'There's trillions of rows of data here': Payers' prices are now public — when will they become usable?

Since July 1, payers across the country have been required to publish the price of nearly every service they have negotiated with providers. In that time, companies have raced to extract and analyze that data in a way that is shaping up to be a complete transformation of how the cost of care is set and negotiated in the U.S.

"These new transparency regulations lay the foundation for a market-based healthcare system and represent a dawn of enlightenment for patients, the physicians who help them coordinate their care and policymakers," former CMS Administrator Seema Verma said July 22 in a LinkedIn post.

One major hurdle has been evident from the start: The size of the data files being uploaded online is massive. It is so large, in fact, that CMS delayed implementation of the price transparency rule for six months over compliance concerns from payers.

"This raw data at the consumer level is really not very helpful," Blue Cross Blue Shield Minnesota President and CEO Dana Erickson told Becker's. "We have to go to where we can take the data and make it actionable for consumers to make better healthcare decisions."

Payers are taking actions to make their data consumable for the public. According to AHIP, nearly 94 percent of commercial insurers currently provide their members with online care cost estimator tools, which is well ahead of the 2023 CMS deadline that will require the tool for 500 services. By 2024, the cost of all services must be included within those tools.

"For patients, their health insurance providers are the best resource for individualized cost information," the insurance trade group wrote July 14. "While third-party developers may create price transparency apps or tools using this data, they can't deliver accurate, real-time and personalized cost estimates to help consumers make informed decisions."

The process of extraction

Third-party developers disagree, however. Leon Wisniewski is the founder of Health Cost Labs, a data sourcing company based in Audubon, Pa. He also is pricing director at Atlanta-based Medxoom, a company that will take the compiled data and make it transactable so that anyone can purchase care directly from providers.

Mr. Wisniewski has spent the last month looking through files uploaded by Blue Cross companies, Elevance Health, UnitedHealthcare and Cigna. He said Elevance alone uploaded a file with 14 million links, though only 6,000 links contained unique service rates. The reason for duplicates is self-funded groups usually share the same rates, but they each have their own file for every service. There is so much data that Health Cost has paused analyzing it to focus on how to best extract it, and then scale that process.

"There's trillions of rows of data here that have to be figured out how and made consumable so that people can make an informed decision," Mr. Wisniewski told Becker's. "Our focus is on understanding how to efficiently extract the data from these files."

UnitedHealthcare's website even warns that it could take up to five minutes to load its data, and once it does, there are more than 45,000 entries listed by the year and name of the plan or employer for job-based policies.   

Extracting that data is easier said than done, and Mr. Wisniewski said he knows of only a handful of companies that are working on it. The process requires a lot of computer hardware and memory space and anywhere from 18 to 24 months to get started on the needed research and software building. He said he has heard of companies walking away from the data entirely because of the volume, citing it as cheaper to simply buy the data one's company needs than analyze the entirety.

"I really don't know how you get into the space if you're just getting started, because other companies are way ahead of you with it," he said. "You had to be at the door when the lights turned on."

One of the companies in the room from the beginning is San Diego-based software developer Turquoise Health, which has been working to aggregate rate records since 2020. On July 12, the company said it was partnering with San Francisco-based software solutions firm Komodo Health to create a scalable platform that will allow consumers to see the full cost of healthcare services and help streamline payer-provider contracts.

Projecting a timeline

In the meantime, the race is on to launch what Mr. Wisniewski said should be a cloud-based solution on the market. He estimated the timeline for extracting all payer data to launching downloadable files will take around eight months starting from when the rule went into effect.

The good news for those analyzing the data is there are a lot fewer payers than providers, which had their own price transparency rule go into effect at the start of 2021. Compliance with and enforcement of that rule is another story, and it remains to be seen how it will pan out with payers. In February, CMS warned 342 hospitals they were not in compliance with the rule and fined the first health system in June for violations. Insurers, meanwhile, face fines of up to $100 per day for each violation and for each individual affected by the violation.

Even if many hospitals are not complying, how the data that is available is being used offers insight into how the usefulness of payers' data will develop. Right now, Health Cost Labs sells provider rates through subscriptions, and other providers are not the only entities buying access to those rates. Employers are now looking to see who has the lowest rates in their respective markets, which will only increase once the payer data is widely available. 

"You don't really need new contracts or negotiations with price transparency, because there's already a low contract in the market," Mr. Wisniewski said. "You can just move your book of business to that carrier and leverage their rate. The hospital should set one price for a code and then you let competition and the free market fix the problem."

Mr. Wisniewski said he expects app developers to purchase his data to create consumer products that will find where the cost of care is cheapest in every city. He said there already has been interest in partnerships where companies "can just put their technology on top of our data."

But Mr. Wisniewski added there is another issue worth monitoring: an entire middleman industry dedicated to medical cost containment that has never used price transparency tools.

"Price transparency, in my opinion, replaces a lot of what they used to do. It's changing the culture and people will have to accept there's a new reality, a new playbook," he said. "They have to bake this transparency data into the product if they want to be relevant, because nobody can be buying costs and payment solutions that don't incorporate price transparency."

For now, payers have the only price calculator tools available for their members to easily understand how much their services will cost — and in the long run, AHIP claims those will remain the best resource.

"We have access to not only just the cost data, but how to help people anticipate their needs," Ms. Erickson said. "It's one thing for me to be presented with thousands and thousands of rows of data. But if my insurance company can help me recognize that I might be heading toward a back surgery based on what's happening in my life and helps me anticipate healthcare needs that may be coming, that's really bringing in the benefits and cost perspective."

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