An All Payor Claims Database Can Help Control Healthcare Costs

“The overarching goal of establishing an all payor claims database for Texas is to facilitate state efforts in controlling the rising costs of health care by helping increase competition and transparency in our health markets.”

–Rep. Armando Walle

We know that in health care, prices are a major problem. And one of the biggest reasons why prices are a major problem is price variation. This is where the same service can cost up to ten times differently based on who is paying or where it is received. How we get more information about price variation is by collecting provider-specific data on pricing and what is being paid for claims. An all payor claims database is an important tool for collecting data and improving price transparency so that researchers can identify market inefficiencies and employers can make informed decisions about how to reduce health care costs.

Out of control health care costs are neither new – nor are they unique to Texas. According to the Texas Comptroller’s office, in 2015 Texas spent “43.1 percent of all its appropriations from state, federal and other sources” on health care. And, yet, forty states spent more per capita on health care than Texas that year. Between 2011 and 2015, state government health care spending exceeded the growth of inflation and the Texas population.

ANNUAL AND CUMULATIVE RISE IN TEXAS HEALTH CARE SPENDING VS. POPULATION AND INFLATION, FISCAL 2011-2015

ANNUAL AND CUMULATIVE RISE IN TEXAS HEALTH CARE SPENDING VS. POPULATION AND INFLATION, FISCAL 2011-2015

The Health Care Cost Institute conducted a study of health care costs in employer-sponsored plans from 2014-2018 and found that, “after adjusting for inflation, prices accounted for three-quarters of spending growth.” And out of control – and unpredictable – pricing has a real impact on Texans’ personal and financial health. In this year’s Texas Voter Poll, 1-in-3 Texas voters – including 57% of women with children – said they or someone in their household had postponed or skipped medical treatment due to a lack of transparency about final medical costs. 90% of Texas voters believe patients should be informed about medical costs before treatment. And nearly 1-in-4 Texans has an average over $1,000 of medical debt in collections.

Urban League data on Texas Medical Debt

Thankfully, there is a way out. A 2019 evaluation of health care prices conducted by RAND found that “the wide variation in prices is notable, and addressing this variation can lead to substantial reductions in medical spending.” That’s why a Texas all payor database is so important. And it’s important that it is done right. While we need to make sure that data does not include personally identifiable patient information, we do need to make sure that the actual provider-specific information is available to the public and researchers as well as to employers so they can make informed decisions about how to reduce health care costs.

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