EMPLOYER GROUPS AND RESEARCHERS support data collection: read their testimony


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EMPLOYER GROUP: Carolyn Pare, CEO, Buyers Health Care Action Group
RESEARCHER: David Knutson, Park Nicollet Research Center
RESEARCHER: Steve Parente, Ph.D., University of Minnesota, Department of Health Care Management
CITIZEN GROUP: Twila Brase, President, Citizens' Council on Health Care
RESEARCHER: Roger Banks, Council on Black Minnesotans
AMENDMENT ATTEMPT: Representative Fran Bradley (R-Rochester)


Partial Transcript
Minnesota House Health and Human Services Policy Committee
February 10, 2003
Chair: Representative Lynda Boudreau (R-Faribault)
House File 297 (Author: Rep. Bill Haas (R-Champlin))

(Note: The primary purpose of providing this transcript is to publish the rationale given by employer groups and researchers in support of state collection of private medical data. In addition, the transcript offers a sample of the legislative debate on the Haas bill which would repeal the law that authorizes the data collection (sections of M.S. 62J). In an attempt to limit the length of this transcript, not all comments are included or complete. Where the complete statement of the individual is not included there are noted spaces ( […] or …..). A tape of the hearing can be obtained by calling 651-296-0767)

BOUDREAU: [called the meeting to order and gave introduction of agenda]

HAAS: Madam Chair, this bill has sparked a lot of discussion in the ability of the state to collect data and what they would do with this data. And I think at this point, I'd turn it over to Ms. Lafever to go through the sections so that we all have an understanding of each section, of what we're taking out of law, at this point.

LAFEVER: [as legislative analyst, she provides section by section description given (not included in this transcript)]

BOUDREAU: Ms. Lafever, if I could ask you a question. There seems to be a reference in the bill. There is a section on definitions, but as far as unaggregated form of data and aggregated data, could you explain? Or is there some definition somewhere that we refer to explain what that means?

LAFEVER: I'm not aware of a definition within the statute of unaggregated versus aggregated.

BOUDREAU: Perhaps we can have you check on that.

HAAS: As we discussed last week, this bill was brought forward for a number of reasons. One first of all is the privacy of patients and their medical records which is a. I feel very strongly that this is information to be shared only between a patient and a doctor, and I think it could have adverse consequences as far as people not disclosing their true medical needs. When they know that the state is going to be getting a copy of every time they go to the doctor and visit a doctor. Every time they pick up a prescription, it's going to be logged into the state, as far as what medication you're going to take.

And I do understand members, that this is encrypted data but I have real concerns about encryption because when you look at the minds that are out there, that can create the failsafes for these systems, there's also the equally talented minds out there that can get into the systems and unencrypt. Or if somebody makes a mistake and doesn't encrypt properly or forgets to, all of a sudden we got data out there.

You look at the situation we had with our computers we were selling. The hard drives that weren't even erased. And all kinds of data was on there. We can't afford to have those mistakes made with personal medical records. Members, we don't know the true cost of this. What it's going to really cost the department to really collect this data and go one step beyond that. They have no plan as far as what they're going to do with this data. So they're going to collect a lot of data, spend a lot of money and for what? There is no definite purpose. The other thing to consider is the ramifications to the private sector. What is this going to do to the cost of health care? I've talked to a couple of the HMOs and they figure it's going to be between $2 to $3 million a year to provide this data. And we're all concerned about the rising cost of health care insurance in the state of Minnesota and yet we're driving that cost up. You got doctors, you've got pharmacies that are all going to be. And hospitals, that are going to be providing data on every time we go in there for a visit. Every time they bill. And that data's going to the state. That is going to drive up their costs.

I know the nurses association is very concerned and so are the doctors. That they're going to spend more and more of their time doing paperwork and less time doing patient care. And we cannot afford that for you and I as users of those services - to have less time with our doctors and our nurses. We need time to understand the medical conditions that we're being treated for.

So members, there's. We really have to step back and say what is the role of government? Now we're not restricting clinical trials. It doesn't restrict the University of Minnesota from going out and doing their clinical trials or doing research. Because that's all done with consent of the people that they're working with. And some of this state the state's collecting is with consent but most of it is without. We just have no choice and I think that offends a lot of people when they don't have a choice, but for anybody who wants to do research, we're not stopping them because the people that they're selecting for their research projects are willing to give up the information. They're volunteering the information. That we don't have a problem with.

What I have a problem with, and a lot of people I talk to, have a problem with is the fact that the state is collecting data that we just don't know what they're going to use it for. And so members that is why this ill is brought before you today so that we can eliminate a bad rule and some laws. And that's what we're here to do - get rid of some laws. Take some laws off the books. And if we really need to revisit this in the future then we need to have a healthy discussion within this legislature on what is our role in collecting data and what is the real purpose of collecting this data. And that is a discussion we really haven't had. So members I appreciate your support for this bill and Madam Chair, I know there's some people here to testify today and so we'll stand for questions.

REP. PAYMAR: Rep. Haas, I'm just going through this real quickly because I just received it like we all did today, but a few parts of statute that you want to eliminate. I'm curious if the intent is to ensure that the names of individuals are kept in confidence. 62J.38 cost containment data from group purchases, 62J.381 prescription drug price disclosure, 62J.40 cost containment data from state agencies and other governmental data don't appear to have any names disclosed at all but are in fact looking at data to determine the cost-effectiveness of our health care and how to get our arms around that. And so I'm wondering what your concern is and why you're trying to strike that from statute those three provisions. There may be more. I just was glancing at these and also information from House research.

BOUDREAU: And Representative Paymar. If you'll notice in those sections that you referred to, there is mention of unaggregated form of data as well as any additional data. And I think that's where we need further clarification. Representative Haas, perhaps you could answer that question.

HAAS: This is the ability to collect data and I believe the unaggregated form is the fact that it's not encrypted. So they could be collecting data on state employees putting it in their computers. And yes, they're analyzing cost containment measures. But members, you've got to remember this information is already available through the HMOs and through the health plans. They're doing studies internally on cost containment and how to hold down their costs. Why does the state have to do their own independent studies? If they want to do an aggregate look at what the state looks like in cost containment, all they got to do is call the HMOs and they will supply them with numbers. They don't need the names of everybody. They'll just give them the numbers and then they can compile the numbers and put them together. And then tell us you know whether we're going in the right direction collectively as a state. I don't understand why the state needs to look at all this data and collect it when it's already available with a phone call or an email to the HMOs?

