Washington Health Alliance Breaks Down Evergreen State Spending

Feb. 14, 2022
Total Cost of Care report provides detail on how much money is spent on a county-by-county level and in Accountable Communities of Health

A new report provides granular detail on how much is being spent on healthcare in Washington state overall as well as on different types of care. The report provides 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 healthcare and social needs-related projects.

The Total Cost of Care report, from the nonprofit Washington Health Alliance, can help Washington state as it addresses the problems of unmanageable and unaffordable healthcare spending. The Alliance, which has 185 member organizations, 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 purchaser — employers, unions, and others — to take needed action.

"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, in a statement. "With this report, the Alliance examines what actually drives spending in healthcare. This helps us further our goal of addressing inefficiencies to best handle the cost of healthcare in Washington."

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 healthcare; 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.

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.

"I've been trying to dig into this kind of information for years,” said Edwin Carmack, M.D., Medical Director of Quality at Confluence Health, in a statement. “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."

Members of the Alliance's Board of Directors, Health Economics Committee, and Quality Improvement Committee were 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, who says there are plans already in place for the Alliance's next report to break down results by individual medical group and clinic.

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