Public Health Data Wins

Posted by Josh Rosenthal on August 10, 2015 
EY isn’t your typical innovation award or challenge.  They look at your overall value.  Not just how much revenue and profit you’ve generated, but how much value you’ve created in the market.  Not to mention your potential for creating a massive upside and doing social and public good.  That’s why winning the EY award is a stunning win for public data and a huge vindication as the data liberation movement moves from adolescence and gets serious about using public data to create market value.
To be honest, it isn’t that hard.  The Centers for Medicare & Medicaid  (CMS) are doing a huge portion of the work, fundamentally transforming the way that money flows in the healthcare ecosystem, then releasing the data, which, once worked up and bumped against other data sources, lets us see which doctors, groups, primary care physicians and specialists, hospitals and post-acute centers will succeed in the new Pay for Value world.  Knowing who will generate profit for whoever owns the risk of a population is a massive value proposition that can be monetized by both health plans and providers in a variety of different ways.
But let’s back up a second. As a country last year, we spent about $850B (yes, that’s Billion with a B) on health care with up to 42% of patients receiving no value treatment in any given year.  For those just catching up, thirty cents of every dollar spent on medical care is unnecessary.  That sounds unbelievable but it’s true.This dwarfs fraud, waste and abuse and, if unnecessary spending were successfully mitigated, not only would patients have fewer complications and negative outcomes, they would have better experiences and fatter pocket books.  We’ve known this for decades from folks at the Institute of Medicine to swanky consultants.  It’s not outright fraud, waste or abuse, but a grey area where providers can choose higher intensity treatment options when lower intensity care, or in some cases, no treatment, has the same or even better outcomes.  The most famous cases include back pain and choosing a concrete injection, a higher intensity treatment option, as opposed to pain management or physical therapy, lower intensity treatment options.  The outcomes are identical, but the cost for the higher intensity options is magnitudes of order larger. More importantly, think tankers, such as Elliot Fisher of the Dartmouth Institute, note that there would be more than enough care for everyone in need.  How’s that for a social good?
But who defines unnecessary spend?  The folks at Dartmouth, including David Wennberg, the director Emeritus and member of RowdMap’s advisory board, put together oodles of research and even a nifty publicly available data set with the definitions and geographic ratios in the Dartmouth Atlas of Unwarranted Variation.  As of late, the concept has gone mainstream.  Choosing Wisely includes over 70 medical specialty societies and Atul Gawande’s popular New Yorker article, “Overkill: An avalanche of unnecessary medical care is harming patients physically and financially. What can we do about it?” was something of a coming out party for the concept.
But why does unnecessary spend happen and what does it have to do with public data?  That thirty cents of every dollar that goes to no value care is a function of each doctor’s unique fingerprint in practicing medicine.  Some of this is educational.  Some is preventative measures against malpractice.  Some is simply preferring to over-treat rather than face the experience of a negative outcome that could have been prevented with a more aggressive option out of the gate.  But most of the research indicates that unnecessary spend is the effect of a perversely incentivized payment model known as Fee for Service, which has dominated the healthcare system for the past few decades.  In Fee for Service, you get paid more for doing more things.  And paid even more for higher intensity things, even when lower intensity options are available.
From a policy perspective, containing the thirty cents of unnecessary spend in government programs is the real target, and is why you’re seeing a shift to Pay for Value arrangements by outsourcing to payers through Medicare Advantage and Exchange Markets, and to providers through Managed Shared Savings Programs and Accountable Care Organizations.  These are mechanisms to align the classic triple aim goals with  medical economic programs that incentivize appropriate cost containment, a core requirement for supporting an aging population and a more equitable distribution of access to care across all socio-demographics.
CMS announced goals of sun-setting half of Fee for Service by 2018, then began enforcing this by paying flat fees to orthopedic specialists on the procedures and prescriptions that account for the largest amount of unnecessary spend.  The day after that announcement, the Health Care Transformation Task Force was formed, a group of payers and providers committed to putting 75% of their business in Pay for Value arrangements, an organization to which RowdMap actively contributes.  That sounds nice but most folks think payers and particularly providers will face a series of notable challenges in making this transition.  Recently RAND and the American Medical Association identified data and informed economic decision making as core hurdles for doctors and networks.
Fortunately, CMS has made historic data releases including part B and D provider data sets, the largest provider data sets in history.  These releases were a long time in coming.  Many organizations, including RowdMap, filed Freedom of Information Act Requests to obtain these data.  Other organizations weighed in and opposed these releases for various reasons.  The releases made national news for sensational outliers and headlines focused on fraud, waste and abuse.