PAYMAR: If the names aren't being used, why do you care that the department wants to analyze this information? Maybe that a question of the department of why they're doing it. If that's your only concern that government shouldn't be doing this. But if the names aren't being used I don't understand your motive.

HAAS: Representative Paymar. It's not a motive. It's a protection of people so that unencrypted information is not circulated on individuals, or if they would come across data. All these statutes are intertwined so if you're going to look at this you got to take care of them all, and get rid of them. We have people in the department. If they want to look at cost containment we don't have to collect this data and build up a whole database as a state. All they have to do is call the health plans and get the data. Get the numbers. That's all they need is numbers. They don't have to collect all the specific data.

And in order to get to those cost containments, they're going to have to have files, because you're not going to get it any other way but looking at a person's medical records, whether it be you know, like our state health plan. How are they going to look at how cost containment if they're not looking at claims for you and I to see where they can contain costs. And that is specific data that has identifiers on it. And if it's coming to them unencrypted, you and I might have our medical records on a hard drive that's setting down some place that might inadvertently get sold because it's out of date but maybe didn't get erased properly? Even though they say they started erasing them properly. Maybe they miss one. Maybe yours and my medical data's out there. Not encrypted. You and I are not going to be very happy campers with that.

BOUDREAU: Members, we will give the department a chance to respond and state their reasons for needing the data. And hopefully all of you did receive some information from the department that was emailed to me today and it should be in your packets. We have some witnesses that would like to testify. If Carolyn Pare is here or someone from the Buyers' Health Care Action Group. Please come forward.

CAROLYN PARE (CEO, Buyers Health Care Action Group) My name is Carolyn pare and I'm the CEO of the Buyers Health Care Action Group. Madam Chair and members of the committee, I want to thank you for the opportunity to discuss the critical relationship between personal privacy and the use of medical data that is collected to improve lives.

As I mentioned before, I'm the CEO of Buyers Health Care Action Group. We're a coalition of employers in both the for-profit and not for profit sectors. We came together in 1988 to reshape our state's health care market and improve quality by encouraging provider accountability and creating more knowledgeable consumers. We represent some of Minnesota's most respected employers including 3M, Cargill, General Mills, Northwest Airlines, Target Corporation, Wells Fargo and the University of Minnesota. Our mission to reshape health care is guided by four core principles.

One, consumer knowledge and self-reliance. We believe empowered consumers produce the best choices and health care outcomes. Two, provider accountability. BCHAG expects and rewards accountability from health care professionals. Three, continuous quality improvement should drive all health care decisions. And four, efficient service delivery. The best health care is delivered at the right time based on the right information and at the right price. These four principles shape the prism through which we view all health initiatives, including the issue before you today.

We share the concerns raised here today regarding how medical data is collected and used in the public interest. We believe the success in using data to improve lives depends on how it is protected and stored. Our members greatest assets are their employees and we don't want to see any harm come to any of these individuals. Severe punishment should come to those who would choose to use data for any purpose other than to develop cures and assist consumers in making smarter health purchasing decisions. Medical data is a critical element in providing efficient and effective health care.

First, the collection and dissemination of health data in a standardized format can be a powerful health improvement catalyst. Without access to information that confirms the doctors who provide the highest quality and the treatments that yield the best outcomes, consumer-driven health care is just a hollow promise. Armed with reliable community wide data however, a person will be able to learn about surgical success rates, intervention outcomes, and infection rates at particular hospitals, just as a few examples.

Some of society's greatest advances in health have occurred through the analysis of medical data. Some of you may remember the wide spread fear associated with polio. Today it's little more than a footnote in medical history. We have contained tuberculosis and we can move quickly to treat new cases. We're able to quickly isolate meningitis outbreaks that frequently occur at college campuses. And physicians are now able to provide better care for a whole host of chronic illnesses, including diabetes, asthma, and heart disease.

Second, the collection and dissemination of health data can be a powerful cost control weapon. Best practices and care guidelines that have been proven to save money and produce better outcomes can only be determined through the analysis of a wide sampling of medical information.

Finally, Minnesota is fortunate to have other examples we can use to develop our medical data policy. Other states, including Wisconsin and California, have implemented state collected medical databases after deliberate review of questions concerning privacy, who stores the data, who has access to the information and how it is used.

We believe Minnesota would be able to do the same. A statewide standardized reporting system provides Minnesota with a great opportunity to prove we're a leader in health care innovation and quality. It will give our innovative medical community the chance to remain competitive with other regions of our nation in securing research grants.

Developing a workable policy on the use of medical data demands a judicious and diligent approach. We urge the Minnesota legislature to put the consumer first: to protect a person's privacy while providing them with the greatest chance to benefit from the care improvement that is gleaned from this information. Without data, we cannot accurately measure and report performance, achieve accountability, or provide consumers with the information they need to make good health care decisions. Thank you.

ABELER: I kind of hear you saying…you're concerned, but like part? You're nervous about part of it but you want us to keep part of it? Is that what you're…

PARE: […] We're opposed to the full repeal of sections as proposed today. While the health department may have gone too far too fast, the recommendations that they've made do deserve some merit and review and we'd look to the legislature perhaps to give the department more direction.

ABELER: [ regarding whether the legislature should retain sections 62J.38, 62J.381, 62J.40, 62J.41, and 62J.42]

PARE: Again, what I would advocate for is a measured approach and a balance between what we're collecting and what we're measuring. Ultimately, I think that we have an opportunity here to build some public trust around how we're gathering the information and how we're giving it back to them.

WILKIN: You talked about the benefits of having a wide universe. Well, how wide is wide? Couldn't we just repeal all this stuff so that we can tell the public, you know, that the state government does not have their medical records, but then we can have the department of health survey the health plans who have a huge universe of people to create a valid sample and go that route? That's kind of what Rep. Haas was talking about. That data's there. As I stated in the last hearing. I have a contract with my health plan to have all my records. I don't have such a contract with the Department of Health and I don't expect them to ever have my records.

PARE: While I agree the HMOs or the health plans do have a great deal of data, I think the focus here is that we would like standardized objectified data that would be delivered directly to the consumers so that the consumer can make choices based on what the providers are actually providing. It would be more a question of what I'm actually buying as opposed to what I'm paying. And I do believe that if you drive the data down to a better or a deeper granularity for the consumer, they'll be able to make decisions about their health care choices, not just their health plan.

