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CMS’s New Release of Hospital Outpatient Charge Data: Now This Looks Like a Strategy

June 3, 2013
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The CMS release of hospital outpatient charge data adds further evidence about the feds’ evolving transparency strategy

As HCI Associate Editor Gabriel Perna reported earlier today, Health and Human Services (HHS) Secretary Kathleen Sebelius made an important announcement at Health Datapalooza IV, an annual gathering being held in Washington, D.C. this week.

Secretary Sebelius announced today (June 3) that the Centers for Medicare & Medicaid Services (CMS) has released new data on hospital outpatient charges and on Medicare spending and utilization. At the same time, the Office of the National Coordinator for Health IT (ONC) released additional information on the adoption of specific electronic health record (EHR) systems being used across the U.S., highlighting data from regional extension centers on the EHR products being used by 146,000 physicians nationwide.

The announcement about the release of hospital outpatient charges and Medicare spending and utilization comes just weeks after CMS’s first public release of hospital charge data. Last month, as Gabe Perna points out in his report, it was average charges for the 100 most common inpatient procedures; this time, it’s estimates for 30 types of hospital outpatient procedures, including clinic visits, echocardiograms, and endoscopies.

As I wrote when CMS released hospital inpatient charge data a few weeks ago, “[I]n an era of accelerating transparency… there are no secrets.” And at this point, I would double down on that statement. Indeed, while it is true that the release of charge data, whether inpatient or outpatient, will give the public a somewhat distorted understanding of hospital costs, since hospitals do not actually receive from the Medicare program what they charge—nevertheless, charge data does point up some of the distortions in our healthcare system; and the very release of such data puts additional pressure on providers—hospitals and physicians alike—to justify what they charge and/or are paid for their services.

As I also wrote last month, “Healthcare provider executives face an increasing set of challenges when it comes to pricing and reimbursement issues these days, because as purchasers and payers become more militant about the healthcare cost curve, and as consumers begin to become more aware of costs and prices in healthcare… what a hospital charges for a procedure—even if it doesn’t actually get paid that amount—is inevitably going to come under greater scrutiny.”

And now, it seems clear, with this second broad data release, HHS/CMS officials are being quite deliberate in what they’re doing, at the same time as several healthcare reform-driven programs are moving ahead full-steam, including the value-based purchasing and avoidable readmissions reduction programs, on the mandatory side, and the accountable care organization and bundled payments shared savings programs, on the voluntary side. In other words, this is part of a larger strategy.

So today’s announcement at Health Datapalooza IV is clearly no accident. And for those healthcare, especially hospital, leaders who fail to connect the dots here, do so at their peril. At a time of accelerating moves towards transparency, senior leaders in hospitals and health systems need to marshal all the forces and resources at their disposal, in order to leverage data for continuous performance improvement, while at the same time, turbo-charging that continuous performance improvement to be able to express pride in improved data, with regard to clinical outcomes and value.

Charge data releases will continue to be dogged by underlying problems with meaning and usefulness; but the train on data availability has clearly left the station here, and there is no longer any reason for senior healthcare leaders to dawdle any longer when it comes to preparing to operate in an increasingly transparent operating environment.

Meanwhile, please stay tuned, as Gabe Perna and our Senior Contributing Editor David Raths post reports from Health Datapalooza IV this week.