Cuomo Bully Pulpit: All Payers Database to be a reality

18 Feb Cuomo Bully Pulpit: All Payers Database to be a reality

Bully pulpit (bʊl’ē pʊl’pĭt) n.

1. Public Office of sufficiently high rank that provides the holder with an opportunity to speak out and be listened to on any matter.
2. An effective mechanism to bring issues to the fore that were not initially in debate, due to the office’s stature and publicity.

I never knew that Andrew Cuomo had such a swing. One by one he is knocking ’em down in NY – United, Cigna, Aetna, and now Wellpoint have succumbed to Gotham’s keeper of the peace (and highly effective health care reformer). Several more payers are in his sites and given the domino effect it is only a matter of time before we hear the announcements regarding other health plans abandoning their current pricing opacity strategies.

And the price of that strategy just keeps on rising. To date the figures are impressive, and by the time the other states pile on, my prediction that we are going to top $1B will be validated. Here is where we stand:

• United – $350M settlement with State of New York
• HealthNet – $255M settlement with State of New Jersey
• Aetna – $20M to participate in new organization to set UNC
• Cigna – $10M to UNC organization
• Wellpoint – $10M to UNC organization
• MVP Health – $535K to UNC organization
• Health Now – ?
• Independent Health – ?
• TOTAL: $645M and counting

The question remains for me who is going to administer this new database and more importantly who is going to have access to it. This could be the beginnings of a true national all payers database (we already have the other ~50% through federal Medicare numbers) that should become a public good. Once this information is made public then health plans will, by extension, have revealed their pricing information which would in effect eliminate their Provider Network pricing advantages. In fact, I would argue as I have before, that one of the greatest outcomes of price transparency is the elimination of the current provider networks solely based on price. This results in a race to the bottom in terms of who can negotiate the best rates with the most desperate providers.

Cuomo’s well timed swing for the fences actually turns that former paradigm on its head. No longer can insurers self-determine what is reasonable and customary, but they will have an objective, all-payer, non-conflicted database that will reveal what is reasonable and customary. Physicians should have access to this for negotiation purposes, consumers should have access to this for comparative purposes, and insurers will have access for competitive purposes. The surfacing of this information means that everyone has to move up the value chain – physicians have to deliver outcomes that relate to prices, consumers can become true consumers through comparative value shopping, and providers are going to have to compete on delivering value instead of network gimmicks. Competing on value (outcome/price) is what all health markets are designed to foster. This should bode well for all.

Particularly for the one man reform machine working the NY AD Bully Pulpit.