WILKIN: I don't disagree with that…but I don't see where the Department of Health needs all the individual records, or even to get the data coming in directly to the department o health . We have that in the plans right now. The department of health can request specific information of the plans and we can protect the confidentiality, give people confidence in the process, and the private data stays with the health plans. I haven't heard anyone yet tell me why we can't do that.

PARE: There are two individuals that will testify today that will be able to make a more compelling case for why data should be more widely gathered and disseminated. My focus here is on giving information to consumers, not so much that the department of health would collect that data, but again so that all the data would be available in a standardized objectified format so that you could compare providers one against another regardless of health plan. You could have someone else of some other objective resource collect that data and maintain that database. It wouldn't need to be the health department but I do firmly want to advocate for one consistent objective standardized database so that we can compare all health information, not only within the state but across the nation.


HUNTLEY: […] They have to have authority to collect the information…If we pass everything in Rep. Haas' bill, they won't have the authority to do anything…


BRADLEY: Ms. Pare, you mentioned something that's sort of an interesting dimension and I know that many health plans and employers are interested. But you were coming at it from a different direction because a lot of what we heard from the health department was more the research that would allow us to better handle common illnesses, chronic conditions, those kind of things. But you mentioned I think from a quality and cost point of view from provider groups. It may theoretically be there but I haven't heard much mentioned about hat. Are you reading something into sort of current statute that I'm not seeing of any kind of commitment to deliver on that?

PARE: I'm not prepared to comment specifically on how the statute speaks to quality improvement, however through the collection of data, comparing that data against some of the treatment guidelines etc. you would be able to determine in fact how quality outcomes are achieved by compliance with those guidelines. And so again, I'm advocating for the collection of data for quality improvement and improved outcomes at the provider level.

BRADLEY: I think that's where I'm not clear because I don't disagree with you, but I don't see the provider level. I see quality on a much broader basis talked about here, and it seems like it's focused more on the individual data as some kind of way of that, but I haven't seen much substance yet in the business of being able to differentiate cost and quality at a individual level.

HAAS: [ comments on report cards] […] We got to be real careful about how we analyze these outcomes cost and quality because we got to look at the Paul Harvey version, the rest of the story. Not just part of it. And that's part of my concern on that.

HUNTLEY: [Two examples: NY and OB/GYN's C-Section rate] […] Not only very expensive medicine, that's very bad medicine…that may or may have not been done by the health plan but this bill, as it's written would prevent the department of health from doing what it's supposed to do, which is improve the health of the people of Minnesota.

BOUDREAU: Rep. Huntley, I guess the question is, should the state be doing it or should we rely on the health plans to do it? Well, I suppose the health plans will still do it, but that's what we're here to discuss. We have another witness.

DAVID KNUTSON: I direct health system studies at the Park Nicollet Research Center. I'm here speaking as an expert in the field and not as a representative of Park Nicollet. I was asked to talk about my experiences and my views about he use of these data for not only improving population health but what I'm going to focus on is my research in the area of consumer-driven health care markets, and my experience as a member of the National advisory Panel on Medicare Education. I was appointed by the administration to a panel whose goal is to help the administration improve the level and quality of data available to Medicare beneficiaries in service of producing more choice in a consumer market.

I come in with the position that without comparable independent data probably held by a third party that crosscuts payers and purchasers, health plans in other parts of the country are losing ground to PPOs. In other words, there are many different forms of health care financing. And if we push further on a consumer market, I assume many here would prefer, in that pluralistic setting, I think consumer protection actually requires that we have independent data not only for the consumers as they choose among providers, but also to understand how the whole system is working.

As many of you know, and you brought it up earlier, unless you understand the risk of individuals as you move from carrier to carrier, from provider to provider, and know that some people have greater needs than others going in, you really can't understand how the health care system's performing over all. You'll never really know what efficiency is. You will never know what quality is. And those kinds of measurement issues are well understood by those who are working hard at the national level to try to improve consumer information.

And I think that the experiences we've had leave me, for one, to believe that as I said earlier without comparable information held by some system that is independent of specific insurance carriers. That we have a problem in consumer protection with all these black holes of information. And secondly, we will never be able to realize that kind of consumer-driven market that at least at the national level this administration is seeking for Medicare.

I have experience as researcher using these data. I have also become convinced that there are many protections that are in place that work quite well and that it is very much possible going forward to link data at an individual level in one entity that is highly regulated with a lot of oversight. And then that data can then be used encrypted for many uses, including research, but particularly to help consumers make informed decisions.

I'll just stop there and maybe you have some questions.

WILKIN: I agree that we need a more consumer-driven system here, but doesn't patient consent fall in there somewhere with consumer-driven?

KNUTSON: I think that the individual consumer in their contracts with plans of all sorts agree in many cases as standard operating procedure to make their data available. To the extent that that could be expanded. To the extent that a Medicare program has that same provision and the Medicaid programs in various states, the data would be available for the appropriate uses. And I think the uses that the data would be available for need to be defined ahead of time so that it isn't 'just collected al' the data and we'll figure out what to do with it later.' And that that could be done with a process that identifies particular purposes for the data and then includes that in most every type of contract that is being used out there by various carriers or by public sector financing.

WILKIN: I go to the clinic and there's this bizarre form you gotta fill out and check boxes now. It's actually at your clinic. It's so unwieldy. It talks about HIPAA and state and federal regs and. Consumers don't know what that means. I don't think there's any way that you can boil this down so people know how their medical records are going to be used. I only want my medical records used in the clinic by my doctor, the nurse, whoever's you know giving care to me. And I think that's the expectation of the public. I just don't see where that needs to be shared out further other than with payers. I guess a question I have for you is, why isn't the sample big enough in say a Blue Cross and some of the other big providers? We have only three really big providers in this state and that's a big universe. Why do you have to be able to track them when someone goes from one to the other? Does that add so much more to the data about making decisions about use of a specific provider? Or can't we figure that out with the aggregate data?

KNUTSON: Although this state has three large payers, that isn't the case in other places. And I know we're talking about this state now. But, I think if you think down the road to the kind of products that are coming online-defined contribution products, variations on every kind of insurance concept we've probably heard of-and we also have to desire to produce more choice, whether it's an insurance carrier or a type of a health care system. As there is more choice, there is also the opportunity, especially in the area of chronic disease, to miss some key outcomes that are further downstream than maybe even the enrollment period within a specific product, especially if those products are changing.

