Medicare release of 2012 Part B data

Recently the Centers for Medicare and Medicaid Services (CMS) released Medicare provider utilization and payment data to the public. The data released accounts for a relatively small and biased view of total Medicare spending (Table 1). Nonetheless, it does make public the cost, to both Medicare and to patients, of most of the procedures performed for seniors in the United States.

Table 1 - Understanding the data. The Medicare data release contains a subset of Medicare Part B.  Spending for the “Part B data release” row was computed directly from the data. Otherwise, spending reported here was derived from this article.

Medicare	Spending (billions of dollars)	Description
Part A	$214	Hospital fees, home health, skilled nursing
Part B	$145	"Medically necessary" services and supplies
Advantage Plans	$123	Accountable care and other risk sharing arrangements
Part D	$54	Drugs
Part B data release	$77	Filtered to protect patient anonymity. Contains cases where physician performed procedure > 10 times.

We have seen a number of articles recently utilizing the data (1,2) to focus on the large sums of money being collected from Medicare by relatively few physicians.  This should not, however, be particularly surprising, as the 80/20 principle is a relatively ubiquitous phenomenon in many industries.  On the other side of the healthcare coin, similar observations (1,2) have been made regarding a relatively small percentage of patients who account for a large percentage of overall healthcare spending.

Before digging into this data it is worth understanding some of its weaknesses. First, the data has been filtered in order to protect the anonymity of patients.  Specifically, if a physician has performed a particular procedure less than 10 times, then data on that procedure from that physician isn’t available. Second, the data covers only Medicare Part B “fee-for-service” claims from 2012.

Because of the type of data filtering being used, non-specialists – who may not meet the 10-time threshold on any particular procedure – appear to collect a lower percentage of the Medicare dollars than they actually do. This filtering plus unavailable data from Parts A, C and D make articles claiming that particular portions of the pie go to particular individuals somewhat suspect.

While in the process of analyzing the CMS physician payment data it is tempting to focus on the practices of individual physicians – the data lists the names and work addresses of over 880,000 different healthcare providers – that should not be the main purpose of this data.  In addition to that, because of the biased filtering and missing data from Medicare Parts A, C and D, it isn’t even what the data is best suited for. 

In a companion article to this one, we look at the prices of various treatments that are approved by the FDA and paid for by Medicare.  This data release offers the opportunity to examine the way that Medicare pricing combined with healthcare market forces lead to decisions about the value of human life. If by releasing it CMS makes it possible to move our healthcare system closer to a free market – in which providers compete on prices and quality metrics that are transparent – then we are closer to addressing the inefficiencies and huge costs of our healthcare system.