California’s Obamacare exchange to collect insurance data on patients

California’s health insurance exchange wants to know why you got sick this summer.

With 1.4 million people enrolled, the state-run marketplace is embarking on an ambitious effort to collect insurance company data on prescriptions, doctor visits and hospital stays for every Obamacare patient.

Covered California says this massive data-mining project is essential to measure the quality of care that patients receive and to hold health insurers and medical providers accountable under the Affordable Care Act.

The state in April signed a five-year, $9.3-million contract with Truven Health Analytics Inc. of Michigan to run the database.

The effort has raised questions about patient privacy and whether the state is doing enough to inform consumers about how their data will be used. There are also worries about security amid massive breaches at Anthem Inc. and other health insurers affecting millions of Americans.

Peter Lee, executive director of Covered California, said protecting sensitive information was a top priority and that consumers stand to benefit from the collection of medical data. He acknowledged the state had no plans to let consumers opt out and keep their records out of the database.

“To understand the quality of care being provided, you need everybody in,� Lee said. “Without the data, we are only delivering on half the promise of the Affordable Care Act. We have to get beyond measuring access by anecdote.�

For instance, the exchange will look to track how many diabetics are having their chronic condition managed correctly and how many screening tests for cancer led to early diagnosis and treatment.

Many health-policy experts applaud California’s efforts to flex its muscle as a major healthcare purchaser to demand data that insurers are often reluctant to share.

Public disclosure of health plan performance could put pressure on insurers to better serve patients, giving the state another bargaining chip in rate negotiations.

But the recent national debate over bulk collection of phone records has highlighted the public’s wariness about the government amassing vast amounts of personal information.

“There is potential for so much public good, but there is a greater public good in protecting privacy and security,� said Michelle De Mooy, deputy director for consumer privacy at the Center for Democracy and Technology in Washington. “I think asking permission is absolutely integral. It is not the state’s data.�

The exchange is mindful of those concerns, Lee said, and plans to seek input from consumer groups and medical experts on how best to operate the program.

Health insurers won’t begin sending patient data to Truven until this fall at the earliest. But the information could include medical claims that were incurred earlier in the exchange.

And the exchange emphasized that personal health information would be held by Truven; only data stripped of identifying information will be shared with the state for research purposes.

Truven referred questions about the program to the exchange.

In its notice of privacy practices online, the exchange advises people it can collect health data and “we can use or share your information for research.�

Glenn Cohen, a professor at Harvard Law School and expert on the ethics of using healthcare data, said the lack of an opt-out was troubling because many exchange customers don’t have the option to shop elsewhere.

Nearly 90% of Covered California customers receive a federal premium subsidy, and they can access those tax dollars only through the exchange.

“I worry about these people being a captive audience,� Cohen said. “The more voice you give to patients in this process, the more ethically justified you are doing this with big data.�

Covered California has stumbled in the past over its handling of consumer information.

It drew complaints during the Obamacare rollout for sharing applicants’ contact information, without their knowledge, with insurance agents and enrollment counselors.

In response, state lawmakers have pushed for legislation that would bar the dissemination of names, emails and phone numbers with those third parties unless the person requested help.

State Sen. Joel Anderson (R-San Diego), who is spearheading the effort, said the exchange must tread carefully or risk losing the public’s confidence.

“I want to see Covered California succeed, but I want citizens to be reassured we aren’t playing fast and loose with their data,� Anderson said. “That hurts you in the long run.�

For their part, health insurers said they supported the exchange’s efforts but wanted to make sure the data remained well-protected.

Insurers are accustomed to sharing aggregated claims data with large employers, to show them trends in medical costs and where the most expensive bills are coming from. Details on individual employees are withheld, in keeping with privacy laws.

“For the vast majority of Americans, this information is already shared on a daily basis with protections in place,� Lee said.

The exchange got an early glimpse at the power of enrollee data last year during negotiations with health insurers.

It shared details on Covered California enrollees with researchers at UC San Francisco and UC San Diego, and those names were compared with a state database of patients who received hospital care in 2012.

The overall health of people who signed up at the end of enrollment in April 2014 was 11% better than the first enrollees in October 2013, based on risk scores assigned by researchers.

Lee said the exchange used that data — showing an influx of healthier applicants — to negotiate lower premiums from insurers, saving consumers more than $100 million this year. The average rate increase statewide was 4.2%; 2016 rates will be announced next month.

Dr. Andrew Bindman, the lead UC San Francisco researcher on the exchange’s 2014 enrollment, said the public’s privacy concerns are understandable and must be addressed to realize the benefits of big data in healthcare.

“This shouldn’t be a mysterious thing the public never knows about,� he said.

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Twitter: @chadterhune