If we want that kind of a dynamic market. If we want consumers to change, a lot of portability, I think it's required that we have the information so that the system as a whole, meaning the public as a whole, can understand when in fact value is being added along the way. And when in fact that can be differentiated from essentially dumping bad risk for example.

I think if someone's in the same plan from cradle to grave, fine. But that's not the case, and I guess for those pushing a consumer-driven market, that's not the preferred future. The preferred future would be a lot of choice, a lot of choosing, a lot o change and without a common data system to help inform all of this, I don't think it would survive.

ABELER: […] I actually share your opinion that you need some way that will cut across that plans, at least to get information because the plans may not always be forthcoming, or you need a way to leverage the data coming in. And I can appreciate from a research point of view you'd rather have every piece of data you can get. And that would be the optimum of everything you ever wanted to know. There's a continuum from everything to nothing and I think we have kind of a nothing position in front of us and we're trying to find a place where in the middle if there's someplace we can get enough to be useful. Maybe you can tell me, how many dollars can your group bear to collect this data? What's the practical place at which the collection costs outweigh the benefit you see currently?

KNUTSON: In this situation, I don't speak in terms of dollars, although I could if I had a specific issue in mind. I think the administrative burden. Once these data are collected for clinical management, the administrative burden of making that available I think is in my view, minimal. The idea of what social good is achieved, I think would be determined based upon something that even a good researcher requires. And that is: what is the question you're trying to address?

You said researchers prefer to have all the data they can get. At one level, but really good researchers start with a question and don't want to collect extraneous data that don't serve that question. That discipline, by finding a few areas that are important to. For example, that would be important to help support a consumer-driven health care market at the provider level, say the medical group level. One could define a number of measures for example and then figure out what information is needed so that not only are the measures right but the risk adjustment is adequate, and then decide after that what is the minimal best way to get at that data. And that's different than approaching the problem as 'let's think of all the data elements we can possibly come up with and imagine every possible use down the road we'd have for it and then start from there.' That's probably not the best way to start.

I think if you started with a set of measures that were important there's likelihood that society, the state could buy into that, because then the purpose could be know and there'd be a discussion that would be productive. So I would start with, what's the point and then go from there.

ABELER: […] Are you familiar with the bill in front of us?

KNUTSON: Only recently. I was going to beg off saying anything specific about it because I honestly, as I say, I'm almost coming in more from a national perspective than. I'm less familiar with it.

ABELER: […] It's not adding any more law. It's taking away the authority to collect data. We're concerned it's gone too far, and so that's the whole discussion. And so how far do we pull back the authority without causing unnecessary harm to the likes of you and your successors and to the ability of the state. If you could weigh into that discussion a little later that might be helpful to us.

KNUTSON: Sure, and again, I'm coming at this thinking it's a consumer issue. That not having these data is the real consumer protection problem and as we move forward in our health care system, the kind of system that the majority of this country says they want a pluralistic system driven by consumers with a lot of choice. Any economist in any area of economics in any area of the market, would indicate that the most fundamental problem in a market is lack of information and that's true. That's probably one of the greatest problems in making a health care market work. So I just think about it differently. I think not having this information going forward is the real consumer protection problem.

BOUDREAU: I think we have a number of witnesses who testified previously that were consumer that may disagree with that statement.

KNUTSON: I understand that.

OTREMBA: […] We won't be able to assess unborn babies and how they're affected by the health conditions of the mother. That's just on thing that wouldn't be. And that's an important issue to me.

And in looking at a recent thesis that was published on researching. The conclusion…The most accurate research results come from researchers who were able to publish the results without permission from the people who wanted to research in the first place. What they found I when they were tied to a company or an agency and the results were negative they didn't get published. And if the results were positive they were pumped up to sound better than they really were.

I understand the need for the independent part of it, very clearly based on what I've read and experienced. But I also have a concern about the privacy part using names and identifiers, and in some of these statutes, I see some really good research that has helped us save millions of dollars in health care and I'm not ready to let go of that, but I am willing to tweak the name part of it. So it seems there's two parts and I can't make a decision based on what I have before me because some of it I absolutely am against and some of it I have to support so that presents a dilemma for a number of us who are looking at this bill.

BOUDREAU: You just stated the problem […]

HAAS: […] I really question, because we have not started collecting, so I don't know where all of this data's been used now to improve and lower health care costs. Because they want to start collecting this data. They're not doing it now.

OTREMBA: There are specific statutes that are in your repeal that have done research projects and focused on really important health issues that will be repealed in your bill.

BOUDREAU: That's the challenge we have. The question is, is there other methods of collecting the data and is this the only method? To the next witness.

STEVE PARENTE, Ph.D: I am a faculty member at the University of Minnesota in the Department of Health Care Management at the Carlson Business School and also I have joint appointments in the Medical School and School of Public Health. My comments today will reflect my own experiences as a researcher and not the University of Minnesota's.

Today I want to share my thoughts on the value of health insurance claims data for health policy and health care financing analysis. My area of expertise as an academic health economist is health care financing organizations with a specific focus on health care information technology and health insurance. The most frequent question of my research is, 'does X, whether X is a new technology, a health plan, a medical provider, a public health intervention work? And by work, I specifically mean whether it is improving someone's health, or doing so at a lower costs. And sometimes...I find that something is actually cheaper and making you healthier at the same time.

The research I do relies upon the use of secondary health insurance claims data. By secondary use, I mean that the data was originally generated to pay a medical provider's bill and now resides in a computer system held by a private insurer such as Blue Cross or a government insurer such a Medicare. The value of health insurance claims data for research is the ability to inexpensively survey literally millions of people's health data. This is not done to commute the researcher with a sense of power. It is done to mitigate the cruel realities of statistics: that large numbers are needed to identify specific events in medical care.

Questions that my research papers have addressed regarding the care of elderly diabetics patients, relied upon having sufficient large numbers to identify a diabetic population that does indeed create a denominator and then count recommended services -- that is, define a numerator--for populations that needed to receive a recommended, if not required, intervention to reduce the chances of blindness, amputation and/or death.

