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Maryland health claims database
Maryland issued its first Annual Report using data "voluntarily" contributed
by 10 private payers and Medicare and Medicate. Th 10 private payers' data
-- now in a state-adminstered database, having moved without patients
knowledge or consent from the private sector to the public sector --
contains personal identifiers about each patient, including exact date of
birth; patient's home zip code, sex, race, and patient identifier (i.e.,
subscriber number believed to be SSNs from payers using SSNs as patient
identifiers). The full report is 70 pages long and can be obtained from the
Maryland Department of Health and Mental Hygiene, Health Care Access and
Cost Commission ("HCACC"), 4201 Patterson Avenue, Baltimore, MD 21215. Two
copies per organization.
The Preface, Executive Summary and Introduction are attached to this post.
Providers, consumers, and taxpayers generally are outraged that personal
information about their health care treatment has crossed the private/sector
border without their knowledge or consent. HB557 has been introduced into
the Maryland General Assembly by Delegate Jim Kelly. Known as the Informed
Consent Bill, HB557 requires prior informed consent by all patients before
personal information about patients enters the state database.
Maryland's database is the first database of its kind in the country and
will set the precedent and example for other states to follow its lead in
collection not only claims data for utilization, cost containment and access
studies, but also personal identifiers without patients' consent. Please
e-mail me to come forward to help.
Thanks.
Mimi Azrael
Maryland Health Care Access and Cost Commission
Annual Report on Expenditures and Utilization
February 1, 1996
i. ACKNOWLEDGEMENTS
The Annual Report on Expenditures and Utilization would not have
been possible without the participation of the twelve payers that
provided information on health care encounters. The Commission
recognizes that in providing these data, the contributors were required
to dedicate considerable staff and computer resources to our needs. The
experience that the Commission has gained through working with this
vanguard group will be invaluable as the data collection effort expands
in the future. The Commission is most grateful for the help of these
organizations. A special thank you is directed to the many individuals
in these organizations that spent the time to answer questions and
review results. These efforts broadened our knowledge and saved us from
mistakes. In addition, the Commission thanks payers that completed an
aggregate expenditure survey used to develop the State health care
accounts.
The Commission also appreciates the assistance of the practitioners
in the State, particularly, Advanced Practice Nurses Psych/Mental
Health, Maryland Chiropractic Association, American Physical Therapists
Association of Maryland, Maryland Podiatric Medical Association,
Maryland Psychological Association, Maryland Psychiatric Society and the
National Association of Social Workers-Maryland Chapter that assisted in
the distribution of a practitioner survey.
The Commission is grateful for the considerable support from
friends and colleagues throughout Maryland and beyond. In particular
the Commission wishes to thank the staffs of the Health Services Cost
Review Commission (HSCRC) and the Health Resources Planning Commission
(HRPC) for making information they collect available to us. Nduka Udom
of HSCRC deserves a special thank you for preparing hospital expenditure
tables used in the state health care accounts analysis. Christopher
Hogan at the Physician Payment Review Commission provided valuable
assistance in the development of the type of service categorizations
that appear in this report. His help has enabled the Commission to
summarize detailed information on services and procedures in a more
meaningful manner. Stephen Long, Susan Marquis and Jack Rogers from the
Robert Wood Johnson Foundation Technical Advisory Panel provided the
Commission staff with valuable advice in the development of the State
health care accounts. Kathleen Levit of the Health Care Financing
Administration assisted in the review of the State health care
account estimates.
The Commission wishes to thank Dr. Mary E. Stuart and the Data Base
Work Group, along with the many organizations and individuals that have
offered comments during the planning and development of the Interim
Medical Care Data Base and this report. Of particular importance has
been the work provided by the Delmarva Foundation for Medical Research,
the Commission's technical reports and independent verification and
validation contractor.
A most important thank you is lastly reserved for Dr. Henry Miller
and the entire project team from the Center for Health Policy Studies.
Their assistance throughout this entire effort is a significant factor
in any success the report will enjoy.
ii. PREFACE
Throughout the extensive debate on health care reform on both the
national and local levels, the one unifying theme was that health care
costs were out of control. It seemed as though one could hardly read
the opening paragraph of an article in either the popular or academic
press without running across a citation of the percent of the gross
domestic product (GDP) that was dedicated to health care; how that
figure had risen so rapidly over the past two decades and how much
higher it was in the United States than in any other country in the
world. For the most part, however, the discussion ended there, because,
except in a very few cases, detailed information on the nature and
extent of cost increases was simply not available.
