What's the Difference Between Claims Data and Price Transparency Data?

March 22, 2024

Authored by Mark Stamper, VP of Commercial Products

Healthcare is overflowing with data, from electronic health records and lab results to insurance claims and patient surveys. And if you know how to use it right, the data can do some heavy lifting and lead to things like better care, better decisions, lower costs, and even new discoveries.

However, a crucial first step is understanding the differences between various types of data. Because questions on the distinction between these sets come to us a lot, and because we love talking about all things price transparency, we’re starting with claims data and price transparency data.

What is Claims Data?

Claims data is essentially the financial record of healthcare services provided to a patient. It's generated when healthcare providers submit claims to payors (such as insurance companies) for reimbursement.

This data is a rich source of information, including patient health/injury conditions, the type of services provided, the provider details, the cost billed to the insurer, and the payment processed.

The Good and Not So Good of Claims Data

Claims data is a crucial tool for healthcare analysis, offering a comprehensive view of patient interactions across various healthcare settings. It's widely used to track healthcare utilization, analyze patient health trends, assess the effectiveness of different treatments, and measure provider quality. Its standardized nature allows for consistent analysis and comparison across providers and payors, making it invaluable for policy making and healthcare planning.

However, claims data is not perfect. One of its main drawbacks is the time lag in availability (the time it takes to receive the claim from the provider, process it either automatically or manually, and finalize the claim for payment), which hinders its use for immediate decision-making or rapid response to emerging health crises. Sometimes this process can take well over 180 days.

Additionally, while it excels in capturing financial and procedural details, it often lacks the depth of clinical information needed for nuanced medical research or personalized patient care strategies.

What is Price Transparency Data?

Price transparency data, on the other hand, emerged from the federally-mandated requirement for hospitals and payors to publish machine-readable files (MRFs) detailing the prices for healthcare services.

This data encompasses the negotiated rates between hospitals and insurers, as well as the standard charges for almost every shoppable healthcare service.

The Good and Not So Good of Price Transparency Data

Price transparency data has come forward as a significant healthcare resource, aiming to shift the balance of power towards consumers and promote more rational pricing structures.

When incorporated into a helpful web-based tool, it allows patients to compare costs across different providers, encouraging a more competitive marketplace that can lead to lower healthcare expenses. Additionally, by making the costs of services public, it puts a spotlight on pricing, urging providers to justify or even reduce their charges. This level of transparency also aids in financial planning, as both patients and insurers gain a clearer picture of potential healthcare expenses.

However, the benefits of price transparency are not without their own set of challenges. The sheer volume of data, combined with the way prices are often inconsistently reported, can make it difficult to make sense of the information and can lead to misidentified prices.

When to Use Which

Understanding when to use each type of data is crucial in decision-making. A good rule-of-thumb is that you should use claims data for a comprehensive look at past healthcare services and outcomes, which is ideal for analyzing trends and making policy decisions.  This look-back could be at individual members, large groups of members (to see emerging utilization trends), and providers (measuring efficacy and quality).

Price transparency data, on the other hand, helps patients, insurers, or other healthcare organizations compare current costs across providers, aiding in immediate financial planning and cost-effective care choices. Beyond that, it also enables a broad spectrum of applications, from real-time market research and strategic negotiation positioning to guiding market expansion and setting prices for new services.

How to Use Them Together

While claims data and price transparency data each have their unique strengths and weaknesses, together they can offer a more rounded perspective.

  • Enhanced Decision Making: Combining the detailed healthcare utilization patterns from claims data with the pricing information from price transparency files can help consumers and payors make more informed choices and potentially modify benefit plan designs to ensure that members have access to the care they need to stay well and healthy.
  • Improved Healthcare Planning: Healthcare providers can use the combined data to better understand market dynamics, optimize service pricing, and tailor their offerings to meet patient needs.
  • Increased Cost Efficiency: The synergy between these data types can drive more competitive pricing, reduce unnecessary healthcare spending, and ultimately contribute to a more sustainable healthcare system.

Unlocking Smarter Healthcare Decisions

Gone are the days when claims data stood alone as our guide through healthcare costs. Now, price transparency data has entered the scene, adding clarity and immediate insight.

Both packs of data offer unique benefits and, when used wisely, can lead to smarter, cost-effective healthcare choices and improved outcomes. The key now is in understanding how to wield each type—and when to combine their powers.

Mark Stamper is the Vice President of Commercial Products at Opyn Market®. Having spent 20+ years in the healthcare industry, he is passionate about empowering consumers to take charge and feel good about their healthcare decisions, for the first time.

You can reach him at mstamper@myopyn.com.

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