But that isn’t the real story.  The power of this data lies with the ability to use it to identify unnecessary spend, which, as we’ve seen, is the real target of, and lever for, transforming the health care system.  Once coupled with the public referral sets, public data sets on populations, health behaviors, prevalence and costs and additional public data sets on unwarranted variation, the stage was set with all the pieces necessary to create national, regional and local benchmarks for identifying unnecessary spending and no value care, its concentration in a market, the providers responsible for it, and the major clinical conditions and care pathways or value chains where this occurs.
In other words, using public data, we can see who is responsible for unnecessary spend, and, frequently as a result, who is experiencing success in a Fee for Service model.  Using public data, we can also see who is mitigating unnecessary spend and creating value for whoever owns the risk.  That’s right, we know who will win in the Pay for Value world and the particular drivers behind that success.  We also know the things that providers currently optimized for Fee for Service will need to address to survive in the transformation.
That, in a nutshell, is what RowdMap does.  We use public data to help health plans and providers intelligently transition to successful pay-for-value arrangements.  For payers, that means finding the most Risk-Ready providers and partnering with them in risk arrangements grounded on these metrics.  A word of warning, often these metrics are not reflected in traditional actuarial unit cost analysis or utilization reviews.  For providers, that means taking a look in the mirror and determining what arrangement is right for you today, and what will be right over time.  Another word or warning, because your population often sets your benchmarks for unnecessary spend (think prevalence and socio-demographics) this may be a Managed Shared Savings Program, or an Accountable Care Organization, a Bundled Payments Program, or a Virtual ACO or full capitation arrangement with a payer partner (one size does not fit all).
Using public data has proved extraordinarily helpful in breaking through traditional log jams where payers and providers often mutually distrust each other’s data.  No data is perfect, but this data is public, and the source from which CMS is often already compensating both parties.  This allows for a mutually beneficial dynamic where payers can target the best providers to build strong partnerships and help them grow, creating a virtuous cycle by driving the most interactions in the system to the best performers who also happen to shrink unnecessary spend in the ecosystem.
RowdMap has grown from a husband, wife and friend in a backyard barn (we’re based in Kentucky after all) to twenty five team members in two offices, covering every major line of government programs including Medicare, Exchanges, and Medicaid, covering every major market in the county, all without using an accelerator or taking venture capital.  This is not because we are smart, or know what we are doing, or are even all that lucky.  This is simply the power of public data.  RowdMap uses public data to create incredibly rich value propositions and take them to the market where public data delivers massive value and solves real world problems.
The resources we have used have not only been extraordinarily helpful, but keys to our success.  These include the HHS IDEA Lab and the Health Data Consortium, two entities that every business in health care interested in surviving if not thriving in the Pay for Value world should consider actively supporting.  Obviously the other key parties have been CMS and HHS.  When people think of innovation, they tend to envision cool apps and nifty widgets.  But the most meaningful innovation, in terms of scale, impact and potential for social and public good, is coming from the leadership at HHS and in CMS, folks largely unsung and markedly underappreciated.  Their liberation of the data, and just as importantly the creation of incentives for using it, has been nothing short of truly revolutionary.
As the public data revolution reaches maturity, it is in fact delivering on use cases and value propositions.  RowdMap has made a wildly successful business by using public data to deliver the following: identifying the groups, individuals physicians and networks most Risk-Ready and best suited to Pay for Value arrangements; matching providers to the right government programs and risk arrangements; matching payers and provider together to partner for successful Pay for Value and risk contracts; network design and optimization; designing curated or narrow networks; value chain and performance-driven referral designs and leakage mitigation; regulatory adequacy and network performance optimization; market selection for entrance and expansion into Medicare, Exchange and Medicaid programs; population-based risk assessment and cost projections that outperform claims-based models; health plan product design and network-informed benefit configuration; etc.  All this is done with public data, and, as such, is preloaded and avoids Information Technology integration, is available the next day, and mitigates the ever-present privacy and traditional Personal Health Information risks.
When Ernst and Young named RowdMap, Inc. the Ernst and Young Entrepreneur Of The Year(R), they audited the books and did the due diligence around all of these value propositions.  Winning the award has much less to do with us, but reflects an iconic third party recognizing the power of public data and its demonstrated ability to create value in the current market, drive a virtuous cycle of success in the emerging Pay for Value market for both payers and providers, and enable arguably the most meaningful social and public good in our lifetimes.