Lack of timely and detailed information did not prevent people from
speculating about causes of cost increases. The State of Maryland,
however, chose a different course, one based on fact rather than
fiction. Building on a two decade long tradition begun by the Health
Services Cost Review Commission, the 1993 Session of the General
Assembly enacted health care reform legislation that had, as one of its
most far reaching elements, the creation of the Interim Maryland Medical
Care Data Base. At the core of the legislation's intent was a belief
that information should be used to encourage competition to lower costs
and improve quality.
The Health Care Access and Cost Commission's ("HCACC's" or
"Commission's") enabling statute requires the establishment of a
statewide Medical Care Data Base of health care services rendered by
practitioners and office facilities, to be used as "a primary means of
compiling and reporting data and information on trends and variances
regarding fees for services, cost of care, regional and national
comparisons, and indications of malpractice situations." Health-General
Article, ^U19-1502(c)(7). The legislature envisioned a data base that
would support the development of cost containment strategies and assist
consumers, practitioners, payers, and policy makers to make decisions
about health care services. Although the legislature was specific on
the minimal demographic and health service information the data base
must contain, the HCACC was given flexibility in determining additional
data elements. This flexibility gives the Commission the opportunity to
build a consensus among all the various stakeholders on information the
data base should contain, while recognizing that uses of the information
will not always be the same. For example, the types of data needed by
practitioners to assess how the cost and utilization of their services
compare with those of their peers differ from the information consumers
would find useful in determining their choice of health insurance
services or particular providers.
From this data base, the Commission is directed to produce annual
reports beginning October 1995 on: (1) the total reimbursement in the
State for health care services generally and for certain specialties and
procedures; and (2) the statewide variations in fees and utilization of
health care services by health care practitioners and office facilities.
This report presents these two types of information --aggregate health
care cost information and detailed procedure-level utilization and
cost --for the first time. Although this is an important milestone, the
HCACC recognizes that this is just the first step in a much longer
process. The Commission expects that this first report will raise far
more questions than it will answer, and that over time the data base
will mature and become increasingly capable of providing purchasers,
providers, payers, and policy makers with important insights and
invaluable information on health care costs and trends.
It is as important to note the limitations of the data included in this rep
analyze the results. As described in greater deail in the body of the reoprt, t
information was voluntary and relied on thecooperation of a number of private an
payers. We are grateful to the ten private sector payers who agreed to particip
same time, we recobniae that the chapter on practitioner payment and utilization
contain a full representation of information from health maintenance organizatio
operating in the State. Thus, at this time, inferences regarding that section o
be tempered. In a similar vein, the aggregate healthc are cost analysis (or Sta
Expenditure Accounts) must rely on combining detailed information fromc ertain s
hospitals) with aggregate estimates for other sectors. Furthermore, this is the
its kind to report health cost information on Maryland residents and not on Mary
providers. As a result, complicated issues such as border crossings had to be c
less than complete information. Despite these caveats, the Commission believes
report is well worth the effort and is but a first step in more complete data co
reduce limitations that have been encountered thus far.
ii. EXECUTIVE SUMMARY
Introduction and Background
In 1993, the Maryland General Assembly enacted
legislation creating the Health Care Access and Cost Commission
("HCACC," or "the Commission"). The legislation recognized that
meaningful debate on health care expenditures and access could not
occur without the benefit of accurate information. Thus, the
Commission was directed, among other things, to construct a
medical care data base to be used as a "primary means of compiling
and reporting data and information on trends and variances
regarding fees for services, cost of care, regional and national
comparison, and indications of malpractice situations." Health-
General Article, ^U 19-1502(c)(7). From this data base the
Commission is directed to produce annual reports on: (1) the
statewide variations in fees and utilization of health care
services by health care practitioners and office facilities; and
(2) the total reimbursement in the State for health care services
generally and for certain specialties and procedures beginning
October 1995. The statute also mandates the HCACC to use the data
base to establish health care cost annual adjustment goals.
This Annual Report on Expenditures and Utilization represents
the Commission's first step in meeting the statutory directive.
To complete this report, the Commission conducted one of the most
extensive data collection efforts ever undertaken in Maryland.
The results of this effort provide a first glimpse on expenditures
and utilization in the $13.3 billion health care industry in the
State.
This report is the result of cooperative activities by the
Commission, other state and federal agencies, payers, and
practitioners operating in Maryland. To provide background
information on the health care system in the State, the Commission
obtained already existing data from the Department of Health and
Mental Hygiene, the Health Resources Planning Commission, the
Health Services Cost Review Commission, and the Maryland Insurance
Administration. National data sources were also tapped to provide
benchmarks against which the Maryland information could be
compared. No existing data sources existed in the State for the
analysis of health care expenditures and physician services.
