CXO

Medicare release and DATA Act signal major events in the age of data transparency

Alex Howard reports on a Medicare dataset made available online, and the DATA Act's passage in the Senate.

medicalmoney041414.jpg
 Image: iStock/graffoto8

On April 10, 2014 I talked about a data revolution at a World Bank event in Washington, D.C. and listened to the thoughts of others about the subject. In his remarks, Dr. Jim Yong Kim, president of the World Bank Group, emphasized the need for more data about the poor and for improvements in the use of that data for development.

Such aspirations for data are common in the nation's capitol these days, or at any gathering of global leaders around the world. The recent rise of "data-driven everything" in politics, commerce, and media has led observers like The New York Times to call this philosophy of data "data-ism" and provided feedstock for legions of pundits to warn of the risks of bad data, bias, and mistaking correlation for causation, along with reminders of when decisions have been led astray by numbers in past years.

One truth remains constant throughout those hopes and concerns, however: Information is power, from the Beltway to Brussels to Beijing. People in charge of making business or public policy decisions need the best data they can to inform them, whether they're making investments in new ventures, enacting regulatory reforms, or building resilience against climate change into communities. Many new sources of data are providing insight into sweeping changes in society and empowering consumers and creators alike.

Whether it's from the private or public sector, academia, or media, data can provide the backbone for understanding. Data releases can even be used as a diplomatic lever (e.g., the U.S. Embassy in Beijing publishing open data about air pollution in China).

While the economic impact of open data has received a great deal of attention in recent years (including my column about Open Data 500), the broader impact of releases upon the ability of the public to navigate decisions in everyday life or crises still lies ahead, despite the enormous utility that internet-connected smartphones already provide through maps and apps.

Data transparency into Medicare payments

This past week, another dataset flowed online from the Centers for Medicare & Medicaid Services (CMS). For the first time, the public has access to the billing practices of over 825,000 physicians in the United States.

The data release is the result of pressure from years of investigation by The Wall Street Journal and litigation from its parent company, Dow Jones. While the Medicare payment data has limits (such as failing to capture overhead costs or the complexity of various treatments or procedures), it is a historic watershed in US federal government disclosures. In less than a week, Medicare Provider Utilization and Payment Data for Physicians and Other Suppliers has already been directly downloaded nearly 100,000 times, with much more reuse through third parties. (See an interactive visualization of the data on the Practice Fusion site.)

While initial coverage has focused upon the doctors who earn millions in revenue and enabling the public to explore what Medicare pays for a doctor's care, the long-term outcome of the release holds the potential to inform and empower consumers as the data is integrated into services that help people make health care decisions.

"As we have seen with other releases of government data — from car safety ratings, to consumer credit card complaints, to weather and climate measurements and the recent launch of the Administration's Climate Data Initiative to help spur the development of resiliency tools — this kind of openness and transparency can fuel innovation and research for years to come," wrote US chief technology officer Todd Park, on The White House blog.

Doctors are not happy about the release, given the potential for the data to be presented without context, but public interest advocates are thrilled. The release may also help watchdogs find fraud, waste, and abuse in the system.

"The Administration took a major step this week by expanding public access to a vast amount of Medicare payment information," said US Senator Tom Carper (D-DE) in a statement. "While this new public database will need ongoing maintenance and refinement, there are clearly opportunities for consumers, health care providers and policymakers to gain a better understanding of how our Medicare dollars are spent, including helping our ongoing efforts to curb waste, fraud, and abuse. I believe that creating a pool of accessible Medicare payment information will help forge a stronger partnership between the public, federal agencies and the health care community to identify waste and fraud, and improve how our vital health care systems operate."

"This provides us with a real opportunity to shine a spotlight on the billing practices in the Medicare program," said US Senator Orrin Hatch (R-UT) in a statement. "The release of this data provides greater transparency which, in turn, will allow us to hold the bad actors who take advantage of our seniors and taxpayers accountable."

CMS officials are hopeful that third-party data analysis will improve the system.

"This is going to yield a better Medicare program and a better framework for the physician fee schedule," said Jonathan Blum, principal deputy administrator at CMS, in a briefing. "If we can get our hands around understanding what we're paying for, it will help to reduce the costs of the overall Medicare program and make it more fair for recipients."

Celebrating the passage of the DATA Act in the US Senate

This past week also brought reason to hope that more data-driven transparency may be coming soon to the federal government as a whole, when the US Senate unanimously passed S.994, the Digital Accountability and Transparency Act of 2013 (the DATA Act). The bill would establish financial data standards for the federal government, require federal agencies to comply with them, and ensure that more spending data is published online. If the bill is passed by the the US House of Representatives later this month, it will be the most significant open government legislation enacted by Congress in generations, going back to the Freedom of Information Act in 1966.

The DATA Act has earned support from a broad coalition of open government advocates and industry groups. On one side, good government advocates hope to gain more insight into the business of government, improving operations and programs; on the other, critics of government inefficiency and waste hope to document waste and shrink the size of government. Proponents of ideological positions will benefit from increased data about spending. (The only entity that has shown much opposition to it sits at 1600 Pennsylvania Avenue, where the White House Office of Management and Budget sought to strip the bill of its funding mechanism and consolidate power over spending. The amended version of the DATA Act that passed the Senate remains substantially intact.)

There's every reason to expect that Representatives will act to send the DATA Act to the President's desk: The House Committee for Oversight and Government Reform supports the Senate version; the House version passed the chamber by a vote of 388-1; and House Majority Leader Eric Cantor has pledged to quickly move it.

To date, the White House Office of Management and Budget has expressed support for Congressional attention to open government, if not the bill itself.

"We share Senator Warner's commitment to transparency and government accountability, support the Senator and his efforts to pass the DATA Act, and appreciate his focus on the issue," said OMB spokesman Frank Benanati.

The congruence of the bill's provisions and the administration's open data policy make it quite unlikely that the President will veto it.

There are many caveats remaining with respect to how agencies implement the DATA Act, and it will be some time before that implementation is completed, but its passage may be the signature accomplishment of a 113th Congress that has done little else to distinguish itself over the past year. Even if its provisions come to pass, providing the nation with more insight into spending, it will take many more years for the public to regain trust that those tax dollars are being spent well.

Editor's note: This article was updated on April 16, 2014.

About

Alex Howard writes about how shifts in technology are changing government and society. A former fellow at Harvard and Columbia, he is the founder of "E Pluribus Unum," a blog focused on open government and technology.

Editor's Picks