Defining a denominator and a numerator are where most of privacy's issues can lie. Specifying these things correctly permits an apples to apples comparison. At issue is whether a person can be uniquely identified in these data. Of course, they need to be identified to pay the claim, but does a researcher need to know the patient's name, social security number and date of birth? To be honest, I don't ever want to know the individual of anyone. What I need is the variable that tells me I have a unique individual in the data. The combination of costs, dates of service, procedures, and diagnosis recorded are the raw materials for a numerator. And to make it all work, sometimes I must link the denominator and numerator information at the person level. If I cannot make this linkage, the value of the data is lost.

As a business school academic, a term I often use with my students to help them value information, is opportunity costs, which is the amount you are willing to forgo to achieve an outcome. Rest assured that the opportunity costs of a strict medical privacy provision that restricts the use of secondary data for research are very real. And I'd like to offer you three brief examples.

The State of Minnesota led the nation in securing a tobacco damage settlement using health insurance claims data to make the case. You may think what you will about the value of this lawsuit or others that have followed it. But our state has certainly counted the settlement dollars as part of revenue. Having worked directly with other state's data as well as at the national Medicaid tobacco case, I guarantee you that many of the variables recommended to be used by the health department and the provision laid out were absolutely critical to identify that damage settlement.

A second example of the opportunity cost is one that has been mentioned before and it's somewhat selfish for me as a researcher. I and my colleagues at the University of Minnesota are completing the first sponsored empirical analysis of defined contribution or consumer-driven health plans. Plans like Definity Healthcare, based in Minneapolis, are leading the nation in this market in the same way that managed care was led in Minnesota 25 years ago.

These plans have a national media buzz because they offer consumers more choice while making the consumer more accountable for their health care expenses, thus the consumers win and the employers who are deciding to employ these plans also may win. The big question is, do they actually work? To answer that question, we received permission from six large U.S. Firms with over 200,000 covered lives to examine their health insurance claims to answer this question with results to be published this summer.

What if we could not use health insurance data to answer this question? A survey approach with patient consent would cost approximately 100 times the $300,000 price tag of our study and take at least another year to be determined. In addition, there are some things that surveys just don't do very well and unfortunately this is one of those analyses.

A final example, somewhat off in the future but worth noting, is the semi-real time use of retail pharmacy data to achieve , to identify actually a bioterror attack. If, God forbids, a biological attack occurred, where the disease manifests itself with flu-like symptoms, how do you propose we detect it? A new form, Our Flight Systems (?), is using a semi-live-and by semi-live I mean that the data is available within 5 seconds to three minutes-datafeed from major pharmacy chains accounting for 200 million Americans. This data system could be used to detect as statistically significant uptick in antibiotic prescriptions, detail contagion spreads, and provide an early warning system. However, the only way this system works is to have a running algorithm that identifies a numerator and a denominator with person-identification information running in semi-real time. If in the future, the state wanted to contract such an organization to be used as part of its activities, this provision that's being repealed would restrict such an action.

In closing I'd like to thank the committee.

REP. ABELER: [...] At what point? You wished you always knew a little bit more. You wished you have a bit more data. 'Oh, if we had these few more points' Given your appreciation for the value of benefits, at what point? What safeguards would you employ to make sure that the data remains secure and what safeguards are important for you as a person as you employ the methods you use in your research?

PARENTE: I never want to see the actual identifiers of an individual. I'll just say that upfront, as I said before. The extent that I would actually go depends on the research question, and to be quite honest, the client in play. If I happen to be doing a work as an independent consultant for an employer, and that employer has signed over an agreement that essentially allows me to see information of an individual nature, I'm working as their agent, not as an agent of the University of Minnesota. And then it's not an issue. If on the other hand, I spend most of my time as a researcher, the objective would be to bring in a third party, an objective third party, that would essentially be held accountable to look at the data I did in identifiable form, strip it of all identifiability, come up with a unique encrypted identifier that could not be reverse-engineered back, and then paying that firm to do something like that is very similar to what the state is proposing to do, but in external research, it's also done by other firms around the country. And the extent possible, depending on the client, you can make the provisions tougher and tougher and tougher, in terms of guaranteeing the privacy of that information to the point of actually having that organization indemnified if there ever is a breach that occurs. And increasingly, that's what's happening.

ABELER: [...] The state has a current system in place now that provides safeguards...Hacking is a concern...there are stories about how information got on the web...Do you think that state's current methods of safeguards is sufficient to make sure an individual feels comfortable that their data? That they'll freely give data and that you'll have true data that's valuable and that the data that's given is safe?

PARENTE: to be honest, I'm comfortable making a statement about that without actually reviewing the systems. I can tell you that I have provided that service of essentially independent verification of validation to the state of Maryland's provision of exactly what you folks are talking about. And in that case, they outsourced the collection of the data to an external third party, the Medstate group, actually in several groups, and when I went to check on the security of that data it was quite secure. You go in to a data center that basically had safeguards and alarms and provisions. It was not the idea of having a casual PC there with a hard drive with medical records data. It actually is a very secure mainframe or server environment. In some cases in a data center that is far removed from civilization, if you want to call it that. And in a lockdown procedure.

Whether the state is employing such systems or whether they choose to contract to such vendors, that's their choice. But other states have contracted that if they feel uncomfortable that they can provide that level of security.

ABELER: I appreciate the theoretical value of that, but what recourse does the person have?... And tell me about he chilling effect it might have on people being honest with their doctors in the future and actually skewing the data you seem to collect?

PARENTE: There's a lot of detail in what you're asking in terms of question. In terms of the issue of breach, the issue there is whether or not it's basically something that brings up a personal liability suit just like someone would be essentially slandered in the open, or something else to that effect. And in that case, it's basically handled exactly like that except for the data that happened to occur to a cause that was something different. There really is not a national medical data privacy law on the books that points out yet exactly what the rights of consumers are, at least not to the extent there is say in New York, or say something else to that effect. So it's hard to get beyond just what would come up in a personal liability suit. It's hard to really see what would really come from that.

Yet say for example the information was revealed that damaged a professional's reputation to the point where they would lose all future income because of the information that is revealed. They could sue for those damages that's their future income stream. That's just like the way it would be for anything else.

The second part of your question is quite different. Could you re-phrase?

