http://www.healthcostinstitute.org About David Newman, Ph.D., J.D. Prior to joining HCCI, Dr. Newman was a specialist in healthcare financing at the Congressional Research Service, and previously served as a consultant to the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, the Food and Drug Administration, the U.S. Army and Navy, the Substance Abuse and Mental Health Services Administration, the Health Resources and Services Administration, and the U.S. Agency for International Development. Dr. Newman possesses a Ph.D. in Political Science from the University of Rochester and a J.D. from the University of New Hampshire Law School. He has held academic appointments at Georgetown University, the National University of Singapore and Lingnan University in Hong Kong. About Health Care Cost Institute The Health Care Cost Institute (HCCI) is an independent, non-profit organization with a public-interest mission. Launched in 2011, HCCI is now a leader in research and reporting on healthcare expenditures and utilization. HCCI holds data for over 50 million covered lives from the privately insured population and Medicare Advantage, resulting in one of the most comprehensive claims datasets in the country. In addition, HCCI is the first national Qualified Entity (QE) entitled to hold Medicare data for the 50 million individuals covered by the program. For more information, visit www.healthcostinstitute.org or follow us on Twitter @healthcostinst. Medical Travel Today (MTT): What led to the establishment of the Health Care Cost Institute (HCCI)? David Newman (DN): In 2011, Aetna, Humana, United and Kaiser Permanente formed the organization. Upon launch, HCCI was immediately turned over to an independent board comprised principally of academic economists at major universities – the provost at Harvard University, the present administrator of Brigham and Women’s Faulkner Hospital and independent actuaries. The institute was created to do public reporting on cost and utilization trends among the commercially insured. Historically, most of what people originally knew about healthcare in this country came from Medicare data, which was not reflective of the country’s overall population. MTT: What is the focus of HCCI? DN: Initially, our mission was to report on national cost and utilization trends and to license the data to academic researchers for non-proprietary, non-commercial research. In January of 2012, we began to pull the claims data from the insurers. We currently hold 13 billion claim lines representing more than 25 percent of the commercially insured population in the U.S. Building a cross-payer data set of that size is an immense task. This data set contains the allowed amount of co-pays, deductibles and co-insurance on each of those paid claims. As a result, we know how much everyone actually gets paid. We began reporting on trends in May of 2012, and since then, our reports have become the definitive source of information on the commercially insured population. Next, we set out on a mission to support academic group research, and so, we created the Academic Research Partnership Program, which includes Dartmouth, University of Pennsylvania, University of Michigan, Minnesota, Northwestern and MD Andersen. Also, we have the Congressional Budget Office, Medicare Payment Advisory Commission, and two actuarial societies licensing our data to uncover the cost drivers with respect to healthcare trends in the U.S. Finally, in May of 2014, we announced our price transparency initiative, and were recently able to launch Guroo.com. We’ve added Assurant Health as another data contributor to the initiative, and have become the first nationally qualified entity in the U.S., which gives us rights to all of the Medicare data. By the end of 2015 we hope to hold data on more than 100 million people. MTT: How does the consumer benefit from Guroo.com? DN: Guroo.com provides the average price paid in a specific market for healthcare services. Later in the year, we’ll be launching another website that will ultimately integrate the two. If a consumer’s insurance company participates in this initiative, individuals will receive a password that uses their identification to allow them to register. In the future, we are hoping to add quality-related information to the site. This issue in and of itself will not solve the “quality conundrum.” Until we have a good set of quality measures that are calculable by claims data, or we are able to bring in other data, quality will always be problematic. We will be able to point out quality measures calculable by claims data, and we’ll be bringing in new information going forward. MTT: How do you differ from competitors in the marketplace? DN: At this point, there are no other competitors in the marketplace that possess the tremendous data set. You must possess a massively large data set in order to tell a consumer what their out-of-pocket expense will be in a specific location, given their diagnosis and what procedure they are seeking. Guroo.com is based on more than three billion claim lines over the last two years – nobody has that data! Most competitors are selling services, and our websites will be free. This is a broad-based consumer initiative that’s cross-industry. We are trying to make it the commercial equivalent of www.medicare.gov – a place for all of the commercially insured. For example, if an employer changes its employees’ insurance, the employees can still access the same website – they won’t need to learn a new URL. If an employer has multiple insurers, they don’t have to promote multiple websites. It is one place for everyone to get the information that they need. Ultimately, it will build out one of the best consumer experiences, beyond price and quality, to make it easier for consumers to use this information. It is important to note that this is an independent, not-for-profit organization – we have no vested interest in the results. MTT: Do you think consumers have a good understanding of transparency? DN: No, I don’t think consumers have a handle on what it means, but transparency alone is not a silver bullet. When you think about transparency, you must focus on services that are “shoppable,” discretionary or schedulable. For example, if I’m having a heart attack, I’m not going to pull out my iPhone in the ambulance and ask the driver to pass by two local hospitals because the price is cheaper in a distant location. In many communities, especially when there are multiple hospitals in the same town, one facility might specialize in cardiology, and the other in orthopedics. My advice to individuals who are very ill is to get set up with a system that will provide high-quality care at an affordable cost. Consumers will continue to purchase based on convenience and physician referrals – as well as recommendations from friends, family and existing relationships. But, at the end of the day, price transparency is necessary for a properly functioning market. Consumers in high deductible health plans and millennials will most likely adopt these tools earlier – and faster. Transparency is a major new initiative, and employers, insurers and others may begin to change plan designs and respond to the information that is now available. MTT: Is it valuable for patients to travel to facilities where the best price represents the highest quality? DN: Well, of course, we want consumers to presume there is value in the healthcare system. Value is equating price and quality, and of course, there will always be uncertainty when it comes to outcomes – no question about it. From an economic standpoint, we assume that two decision-makers with identical information can make different decisions – neither one being irrational. What is really important is establishing full understanding between consumers, patients and providers. Patients have to be comfortable communicating price and quality concerns to their providers. Conversely, providers must be responsive to consumers and respond in a manner that doesn’t close down conversation.