Bringing Data Analytics to Virginia Healthcare

Beth Bortz, CEO of the Virginia Center for Health Innovation

A big reason the healthcare debate in Washington has gone nowhere is that it’s all about who pays for healthcare, not how to create better outcomes at lower cost. For every winner, there’s a loser, and that’s a recipe for gridlock. Meanwhile, medical costs continue climbing. Ultimately, everyone loses.

The business of figuring out how to improve outcomes and reduce costs gets a tiny fraction of the media attention, but if there’s ever going to be a solution to the healthcare crisis, it will come from stretching healthcare dollars, not redistributing them. As it happens, Virginia is taking the lead in an initiative that may help “bend the cost curve.”

Five Virginia health plans are taking part in a pilot program funded by private foundations and led by the Catalyst for Payment Reform (CPR), a nonprofit group that seeks to measure “which strategies are having the desired impact in the market,” reports Virginia Business magazine. Virginia will be one of only three states selected to participate, says Beth Bortz, CEO of the Virginia Center for Health Innovation, which coaxed Virginia’s five insurance companies into sharing their data. (Two other insurers have yet to commit.)

Each of the participating companies — Aetna, Anthem, Optima, UnitedHealthcare and Virginia Premier — possesses vast quantities of data on healthcare expenditures and outcomes. But data residing in five silos isn’t as valuable for analytical purposes as a database encompassing all five. Reports Virginia Business:

The key goal is to identify health-care payments in commercial and Medicaid sectors that are “value oriented,” which CPR defines as effective treatments combined with a reduction in unnecessary spending. That means the project’s intent isn’t just to find effective treatment. “We’ve been about advancing value,” Bortz says. “It’s not quality at any cost.” …

Involvement with CPR will help a project VHCI has already begun. It is a data-based measurement of health care called the Virginia Health Value Dashboard. Its purpose “is to prompt action for improving the value of health-care services,” says VHCI.

Examples of “low-value” care that the dashboard project is targeting include: avoidable emergency-room visits, hospital readmissions and the use of high-cost service sites when less expensive options are available. The “high-value” care examples include: up-to-date vaccinations, smoking cessation programs, better screening for cancer and improved management of chronic conditions such as diabetes.

The goal is to have in place by January a dashboard tool for groups that provide, buy or fund health-care services to use in evaluating various costs. Being part of the CPR’s project is a big step toward that goal. “It costs money to get good data,” Bortz says.

Bacon’s bottom line: It would be great if Virginia could bend the cost curve. Households could find some relief from the relentless squeeze on their pocketbooks. More people could afford afford insurance coverage. And, to the extent that healthcare is a big chunk of employee compensation, Virginia businesses could gain a competitive advantage.

There is a gap, however, between knowing what the best practices are and actually putting them into place. The political economy of healthcare in Virginia is riddled with special interests that benefit from laws and regulations that stifle change. Many regulations — mandated benefits, medical licensure, the Certificate of Public Need process — create incentives for perverse behavior. The best data in the world won’t do much good if health care providers don’t do anything with it. So, while the CPR initiative is a positive development, Virginia has much work ahead to create the conditions where healthcare insights will be acted upon.

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6 responses to “Bringing Data Analytics to Virginia Healthcare

  1. If other countries spend far less on healthcare than we do – cover all their populations – and have longer life expectancies..

    why are we – at the least – not looking at how their systems keep costs down?

    Also – whenever you have some centralized top-down control of health care where they consider the cost of something versus the “outcome” … what you’re essentially talking about is restricting access … i.e. for instance.. who can get an MRI that is “covered” and who might not. Who would qualify for some fairly expensive treatment – and who would not. If you have one kidney do you give it to the 82 year old or the 8 year old?

    These are things the free market does not do.

    The free market gives the kidney to the 82 year old if he is willing to pay more for it than the 8 year old’s parents can.

    Do you let the free market make these decisions or do you have some kind of centralized/govt control that decides ?

    • I suspect this is the answer to your first question: “The political economy of healthcare in Virginia is riddled with special interests that benefit from laws and regulations that stifle change.”

      As for the allocation of care: the extremes at both ends of that spectrum — allocation solely by dollars, solely by bureaucracy — yield unacceptable results, yet both are necessary. How can we blend these with other criteria and build in corrective measures that steer the system back to the middle if either extreme threatens? What happened to bipartisanship, problem solving, and compromise?

    • Larry – you might find this interesting.

      An article that argues the U.S.’s expenditures on health care is “about right.” I’d be interested in comments. I thought it was interesting and thought provoking. That also means it would likely sail over the heads of the MSM. 😉

  2. Re “we have a bigger GDP so we should pay more? Remind me again why I should give any credence to National Review…?

  3. My reaction was “yes” and “no.” Of course, a wealthier society can afford to spend more on health care than one with a lower GDP. Look at money spent on vacations and travel.

    But, at the same time, that doesn’t mean medical services in the United States are not overpriced or the process somewhat inefficient.

  4. Sounds like another group being established to admire the problem rather than solve the problem. That insurance data has been pretty well analyzed already. Maybe they’ll find something new but I wouldn’t bet on it.

    I wish Virginia would focus on solving the problem rather than just analyzing the data. Healthcare in America is an inefficient fiasco. LarrytheG is right – a lot of vested interests want to keep it that way, not least of all the doctors.

    Here’s what coming …

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