ABELER: The state I don't believe could be sued....What about? This has now hit the news. This was a quiet thing until the rules went forward. No one knew about this collection much. It was kinda just sitting on the shelf and people did it a little bit. You got your data and off you went. But now, it's in the news. And if we don't remedy it, I'm afraid that people will be less forthcoming to their doctors about their conditions. They might not tell the truth about encounters they've had. They might refuse a test that might reveal something they want to know about their health care but are afraid to find out for fear it gets in some arena they don't want it to get into. Do you fear that could happen and create exactly the opposite of what you wanted to have happen by the data?

PARENTE: I think there's inconclusive information to really suggest whether or not people are really going to basically hold back on their information. I think there's enough information that's circulated in the media about medical privacy issues as it is that people if they really want to hold back on their information they can. The issue is, how much of it can, not to get too technical, how much can you really hold back necessarily? We're talking about, or largely the conversation has been largely focused on, say maybe, hospital records or medical records. The last example I gave you was pharmaceutical information at the retail pharmacy level, hasn't even come up here. Yet that information is there. Are you suggesting that people are just not going to have their scripts filled in the nature of privacy? Well, that's fine.

I think ultimately this comes down to an egalitarian versus utilitarian argument over the value of this information. And I think what has to happen in the case of maybe the state and researchers like myself is there has to be a clear case, or at least better statements and more lucid statements about what the value of this information is taken as a whole to potentially effect a utilitarian good, as opposed to the egalitarian damage of essentially the individual's data and privacy-or the threat of it-being purged.

ABELER: It's a philosophical policy question. What shall we subject our populace to? Do we want to make sure those 600,000 lives that you were examining at this insurance company in a different state? Do we think they need to know they were being evaluated or not? That's the question. That the entire question of this whole point. And what's the greater good compared to the potential harm? You've helped frame the question very well/

REP. WILKIN: I have two questions. The first one is, where is patient consent in all this? In your profession, is that important? Is that unimportant? And the second one is [unintelligible] all the real smart people in my family wen into medicine and I went into finance, so I'm still trying to kind of put together why you need the individually-identifiable records rather tan the aggregate. If you could elaborate a little more about that.

PARENTE: [...] to the issue of why does this data need to be identifiable. I think part of it is just linkage. And it comes down to the one of the basic points I mentioned before having the right denominator versus numerator. It really just comes down to a technical programming issue. When you count people or services up, you want to count them up correctly so that you don't double count or undercount or other things like that. If you are unable to actually identify a unique individual in these databases, essentially the use of the data that actually specifies a [unintelligible], the basic grounding of any sort of simple statistics is lost.

And the issue of people moving from health plan to health plan even complicates it further. Mr. Knutson made the point about the issue of consumer-driven health plans and people moving from health plan to health plan. The turnover ate in many health plans can be as much as 20-30 percent. You talk about he senior population moving outside of Medicare HMOs-a big issue given the Republican agenda nationally now-the turnover rate can be even higher than that.

And under current Medicare provisions, someone can leave a Medicare HMO and walk in and out as they want, you know month by month. and if you say you want to track and see whether that stuff is actually helping or hurting seniors that's another research project that I'm doing with the assistance of United Health care, I need to be able to track people at that individually-identifiable level to actually see those sorts of effects. If I can't, I'm left to a survey usually asked about 8 months after the fact-and potentially someone has died at that point if we're talking about the Medicare population--to try to track those sorts of impacts. that's why it needs to be individually-identifiable.

WILKIN: What if we did this entirely outside of the department of health? What if we were able to do this just at the plan level? If we had some kind of universal identifier number that doesn't have the person's name, that is not as individually-identifiable except for that plans to which they belong to, so we get this all out of the department of health? As I said before, I contract with my plan to have my information, but I don't contract with the department of health. In my opinion, they have no business knowing my medical record. Would that kind of thing work?

PARENTE: Possibly. I think there's two issues you have to worry about. One about the fact is whether or not it'd be independent and actually be an apples to apples comparison. Whenever the information is actually done at the health plan level, the problem with doing some of this data analysis is that it's almost a guild trade. It is not very easy to actually do this analysis, in part because the data that is worked with is not designed to actually look at outcomes. It's designed to pay bills. And so you're basically left with the researcher's or the statistician's assumptions essentially to make an apples to apples comparison. And that's why I was sort of. you need some high validity checks essentially of the health plan data to see if that works.

The second argument is one of economies of scale that fees on the first argument. As Mr. Knutson pointed out, it's relatively inexpensive for a health plan to cut the data deep-to sort of strip off the identifiers and give it to the State-as opposed to the health plan actually generating these aggregated statistics that you're talking about. That cost is actually significant. That may be what's actually in the hundreds of thousands to or $2 million-I don't honestly think it's that much money-but that's far more expensive than the health plan itself just handing the data over to a third party, where it's the government or something the government contracts with and letting that third party merge all of the data together to essentially come up with a uniform reporting standard. You get rid of the issue of inconsistency-so that you only have one guild trade coming up with the apples to apples comparison-and you get the economies of scale since computers can handle these things of pooling all the data together. I can tell you that the CPU processing costs of essentially handling Blue Cross' data versus Blue Cross and the rest of the data is approximately a five minute differential on the server. It's not that big of a deal.

REP. WALKER: […] "You don't get that data, but somebody does"…. [story about a woman in grocery store who knew what health plan her mother is in] "Every blue moon it slips and my fear is it will slip and it's going to be Neva Walker."

TWILA BRASE, RN: Twila Brase, Citizens' Council on Health Care. I'm basically here to support what Rep. Haas is doing. I can say just a few quick comments in response to what has already been said. I think that because you have heard from me before that would be the best thing that I could do.

I did find just after listening to Mr. Parente in particular, the idea that the data, the data that the department intends to receive, the data that BHCAG is hoping to use to get best practices from, that data is not made for getting outcomes. And as he said, it is gong to be based on the researchers assumptions of comparing apples to apples what it all means. And part of that is because of course you don't have what happened to the patient, you don't have the patient's compliance rates, you don't hav3e the conversations that happened between the patients and the doctor. All it is is data that's meant for cost purposes. And I think that's important to understand because some of the testifiers here are hoping to be able to use this data to create treatment guidelines and best practices and really the data's not even meant for that purposes. Nor can it really be used justifiably to come up with something because i6's all going to be based on assumptions.