Under the authority granted by the legislature in the enabling
statute, the Commission collected claim and other aggregate
information from private sector payers, as well as from Medicaid
and Medicare to form the Interim Medical Care Data Base. Given
that this initial report represented a first step, and that
existing data collection capabilities among private sector payers
varied greatly, the Commission did not mandate submission of
detailed encounter data or even aggregate information. Most major
payers whose information systems contained the needed information
submitted data voluntarily. Many other payers whose information
systems were not as sophisticated provided aggregate information.
The Commission is extremely grateful to the twelve payers that
provided detailed encounter information and the other payers that
submitted aggregate information.
Health Care Status and Resources
Population characteristics, health status, and available .
resources affect the use of health care services. Because data
are incomplete, the Commission cannot yet identify precise
linkages between these factors and utilization and expenditures,
Chapter 2 of this report highlights aspects of the Maryland health
care environment which impact on health care consumption. Health
care coverage is a major factor in determining access to health
care services. Maryland's working population without health
insurance (I 7 percent) is only slightly below the national
average, although estimates of the uninsured are for 1993, a time
prior to the introduction of small group market reform. The
Commission is currently examining alternatives such as
practitioner surveys for gathering additional information on
services used by the uninsured population. HMOs' share of the
privately insured market in Maryland is among the highest in the
nation. The continued growth of HMOs and other managed care
arrangements will likely have a significant impact on future
demand for health care resources.
The availability of health care resources in the State varies
significantly by expenditure category. Although the number of
hospital beds per capita are below the national average,
physicians and other health care professionals per capita are well
above national averages. Most analysts believe that excess
capacity in all expenditure categories exists nationwide. Health
care resources levels in Maryland must be interpreted cautiously
as many people travel across state boundaries to obtain care,
particularly hospital-based services.
State Health Care Expenditures
Constructing aggregate health care expenditures allows
purchasers of health insurance to identify how their use of health
care services compares to the State and subregions. Specific
provider groups can use this information to examine their share of
the health care dollar and its rate of change relative to other
provider groups. The analysis of aggregate expenditures in
Chapter 3 enables policy makers to examine how the use and mix of
services changes over time, by region and payer categories. As a
number of data sources were examined, including the detailed
encounter data, estimates presented in the chapter represent a
complete accounting of all services used by state residents. The
key findings from this analysis are summarized below:
The health care economy in Maryland was a $13.3 billion
industry in 1993 and represented 11.5 percent of
personal income for the State. Health care expenditures
grew by 4 percent from 1992 to 1993. The size and
complexity of the health care sector requires careful
monitoring in view of the substantial changes that
appear just over the horizon for private purchasers,
Medicaid, and Medicare.
Health expenditure categories are growing at
different rates. Although total hospital
expenditures (5-1 percent) physician
expenditures (5.5 percent) and was not
as rapid grew more rapidly than overall health
care spending, that growth as the increase in
home health care (14.4 percent) and other
professional services (6.1 percent).
Spendingfor government programs increased more
rapidly than private sector spending between
1992 and 1993. Total Medicare and Medicaid
expenditures increased by 9 percent and 7
percent respectively compared to an overall
increase in private sector spending of only 2
percent. Much of the Medicare growth was
driven by increasing enrollment, as Medicare
per capita spending increased by a mere I
percent. This compares to a 4 percent jump in
Medicaid and a 2 percent increase in private
sector spending per capita.
Use of health care services differs
substantially by payer, reflecting differing
population mixes, cost containment strategies,
and coverage policies. Only 7 percent of 1993
Medicaid payments were made to physicians, but
43 percent of HMO payments were for physician
services. By comparison, in 1993, 26 percent
of Medicaid expenditures were for nursing home
services. Overall, Medicaid accounted for 86
percent of total third party payments for
nursing home services.
Practitioner Payments and Utilization
Physicians and other health care practitioners accounted for
about one-third of total health care expenditures, yet
practitioners, through the services they provide, trigger use of
other health care services such as hospitals, outpatient clinics,
laboratories, and imaging centers. In Chapter 4, the Commission
presents an analysis of health care practitioner expenditures.
These results require more careful review as analyses are based on
encounter data provided by twelve payers including Medicare and
Medicaid. While the volume of information is significant, private
sector payers, particularly HMOs, are under-represented, and
information on uncompensated services is missing altogether. The
Commission believes that an analysis of this information is an
important first step toward providing a better understanding of
health care practitioner expenditures in the State, by payer
category, and among the regions. The key findings from the 1993
data are summarized below:
Procedures for diagnostic and therapeutic services
accounted for 69 percent of expenditures to
practitioners, with the remaining 31 percent
attributable to evaluation and management visits.
