The promise and peril of new Medicare data

Yesterday’s release by the Department of Health & Human Services of Medicare physician payment and service data–for decades out of public reach–holds great promise for journalistic exploration. Included in the unprecedented data dump: $77 billion in Medicare payments from 2012 for the some 800,000 doctors who treat Medicare Part B beneficiaries; the doctors’ names, addresses and specialties; the number of services performed; average submitted charges; average allowed amount that Medicare will pay; average price per beneficiary; and the number of beneficiaries that doctors treat.

Over the years, HHS had received many FOIA requests seeking this very information, and the American Medical Association has always opposed its release, arguing that it contained inaccuracies, could mislead, and could result in false conclusions. The Wall Street Journal and parent company Dow Jones played a key role in pushing to bring this information to light–something many news outlets failed to note in their initial coverage of the data, as New York Times public editor Margert Sullivan wrote, including the Times on that list.

Now that all reporters and news organizations–not to mention regular folks–can access this data, there is much to be learned about how practitioners provide care in their communities and how they are paid. Many news outlets have already begun that work–with much of the first day’s reporting focused on Medicare’s “top billers,” or the “sliver of doctors [who] get big share of payouts,” as a Times headline had it.

So how should reporters continue to wind their way through all the numbers (this will take time), and what are additional threads they might want to unravel over the coming days, weeks, and months? Here are some possibilities:

Investigate why prices are so high. To me, the biggest significance of the data is its potential to continue a conversation that has begun about why healthcare in the US is the costliest in the world. Our system is based on fees paid for services, which many experts believe has helped make care so expensive. Now, we get a comprehensive look at some of those fees. Why, for example, are they higher in one community than another? Although we’ve known for a long time, thanks to the Dartmouth Atlas, that the price of services varies widely among communities, the new doctor data gives us more tools to drill down locally. Why does one eye surgeon in a community get paid so much more than another for removing a cataract, for example? Why is more money spent on a given procedure in one part of the country versus another? I can picture a lot of good stories that dig into the reasons docs charge what they do. Why not assemble panels of local citizens to talk about the high cost of heathcare much the way news organizations have used such panels to gauge public sentiment about candidates in state and local elections? (Admittedly, this is an out-of-the-box suggestion.)

Find fraud and abuse. That’s an obvious one. Data that identify payment outliers–that is, doctors who charge or bill way more than their peers–could make it easier for reporters to spot those who might be gaming the system. And we know from the work of the Center for Public Integrity and ProPublica that they do. But, reporters should proceed carefully here and avoid assumptions (see caveats towards the end of this piece).

Underscore that price doesn’t always equal quality. While Americans have come to believe the medicine man sits at the right hand of God, as an HMO exec once told me, studies show that the quality of American healthcare is not always the best. While it’s still difficult to find good data on the quality of specialists, journos can take the data that does exist and match it up with this new payment data. Insurers are doing that now using their own data.

Help Medicare beneficiaries. How about doing consumer guides for those on Medicare, especially those who have Medicare Advantage (MA) plans which require a fair amount of cost sharing? Even though Wednesday’s data release does not include information about the care of the some 13 million people who have MA plans, knowing the prices of various services from different docs in the community might be helpful if those seniors are inclined to switch providers. Physician payment data might be less useful to those who have bought those cheap policies on the exchanges–the ones that call for 30, 40, or 50 percent coinsurance for various services. Charges docs submit to Medicare may be different than what they charge to treat commercially insured patients. They may charge them more to make up for what they claim they lose on Medicare business.

Monitor charges of outlier practitioners. Doctors, too, will now be able to see how their charges compare with others providing similar services. For years insurers have told providers in their networks how they rank with their peers when it comes to quality measures such as giving certain tests to diabetics. Insurers have told me that step often helps those with poor scores give better care. The same might happen with prices. Late last year, I interviewed officials at Independence Blue Cross in Philadelphia who had set up a system of tiered networks with consumers paying more if they wanted to use doctors and hospitals that charged Blue Cross more for their services. Blue Cross told me some of the hospitals with higher charges voluntarily lowered them in order to belong to the carrier’s lower-cost network tiers. It’s too early to say the HHS release will bend the proverbial cost curve, but it’s something to watch. Presumably HHS will continually update these data. How about watching how the doc charges change over time?

With promise also comes peril, and reporters need to use and interpret the data with care, as Charles Ornstein wrote at the Association of Healthcare Journalists Covering Health blog. As Ornstein notes, the data set is enormous–not something to be analyzed in Microsoft Excel–and that “could well serve as a barrier for smaller news organizations,” he writes, suggesting partnerships with academic institutions or other news outlets. Among Ornstein’s other sensible caveats for reporters: keep in mind that while this data is vast, there is still plenty that is not included (private insurance payments, for one); and, there are legit, non-fraudulent reasons a doctor might receive large payments from Medicare (several doctors in a practice may bill under one doctor’s name, for example).

In sum: working with this data will take time; don’t rush to conclusions. Those “top billers,” for example? They are, as Sarah Kliff put it at Vox on Wednesday, “likely really great doctors–or they might be criminals. We don’t know which quite yet.”

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