Ah, data. We love the old ball and chain and are happy to be the ones to educate the masses allll about it. Today’s topic: the difference between claims data and price transparency data. Come on, sit down. Let’s chat.
What is Claims Data?
Claims data is a combination of a few things, but for the purpose of today’s lesson, it contains patient demographic information alongside code-specific information related to episodes of care. Specifically, it contains what is referred to as 835 and 837 data, aka, what was sent to the payer for reimbursement and what the payer sent back with billing codes attached.
Before price transparency data, claims data was a common method of gauging the cost of healthcare. Now that we’re in price transparency-topia, it’s still a viable option, but may not paint the full picture when used exclusively.
The benefits and possible shortcomings of claims data
Like that “screentime” notification on your phone, claims data is very useful in assessing utilization. Unlike those pesky push notifications, it won’t make you feel bad.
Since claims data contains patient health information (PHI), it is appropriately de-identified.
This is good because it protects patient information but may be unhelpful due to the limitations around data granularity and those PHI concerns.
Claims data also presents a difficulty in matching reimbursement information to cost information. Some claim data shows charges and costs, but not usually reimbursement. Or it will give you reimbursement at the percentile level rather than the specific reimbursement rate.
On the other hand, claims data is helpful to decide whether you want a view of the current state or the past. With claims data, you’ll get a sense of what has happened in the months or years prior to receiving the data. But the reimbursement rates could have changed within that time period.
Lastly, claims data is typically inexpensive if you only want to purchase a small portion. So if you’re a small (yet mighty!) organization wanting to use historical claims to see where you stand in the market, this could be a good place to start.
What is price transparency data?
Price transparency data is collected from federally-mandated hospital and payer machine-readable files. A whole lotta laws dictate what information must be made available and which entities must disclose their rates, making price transparency data an unprecedented resource in healthcare. We love her.
The benefits and possible shortcomings of price transparency data
Price transparency data has perpetual applications (and we’re not just saying that because it’s what we live and breathe). You can use this data for market research, negotiation positioning, market expansion, pricing new items and services, surfacing it alongside other data, and more. It is detailed down to the payer and provider level, making it multi-use as you can imagine.
Prior to 2021, we did not have access to this level of granularity when it came to healthcare-negotiated rates, gross charges, and list prices (aka the data hospitals and payers are mandated to disclose). The data is as close to real-time as we could ask for: payers are required to update their files monthly, and hospitals are required to update their files annually. With that in mind, we only have access to exactly what hospitals and payers post. At Turquoise, we work hard to clean and enrich this data. As time goes on, we are seeing published files getting better and cleaner!
Okay, so I don’t need Claims data then, right?
You still might! In some ways, claims data and price transparency data are a match made in data heaven. Since claims data is useful in assessing utilization, coupling it with pricing information is a no-brainer. This allows any organization, big or small, to look at what services they provide the most (or least) often alongside how much they are reimbursed for them.
You can imagine this being used in the following context: say you’re going into negotiations with a payer and they offer you a below-market rate for a particular service and an above-market rate for another. You can look at claims data to figure out how often you would be paid for either service. If the service that got the low offer isn’t performed often, but the service with the favorable reimbursement is done weekly, then you’d know it doesn’t really matter that the other rate is below the market. You’re getting a great rate for the services you provide the most!
You can recreate this exercise for yourself by uploading your own utilization data into our visual analytics reports.
So, claims data is a useful complement to price transparency data; however, price transparency data is a significant upgrade when assessing negotiated rates.
So which is better?
Claims and price transparency data aren’t the same thing and it’s overly simplistic to say one is better than the other. It depends on what you’re trying to do!
If you want to know generally what percent you’ve been reimbursed in relation to other hospitals, go for claims data. This should give you a directionally correct awareness. Just make sure to check with your vendor to figure out when they update their data sources.
If you want to explore reimbursement at the payer and provider-specific level, price transparency data is for you. With this kind of data, you get a view of the negotiated rates (along with cash, gross, and list price of items) from both payer and hospital machine-readable files (MRFs). With Turquoise price transparency data, you can get down to the code and provider level, benchmark rates, pull them into visualizations, rule the world….you know, a lot.
If you want to use data to inform pricing and negotiations, access to price transparency data (a fully public macro to micro view of price) and claims data (volume) will be the best use of your time and budget. So, there you have it.
More questions about claims data and price transparency data? Send us a message!