Washington Health Alliance to Release Groundbreaking Total Cost of Health Care Report
Unprecedented detailed results for counties and regions across Washington state
SEATTLE, WA — Where are our health care dollars going?
That answer is provided in the Washington Health Alliance’s new Total Cost of Care report looking at how much is being spent on health care in Washington state as well as on the different types of care. The report provides unprecedented detail on how much money is spent on a county-by-county level and in independent regional organizations, called Accountable Communities of Health (ACHs), that work on local health care and social needs-related projects.
The report can help Washington state as it tames the twin problems of unmanageable and unaffordable health care spending.
“One of the biggest issues with the U.S. health care system is the lack of transparency around costs,” said Jay Fathi, M.D., President of Molina Healthcare of Washington and an Alliance board member. “With this report, the Alliance examines what actually drives spending in health care. This helps us further our goal of addressing inefficiencies to best handle the cost of health care in Washington.”
The Alliance used medical claims and enrollment data from its voluntary All-Payer Claims Database to create the report on approximately 4 million people with Medicaid and commercial insurance. By looking back on three years of data, the report makes it possible for policy makers, health plans, care providers and health care purchasers–employers, unions, and others–to take needed action.
Based on the patient’s county of residence, the Total Cost of Care report categorizes the claims from multiple payers into five major categories:
- Facility Inpatient—surgery, maternity, skilled nursing facility (SNF) and other care that includes an overnight hospital stay.
- Facility Outpatient—services provided on an outpatient basis such as day surgery, radiology, cardiovascular, emergency medicine, and pharmacy.
- Professional—a wide range of treatments including physical therapy, occupational therapy, radiology, emergency medicine, preventive care, specialty drug treatments, and urgent care.
- Prescription Drugs—medicines dispensed at retail pharmacies.
- Ancillary—includes ambulance; home health care; and specific supplies such as durable medical equipment, glasses and contacts, and prosthetics.
Data reported by the Alliance identifies differences in the relative health of populations and the differences in the costs of care in Washington state. “Everybody has been looking for this information for a long time–this is important and relevant information. The Alliance is leading the effort across the state,” said Dr. Hugh Straley, Chair of the Bree Collaborative, the Governor’s appointed health improvement organization for Washington state.
Using data from multiple payers and self-funded purchasers and risk-adjusting the results using age, gender, service utilization and diagnoses, the Alliance set the state average as the benchmark and analyzed spending on a per member per month (PMPM) basis.
Dr. Edwin Carmack, Medical Director of Quality at Confluence Health, said, “I’ve been trying to dig into this kind of information for years. The struggle is, I only have pieces of data, but I don’t have data across the different payers. This report is important because it provides that information and enables a comparison of counties and ACHs with the state average.”
Merissa Clyde, Chief Operating Officer of SEIU 775 Benefits Group, said her multi-employer union trust provides $400 million in annual benefits for 50,000 caregivers in Washington and Montana.
“We focus on providing high quality, high value health care benefits uniquely tailored for caregivers. One key element of our strategy is to understand our health care spending,” she said. “This report gives us a place to start. With this and future Alliance reporting, we’ll know if we’re getting closer to the elusive triple aim of reducing costs and improving patient experience and population health.”
Members of the Alliance’s Board of Directors, Health Economics Committee, and Quality Improvement Committee were actively involved in the creation and development of the Total Cost of Care report, an effort that began several years ago, according to Executive Director of the Alliance Nancy Giunto.
Giunto says there are plans already in place for the Alliance’s next report to break down results by individual medical group and clinic.
Date: February 14, 2022
Contact: Leslie Bennett
About the Washington Health Alliance
The Washington Health Alliance (Alliance) is a 501(c)(3) nonprofit, nonpartisan organization working collaboratively to transform Washington state’s health care system for the better. The Alliance brings together more than 185 committed member organizations to improve health and health care by offering a forum for critical conversation and aligned efforts by health plans, employers, union trusts, hospitals and hospital systems, health care professionals, start-up companies, consultants, consumers, and other health care partners. The Alliance believes strongly in transparency and offers trusted and credible reporting of progress on health care quality, value, pricing, and overall spending. The Alliance publishes its reports at WACommunityCheckup.org and provides guidance for consumers at OwnYourHealthWA.org so that individuals can make informed health care decisions.