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9/27/2011
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Healthcare Costs Go Under BI Microscope

Health Care Cost Institute established to analyze health insurance claims data with the goal of finding new ways to cut costs.

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As health insurance companies seek to adopt measures that will reduce costs, the Health Care Cost Institute (HCCI) has been established to analyze data from more than 5 billion medical claim records representing more than $1 trillion of healthcare activity from calendar year 2000 to the present.

Launched last week, HCCI said it will allow researchers and policymakers access to regularly updated, de-identified data generated at approximately 5,000 hospitals. Among those health insurers providing claims data are Aetna, Humana, Kaiser Permanente, and UnitedHealthcare. HCCI will also have access to some government data from Medicare Fee For Service and Medicare Advantage activity.

Roy Goldman, Humana's VP and chief actuary, told InformationWeek Healthcare that Humana believes HCCI will be a good source of data for informing the public on issues that relate to healthcare costs and utilization.

"The timely, independent reports and analysis will not only benefit the public but will also benefit regulators, policymakers, and employees," Goldman said. "Humana does believe it is important to have an independent third party to conduct the analytics in order to streamline the process and provide a view independent of health plans."

[Which healthcare organizations came out ahead in the InformationWeek 500 competition? See 10 Healthcare IT Innovators: InformationWeek 500.]

Among the goals outlined by HCCI is to promote independent research and analysis on the causes of rising U.S. health spending, and to provide policymakers, consumers, and researchers with more transparent information that can identify the triggers that increase costs.

"Kaiser Permanente joined HCCI because we agree that understanding cost drivers in healthcare is important," Holly Potter, a spokesperson for Kaiser Permanente, said in an interview. "As an integrated healthcare system, we have a unique set of data and hope our participation will provide a well-rounded foundation for identifying the true underlying drivers of costs,"

If the federal government's healthcare cost projections hold true, U.S. health spending could rise from approximately $2.6 trillion today to $4.6 trillion, or 19.8% of GDP, by the end of the decade.

"Many actuaries agree that healthcare costs are on an unsustainable path, and the need to study the underlying drivers of costs is more important than ever," Donald J. Segal, president of the Society of Actuaries, said in a statement. "The Institute will enable objective and unbiased research to quantify these drivers, and hopefully lead to solutions to the cost crisis."

HCCI, which is an independent and nonprofit entity, will be led by Martin Gaynor, the E.J. Barone professor of economics and health policy at the Heinz College at Carnegie Mellon University. Beginning in 2012, the organization plans to publish its own scorecard rating system and to support analysis on aggregate trends of healthcare cost and utilization.

"Unfortunately, the existing public data derived from Medicare and Medicaid activity aren't enough to form a complete, up-to-date picture of national cost drivers and trends," Gaynor said. "HCCI will provide, for the first time, researchers access to data that covers all ages and health issues and is national in scope. Perhaps most importantly, for the first time there will be comprehensive data on the privately insured who make up the majority of health consumers in the United States."

In accordance with the Health Insurance Portability and Accountability Act (HIPAA), HCCI said it will de-identify the data and intends to establish a data integrity committee to focus on areas associated with data privacy, security, and integrity. This will include the establishment of data contribution agreements between HCCI and organizations supplying data. For researchers, the Institute will establish data-use agreements that outline specific limitations and meet HIPAA compliance and other legal requirements.

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