Medicare Data Could Cut Health Care Costs

Economists say one reason the health care system wastes so much money is a simple lack of information. It's nearly impossible to know which physicians are doing an efficient job, or which ones are ordering too many tests or the wrong tests. What's needed, economists say, is a huge database of information.

It turns out, that database exists, but no one is allowed to use it to evaluate doctors. The fight over what can and can't be done with this data stretches back many years.

Arnold Milstein, who advises the White House on health care economics, has been at the center of the debate. He says he noticed a lot of unnecessary spending in his early days as a physician — much of it stemming from one unlikely tool.

"It's often said that the single most powerful influence in quality and spending is the physician's pen," he says. "Over time, I began to realize the wisdom of that insight."

Milstein diagnosed the problem as one of relative ignorance: Physicians don't have a clue how they compare with their colleagues. They don't know if they're spending more than another doctor to treat the same condition. There just wasn't any place for them to see comparative statistics.

Then Milstein had an idea: tapping Medicare data. Every time someone covered by Medicare goes to the doctor or gets a test done or buys some medication, the government gets a record, because the government pays the bill.

"Sitting there like a diamond on the desert floor was the Medicare database, essentially the nation's biggest source of information on whether or not doctors are or are not adhering to what are called scientific clinical guidelines," he says. "It's the only source of information on the total amount of health insurance fuel that they burn on solving a given clinical problem."

Milstein figures the data could be used by patients to find good doctors, by insurance companies who might want to reward doctors who practice efficiently, and by doctors themselves, who want to know how they compare.

Today the Medicare database is widely used by researchers for all kinds of studies — but not to publish information about individual doctors. That's not allowed. "I want the fact that this got across the goal line, on my tombstone," Milstein says.

A Visit To The Database

It's easy to see why physicians might not like the idea of getting graded. Their life-and-death work is inherently hard to quantify.

Visit the database itself, and you start to see the enormous scale of what's at stake. Medicare officials agreed to give an NPR reporter a tour of it, in Baltimore, under strict security. Half a dozen staff tagged along.

"I have to ask everyone to travel as a group," said Bob Vaccaro, director of the database center, as we lined up.

The data center looks kind of like a library. Instead of books, the shelves contain rows and rows of computer data cassettes. On those tapes is medical information about millions and millions of people, from past presidents and aging rock stars to ordinary Americans. Some of the 500,000 cassettes sit on circular bookshelves. A robot orbits the shelves and plucks the cassettes as research demands.

Vaccaro says there are petabytes of data here (a petabyte is a 1 with 15 zeros after it). Every day, Medicare gets bills for over $1 billion in care.

But analyzing the information about people on these tapes can be a tricky business. That's one reason physicians are wary about anyone using the data in this room to evaluate them.

A Question Of Privacy — For Doctors

The American Medical Association recently fought a lawsuit from the group Consumers' Checkbook, which tried to get some of the data for individual physicians released.

Psychiatrist Jeremy Lazarus, who serves on the AMA's board of trustees, says he's not convinced the data would be useful. Consider the example of a doctor working as part of a team, he says. How would you know whose performance the data reflected?

Privacy also becomes an issue. Medicare officials are careful not to release data on individual patients. Lazarus says the same rule should apply to physicians. If people learned how many procedures a doctor filed for through Medicare, they could figure out something about how much money the doctor makes. "And that is personal information," Lazarus says.

That argument holds no sway with Joseph Califano, the secretary of health, education and welfare under President Jimmy Carter. Califano says the Medicare database is paid for by the taxpayers.

"There is no free federal lunch, OK?" he says. "When you get federal dollars, there is a price."

When he was in office, Califano wanted to release the data on individual physicians. He ran into resistance from Congress and eventually gave up. "Every member of Congress has their favorite doctor, their favorite hospital in their district," he says. "And those guys come to them and say, 'You can't let this happen!' "

Today the battle has finally landed in court. Consumers' Checkbook asked the courts in 2006 to release information about individual physicians under the Freedom of Information Act. The government argued against handing over the data, and the AMA eventually joined in.

In 2007, a judge ruled in favor of releasing the data. Early this year, a panel of judges overturned that decision. Consumers' Checkbook is now weighing whether to appeal the case, this time to the U.S. Supreme Court.