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State All-Payer Claims Databases: Tools for Improving Health Care Value, Part 1

How States Establish an APCD and Make It Functional

Abstract

  • Issue: All-payer claims databases (APCDs) can facilitate state efforts to control the rising cost of health care and increase its value. By aggregating data on the health care services that health insurers and public programs pay for, they offer a broader perspective on cost, service utilization, and quality than any single entity can provide. An increasing number of states are creating or are implementing APCDs.
  • Goals: Synthesize experiences and lessons learned from the creation and implementation of eight diverse, state-level APCDs, including their intended uses, formation, governance, funding, staffing, use of vendors, sources and types of data collected, linkages with other data, analytic capabilities, and privacy practices.
  • Methods: Interviews with APCD staff and stakeholders and a review of documentary evidence.
  • Key Findings and Conclusions: State approaches to APCD development varied from governmental initiatives and public-private partnerships to voluntary efforts. Successful implementation requires engaging with stakeholders; establishing salient use cases; determining a suitable governance structure; securing sustainable funding; setting realistic implementation goals and timeframes; and ensuring data quality and analytic rigor while protecting data privacy.

Introduction

Identifying and addressing the drivers of high health care costs are more important than ever. Growth in health care spending has been a major component of growth in state budgets, which are being strained by a decline in tax revenues during the COVID-19 pandemic.1 The high cost of health care is also reducing employers’ ability to maintain health insurance benefits, especially during an economic downturn, and continues to burden consumers with out-of-pocket expenses that compete with other basic needs.2

Controlling health care spending and ensuring its value require having systemwide information on costs, utilization, and quality of services that no single purchaser or payer can produce. To construct a more comprehensive picture of the health care delivered to their residents, 21 states have created or are implementing all-payer claims databases (APCDs) to collect and aggregate information on payment for health services from commercial health insurers, some self-insured employee benefit plans, and the Medicaid and Medicare programs (Exhibit 1).3 Another 11 states have indicated strong interest in doing the same. In several states, stakeholders such as health care systems, purchasers, and researchers have voluntarily created APCDs.4

This report, the first in a two-part series, summarizes the experiences of eight state APCDs. The purpose is to inform states what to consider when creating an APCD, and help states realize the potential of their APCD. Study sites (Exhibit 2) were selected to exemplify diverse approaches and contexts for implementing an APCD as well as the challenges and benefits of doing so (see the section, “How This Study Was Conducted” in the full report). The APCDs, which have been in operation for four to 17 years, were also selected to highlight advanced uses of data (as described in the companion report). This series builds on existing research,5 including a previous case study examining how Massachusetts leverages data generated by its APCD to inform a statewide cost-containment agenda.6

Notes

1. The Urban Institute, “State and Local Expenditures: How Have State and Local Expenditures Changed Over Time?” (Urban Institute, n.d.); Manatt Health, “Understanding the Fiscal Impact of COVID-19, the Economic Downturn, and Recent Policy Changes” (Woodrow Wilson School of Public and International Affairs, June 5, 2020).

2. The share of U.S. workers with out-of-pocket health care expenses (excluding premiums) greater than 10% of their income increased from 10% in 2003 to 29% in 2018; see Sara R. Collins, Herman K. Bhupal, and Michelle M. Doty, Health Insurance Coverage Eight Years After the ACA (Commonwealth Fund, Feb. 2019).

3. Some writers use the term Multi-Payer Claims Database to reflect the fact that a database may not include all payers. We use the term All-Payer Claims Database to reflect common usage and the aspiration of these tools.

4. The APCD Council, Interactive State Report Map, accessed May 1, 2020.

5. Denise Love, William Custer, and Patrick Miller, All-Payer Claims Databases: State Initiatives to Improve Health Care Transparency (Commonwealth Fund, Sept. 2010); Jennifer Ricards and Lynn Blewett, Making Use of All-Payer Claims Databases for Health Care Reform Evaluation (U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, July 2014); Stephanie Cohen and Lynn Quincy, All-Payer Claims Databases: Unlocking Data to Improve Healthcare Value (Altarum Healthcare Value Hub, Sept. 2015); Josephine Porter and Denise Love, The ABCs of APCDs (California Health Care Foundation, Nov. 2018).

6. Lisa Waugh and Douglas McCarthy, How the Massachusetts Health Policy Commission Is Fostering a Statewide Commitment to Contain Health Care Spending Growth (Commonwealth Fund, March 2020).

Publication Details

Publication Date: December 10, 2020
Contact: Douglas McCarthy, Senior Research Advisor, The Commonwealth Fund
Citation:

Douglas McCarthy, State All-Payer Claims Databases: Tools for Improving Health Care Value, Part 1 — How States Establish an APCD and Make It Functional (Commonwealth Fund, Dec. 2020). https://doi.org/10.26099/06qz-1m31

Experts

Douglas McCarthy
Senior Research Advisor, The Commonwealth Fund