And I would also just say, who gets to define quality and outcomes. Is my quality like your quality? As beauty is in the eye of the beholder, so is quali6y of health care services. That's an important thing to remember. And when You have physicians who will have in essence report cards- and I can't remember if that was Representative Bradley who asked about where report cards who be in here. Somebody asked that question-There are three places within what's being repealed that have language that could lead to report cards. One is more specific than the other. If you look at 62J.301 subdivision 3, number 6, it talks about the department working closely with health plan companies and health care providers to promote improvements in health care efficiency and effectiveness that could lead to report cards. It could lead to outcome reporting. And then…

BOUDREAU: Twila, can you state the page?

BRASE: I don't have the actual bill. I'm sorry.


BRASE: The next one is 62J.311, Analysis and Use of Data on R2, subd. 2(6), which talks about promoting continuous improvement in the efficiency and the effectiveness of health care delivery. And the last on, 62J.321 Data Collection and Processing procedures, bottom of 3R or top of 4R, subdivision 5(e). And that one is perhaps the most specific because it talks about actually identifying providers.

And I guess the last thing to say is don't. When Dr. Parente said that there's no evidence or not much evidence that people will actually make changes - there are the 15% of the respondents that are already taking evasive action to protect their health care [privacy]. That means the health care those people is jeopardized as a result of them choosing not to actually receive actual health care services. So those are just a few comments.

Oh, I'm sorry, Madam Chair. One other comment. There's a lot of talk here about consumer-directed health plans and increasing patient choice. And our organization is all about increasing patient choice. But we are not willing t5o even think that the public out there is perfectly fine with their choice of what happens to their data being taken away from them so that they will hopefully respond in making different choices. We really feel you do not have to violate the privacy rights of patients in order to have them make choices. They make choices every day without state databases. Thank you.

BOUDREAU: Is there anyone else who wishes to make a statement or testify as it relates to this bill?

ROGER BANKS: My name is Roger Banks. I'm research analyst for the Council on Black Minnesotans. I would like to direct my comments to the concep5t of consumer choice. My purpose essentially is to bring to your attention that these are more variables to consider in dealing with the issue of consumer choice than just sort of the statistical discussion and variable discussions that I've heard today. I speak for the most part from the perspective of consumers of color. And it's absolutely essential that data be collected by race and ethnicity so that, one, we'll be able to determine the health status of those particular groups and for those groups to be able to make intelligent decisions relative to the cultural competency of the health providers.

I've been working in this area for a number of years. I worked with Lou Fuller when she was initially with the Office of Minority Health. One of the projects we had to do with health providers-i.e., principally HMOs-providing data by race. You as legislators mandated that HMOs provide information and put together a plan of action relative to cultural competency. None of the HMOs did. This point out a very glaring area of neglect, but in some ways a lack of interest relative to the populations of color and the types of treatment that they receive from our health providers. I'm very much concerned that we need this kind of information as consumers so that we might be able to make intelligent decisions, intelligent decisions based on the extent to which we've been fairly treated. Treated with respect in the health care provision. I think you very much. I would really appreciate it at a later date…First time I've seen it…[the bill] […]


REP. BRADLEY: I think that most of the members of the committee know and the public knows, that I'm a supporter of good information. I'm certainly a supporter of consumer involvement. I have not had as strong a concern about he privacy-although I think constituents have every right to convince us of their concerns and I've been persuaded there's a lot of consumers who are.

I think the last time when we were receiving this, I expressed concerns about sections that I thought didn't have anything to do with personally identifiable data. Maybe this is reparable, but I would take a little quick review for members in the repealer section that we didn't have in front of us last time, and show you why I think there's still some room for improvement, because it seems like there's language in this which creates some very vague and powerful powers in the part of the department of health that are, I think, troublesome to the public…[ notes language: "any other data", "any additional data", etc.]

I still sort of stand on my concerns that J.38, 381, 40, and to some extent 41 and 42, I think are important bases for much of the quality work that we've seen before and the quality of cost information that was seen in the cost and quality health care task forces. And I'm sympathetic to that, but now that I begin to read the detail I think I begin to see why some of the public concerns are there. It seems to me that as this bill proceeds that we need to be a little more clear and a little less scary in th3 language that seems to give such road powers to the commissioner. If we've been managing to get by, we ought to be able by now to be a little more explicit in terms of the conditions under which the department can collect data and we certainly ought to be able to do something about understanding better "unaggregated form." […] I would request that it come back to the Finance Committee. […]

BOUDREAU: Representative Haas, would you be willing to listen to some specifics?

HAAS: […] As with all bills…I always have an open door and an open mind […] We got to have a plan. The state has no plan. They're just collecting data. […]

How do we encourage people to participate as consumers? […]

How many of you opened up your plan certificate when you got it this year from our state health plan and read it? The only thing you probably did was took the cards out of the folder and put them in your wallet…People do not get informed about their health care decisions until they're on their way to the doctors. That's when they're making their choices…People don't react unless there's an emergency or there's a problem. Then we react. What we're doing with this data is not engaging the consumer. We can have all the data in the world out there. But until it affects you personally and you are on your way to the data is when you're going to start doing your research about your illness and if it's an ongoing illness, how am I going to get better help. That's when you start accessing data. And that's maybe where the value is. We need to step back with the repeal of this…then come forward through the process with what do we really want and what do we really need and have that discussion, but start from scratch. That's what we need to do, and do it right…[…]

ABELER: […] I'm voting yes with an asterisk…[…] We can't throw out all the good.

HUNTLEY: […] This bill as it is today basically eliminates the health economics section of the department of health that supplies us with all this information…[…] It would really do a disservice to the legislature if we can't collect the kind of information we need to make decisions in health care costs and quality.

BOUDREAU: Rep. Huntley, J.381 references J.38.

BRADLEY: I'd like to try something. The citations I made are all fixable and as a matter of fact, I believe everyone of the sections I mentioned has been in process as far as collecting data since early 1990's, 1993, 1994 And I think we haven't had any harmful effects. I still think those phrases that I see in there ought not be in, but we can fix that. My suggestion would be that we remove form your repealer sections 62J.38, 381, 40., 41 and 42. And I'd be happy to work with you to clean up the language to get rid of those very broad based areas that haven't been abused so far, as best as I can tell. But I think we'd be better served if that language stayed in there for some of the same reasons that Rep. Huntley mentioned. Here are sections that we've used. I think it's just there's just some working in there, as long as we're cleaning it up as you're doing so well, that we could do as this bill moves along. It'd be a lot better to keep it in front of us. Would you be willing to accept an amendment like that?

