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Releasing The Power Of The Health Care Claim
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Releasing The Power Of The Health Care Claim

How unassuming bills can reveal much about what employers are getting for their health care dollars.

You can learn a lot about a person by looking at their bills, receipts and credit card statements. On one of my recent monthly MasterCard statements were transactions for one Wisconsin annual nonresident fishing license, two “The Who Hits 50!” concert tour T-shirts and multiple trips to the concession stand at the United Center in Chicago during a Blackhawks game. That pretty much sums things up.

A much more interesting and complex subject to talk about is how much employers are paying for health care services to employees. And it turns out that—like bills, receipts and credit card statements—you can learn a lot about how much and what you’re paying for by analyzing health care claims. Claims are the itemized bills that providers like hospitals and doctors submit to health insurance companies for payment and then send to patients to pay the balance for what’s not covered by their health plan.

Far from a boring financial document that details a mundane transaction, the unassuming health care claim is turning out to be a rich source of information on how the health care delivery system works and how well it’s working for the people who pay the bills, like employers.

Let’s look at some recent insights into the health care delivery system that were provided by the mighty health care claim and then suggest some ways for your business to harness that power.

An organization called the Health Care Cost Institute maintains a database of nearly 3 billion claims paid by three of the nation’s largest health insurance carriers: Aetna, Humana and United Healthcare. Researchers from the HCCI used the information in the claims database to compare the average prices charged to commercially insured patients by providers in 41 states and the District of Columbia in 2015 for 162 common medical services.

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The researchers, who published their results in the journal Health Affairs, found wide variations in the statewide average prices charged by providers for the same services (bit.ly/1NG0Hul). Average prices in 15 states were lower than the national average. They were higher in 26 states and D.C. Minnesota had the fifth-highest average prices, behind Alaska, Wisconsin, North Dakota and New Hampshire. Prices for the 162 common medical services in Minnesota were 60 percent above the national average.

Medicare also studies claims data to annually adjust the rates it pays to providers for medical services for the 54 million people enrolled in the government health insurance program for the elderly. By using Medicare cost reports, which are like comprehensive year-end claims reports, submitted by providers to the government, a congressional advisory board called MedPAC calculated hospitals’ profit margin from Medicare. Buried deep within its 460-page March report to Congress, MedPAC disclosed that hospitals posted a negative 5.8 percent margin on Medicare in 2014 (1.usa.gov/22w41ik). That means for every dollar hospitals spent caring for Medicare patients, they got back just a little more than 94 cents.

Yet that same year, hospitals posted a 7.3 percent overall profit margin—their highest in 30 years, the report said. That means hospitals charged patients with private insurance significantly more, not just to cover losses from Medicare (and likely Medicaid) but to bring a record number of dollars to their bottom lines. Thanks to claims data, you know how much of your premium dollars and your employees’ medical costs are subsidizing government health insurance programs and hospital profitability.

We’re only getting started. The state of Minnesota just opened up its all-payer claims database to the public (bit.ly/21jqjj0). It’s the sixth state to do so, following Colorado, Maine, New Hampshire, Oregon and Utah, per the Minnesota Department of Health. In a statement, Minnesota Health Commissioner Dr. Edward Ehlinger said he hopes researchers, insurers, providers and others will use the de-identified data to “create more price transparency, improve care and lower health care costs.”

I hope by “others” he means employers. They—or their health plans on their behalf—should analyze their own claims data to find out how much they’re paying, whether the care they’re getting is worth the money, and if they and their workers could get more value for their health care dollar elsewhere.

Short Take

During my 33 years in the workforce (44 if you start with my short-lived career as a caddie at a private country club in suburban Chicago), I’ve been lucky enough not to experience violence in the workplace either as a bystander, perpetrator or victim (which I thought I would become after telling my golfer the wrong distance in a big-money match). If you want to avoid workplace violence, you may want to skip working in a health care setting. According to a report (bit.ly/2461UTc) in the New England Journal of Medicine, “Health care workplace violence is an underreported, ubiquitous, and persistent problem that has been tolerated and largely ignored.” Among the sobering stats cited in the report:

  • Nearly 75 percent of 24,000 annual workplace assaults that happened between 2011 and 2013 were in a health care setting.
  • Some 154 shootings with injuries occurred at hospitals between 2000 and 2011.
  • For every 10,000 employees in private health care and social services settings, workers missed 32.1 days of work in 2014 because of injuries caused by workplace violence, compared with just four days for workers in all private industries.

As employers, you have a responsibility to do whatever you can to support safe work environments in your local hospitals, doctor’s offices, surgery centers, ambulatory care centers and clinics. It’s good for your community, and it’s good for your workers who go into those health care settings for care.


David Burda (twitter.com/@davidrburda, dburda@msp-c.com) is editorial director, health care strategies, for MSP-C, where he serves as the chief health care content strategist and health care subject matter expert.

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