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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.
  Mimi Azrael
               Maryland Health Care Access and Cost Commission
                Annual Report on Expenditures and Utilization
                              February 1, 1996
       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
       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.
  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
       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
       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
       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
            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
       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