HAAS: I will need to take a look at this as we go through the process and get more information. But I'm open to looking at this. Take a peek at it. See what we can do.

BRADLEY: What I mean though is if we don't reinstate that, it'll be gone and it'll be kind of hard to sort of resurrect and keep track of it. If we leave those sections in then we have a chance to clean it up and I don't think it's going to be that hard to clean up those sections because it's just a sentence or two in each one of those sections that we would need to deal with.

HAAS: You know, I think you and I need to sit down and have those discussions and see what we can come up with.

BOUDREAU: So Representative Haas, it sounds like you're willing to work with Representative Bradley on an author's amendment for the next hearing.

BRADLEY: Thank you Madam Chair, but I don't know that I really got an answer. I guess, maybe just to do it because I really feel pretty strongly that we need to reinstate those so Madam Chair, I would move to amend House File 297 on page 7 by striking on lines 12 and 13, 62J. 38, 62J.381, 62J.40, 62J. 41 and 62J. 42 and then we'd have to instruct staff to make any other corrections as would be necessary.

BOUDREAU: To that motion, Representative Haas.

HAAS: I would ask the members to oppose that because I just haven't had a chance to go through each one in detail to see maybe we can get rid of most of the language and then just keep small amounts of it in there rather than just stripping them right out because all these are intertwined with one another and I think we have to see how we can untangle them. So I'd appreciate it if Representative Bradley would withdraw his motion so that we can sit down and go through it, and work through it together to see what we do have there and then we can all vote on it intelligently as we move forward.

BOUDREAU: And this bill has another stop to Government Ops for sure. I'm not sure. Commerce may be another stop. Certainly, it's going to be re-referred back to the Health and Human Services Finance Committee and I would think at that point Representative Bradley you would have every ability to make further amendments if needed. I think at this point we should give Representative Haas at least the ability to try to resolve some of the concerns that you've mentioned. But again, if you wish to have that motion.

BRADLEY: Representative Haas. I'm not at all trying to be destructive to what you're trying to do. I have read those sections pretty carefully. And keep in mind as I said that most of that data that we're talking about, the collection's been going on since 1993, 1994 and it has been important [unintelligible]. And the only thing I can find even close as being any kind of problem are the citations that I just gave. And if there's something additional I would certainly be happy and if you find out the intricacies are more complicated than anything I could find I'd be happy to work with you. I think the advantage of keeping the language in front of us, it keeps it sort of alive in the discussion. If it disappears, then you constantly have to go to sort of off the page in order to work on any problems and then bring it back. That's my reason and I'm not at all. I agree with everything that you're saying, everything you've done. It's just that I've looked through these sections very carefully. It's not new news because I mentioned my concern last time when we were doing this and I just think that it would be a wise way for us to proceed. And I apologize. I dint' mean to get crossways in here but I really think it's the best for you even as the author to keep these in front of us so we can fix them. If we can't fix them, they'll be gone, but to keep them in front of use so we can try to fix them.

BOUDREAU: Well, Representative Bradley. Within those statutes there is statements about any additional data on health care programs in unaggregated form with repeated. It keeps repeating. In leaving that, it's still not correct.

REP. NEVA WALKER: I actually am in support of Representative Bradley's motion. I too have the concerns you just raised Madam Chair however by this bill going to two different committees I don'6 sit on and actually coming back to the Finance Committee which I don't sit on, I have more faith in that language being cleaned up with Chair Bradley than some of the other stops along the way and how things will be turned out. You know this is my last opportunity pretty much until it comes to ways and means. And pretty much by the time it gets to ways and means it will be in bill form. And so I'm not going to have an opportunity to speak up on those sections again and those are the sections that I do have the same concerns about. So unless we can just vote on Bradley's motion or even just refer it without recommendation, I'm actually in support of the motion.

BOUDREAU: Well members at this point I think that repealing hose statutes without, or taking them out of the bill without fixing them is really not a solution and it is a little bit of a dilemma here so I'm looking for your advice but there's no guarantee in us pulling those particular ones out of the repealer that going forth there's not going to be put back in. I mean it's still going to come back to finance and I still feel that may be the best. I f we sent a strong message to Rep. Haas, that these are the concerns we have. We would like to keep some of that language in but our concern with the way it's state. I think that's sufficient and.

ABELER: Madam Chair. Advice?

BOUDREAU: Go right for it.

ABELER: If the Bradley motion prevails, and I support it, just because it will move along this discussion further, and actually, it will remove a lot of objections people have with the bill by taking away the most glaring good things about it. That removing the good things is one of the biggest objections I see so far in this thing. Madam Chair, you could make an amendment and offer it to him in gov ops. As to improve those repealed sections the way you prefer as a positive amendment on the bill an d then you could handle your concern in your own way.

BOUDREAU: The problem is gov ops meets right now, during the time I have this committee.

HAAS: Rep. Abeler, I see what you're saying but I'd rather take the currant language and amend it through the process, as you know, as an author with being able to explain that we're changing the language because of concerns, rather than saying I'm trying to add new language back into the bill if it's taken out. That's my concern. Let me work, and we do this in this legislature as we work, as we go through the committee process to make changes to the bill. And we bring amendment to the next committee to do that. And, you know, I've heard the concerns and I do want to take a second look at these sections and see what potentially we can do to change them. And so, that's what I'm asking you to do members is give me the chance to work it through the process. But, we have a number of committees to go through. It will come back to Representative Bradley's it sounds like and then from there we'll be going to the floor where we'll address you know concerns also. But by the time we get at that process, I think we'll have a good bill you know to present to members so they can vote on it.

BRADLEY: I trust Representative Haas intent. The language will stay in front of us because the repealers will still be attached. If you don't, I'll beat the heck out of you or something. I don't know. [laughter] I withdraw my amendment.

BOUDREAU: To that point, the motion before as I did not previously state it, would be that House File 297 be recommended to pass and be re-referred to the Committee on Government Operations with the understanding that some of these concerns will be taken care of.

HAAS: They will be, Madam Chair.

BOUDREAU: That's an added comment… All those in favor….

[vote taken]

BOUDREAU: Motion prevails

HAAS: Thank you Madam Chair and Committee Members.

BOUDREAU: The meeting is adjourned.