Surgeries of all types accounted for 25 percent, and
diagnostic procedures accounted for 18 percent of total
expenditures to practitioners.
Chest x-rays, psychotherapy, urinalysis, electrocardiograms,
and back manipulations by chiropractors are the most
frequently performed procedures in the State. These and
fifteen other procedures accounted for 30 percent of all the
volume of procedures performed.
Psychotherapy, cataract surgery, childbirth, echo exams
of the heart, and chest Xrays had the highest shares of
total expenditures. These and fifteen other procedures
accounted for 23 percent of total expenditures. These
findings must be interpreted with caution as some
specialties use a very limited number of procedures. A
significant share of all psychiatric services is
assigned to one high rank procedure code, and cataract
surgery accounts for 64 percent of total payments to
ophthalmologists.
The mix of services provided by primary and specialty
care practitioners differs markedly by payer category.
Although primary care practitioners provide 31 percent
of total services measured by expenditures, this share
ranges from a low of 23 percent for Medicare, to 31
percent for private payers and up to a high of 77
percent for Medicaid. These differences are
significant, and in future studies, the Commission will
examine how use of services differs among comparable
populations.
Regional differences in the use of services appear related to
the mix of specialties available. The Maryland suburbs of
Washington DC have the lowest use of primary care
practitioners (27 percent), despite also having the lowest
share of Medicare beneficiaries. In Western Maryland, with
the highest share of Medicare beneficiaries, primary care
practitioners provide 35 percent of the care. Primary care
practitioners constitute 41 percent of physicians in Western
Maryland and 38 percent in the Maryland counties that are
suburbs of Washington, DC.
Medicaid physician payment rates are significantly lower than
Medicare and the private sector, although, more recently,
private payers have also reduced
payment rates.
Conclusion and Next Steps
Discussions about potential health care reforms have shifted
significantly since the passage of the Commission's enabling
statute. It is clear that government alone cannot make the
changes that are needed in the health care system. Indeed, the
private sector has been the most successful in slowing the growth
of health care expenditures. Although rapid increases in costs
have abated, at least temporarily, many of the problems that
generated the need for information remain even as new questions
arise. Purchasers have intensified efforts to identify the best
values in an increasingly managed health care environment. The
Commission believes that collection of encounter data will enhance
these efforts, but the initial data collection that led to lead
to creation of the Commission's Interim Medical Care Data Base
identified weaknesses that must be improved upon. The key
findings are summarized below:
Further standardization of data submissions is
essential to efficiently construct a common data
base for comparing services. Recently adopted data
regulations (COMAR 10.25.06) will require
submission of data in standard formats using common
coding conventions. Standardization will benefit
practitioners by reducing coding differences among
payers.
HMOs are providing increasing amounts of care, and
information on these services should be obtained through
participation in data collection. The Commission
recognizes that HMOs pay for services under a number of
arrangements and will work with these organizations in a
cooperative manner. Beginning in 1996, the Commission
will collect information on all fee-for-service and
capitated specialty care services from HMOs through the
data collection regulations. The Commission believes
that these services constitute the majority of
encounters provided by HMOs. This data collection
effort, in conjunction with the HMO Quality and
Performance Evaluation System that also begins in 1996,
will provide Maryland with unparalleled information on
HMO services.
The Commission needs to further examine differences in
utilization patterns among payers. While some
differences exist by region and payer category,
underlying population differences confound possible
conclusions.
Extensive changes in health care are occurring outside of the
public eye today. Managed care is expanding in Maryland; evolving
hospital network organizations are beginning to purchase doctors'
practices; and doctors are forming medical groups and assuming
financial and insurance risk for health care. Reforms to Medicare
and Medicaid are imminent. No one seems to fully understand the
consequences of all these changes. Further, many people continue
to worry about the adequacy of insurance coverage and access to
health care should they become ill.
The health care debate is far from over. In a rapidly
changing health care environment, the need for objective
information is more important than ever. To meet this need, the
Commission intends to move ahead deliberately and responsibly in
its data collection efforts, cognizant of its obligation to
balance the legitimate interests of the many affected parties.
________________________________
Mimi Azrael <t182@mci.newscorp.com>
Azrael, Gann & Franz
101 East Chesapeake Avenue, Fifth Floor, Baltimore, MD 21286
Telephone 410-821-6800