Your costs must go down by 40% or else we walk." Hmmm... that might mean they get the Costco bulk prices. But what about the small businesses that don't have that clout--even through the tax incentives through Obamacare. The business model of health care has deviated to "personal responsibility." This is so ill defined. But rest assured, it will all be correlated to your zip code. The haves and have nots!

Proud to see that you support Transparancy, will you encourage CareOregon to post the salaries of all 5 of their medical directors online?