Jun 25 2024

What Is Information Asymmetry, and How Does It Hurt Providers?

While health plans are gaining more access to clinical data, provider organizations aren’t seeing the same flow of financial and administrative data in return.

Policy and market changes are freeing up the data flowing from provider organizations to health plans, but they are not promoting adequate data transfers from health plans back to the providers. The resulting information asymmetry is creating a power imbalance that is benefitting health plans at the expense of physicians and their patients. 

To address this, it’s important for healthcare leaders to understand why the imbalance exists, what its impact will be and what provider organizations can do about it.

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The Source of Information Asymmetry in Healthcare

The U.S. does not have a monolithic healthcare system, but rather a fragmented patchwork of over 900,000 organizations. Healthcare delivery in the U.S. is generally so complex that it requires the coordination of multiple organizations. This is why interoperability — the ability to exchange information with other organizations — is so important. If complete and up-to-date information is available at the right place, at the right time and presented in the right way, it can improve patient care and even save lives.

Unsurprisingly, most data sharing initiatives begin with clinical data and later move on to other important data domains such as payment, operations, public health and clinical research. The U.S. has been incentivizing the digitization and sharing of clinical data for at least two decades. Policy developments such as information blocking rules, application programming interfaces for patient access, a national data network (for example, the Trusted Exchange Framework and Common Agreement, or TEFCA) and other advances are also leading to a world where clinical patient data is more liquid and easier to share securely with other organizations.

The problem, and it is a big one for providers, is that health plans will have all the clinical, financial and administrative information while the provider organizations will be missing the financial data they desperately need. U.S. policymakers promise that financial and administrative data will flow more freely sometime in the future, but it is unclear when (and even if) this will happen. Health plans generally refuse to share the most important financial data elements with provider organizations, citing restrictions in their contracts and states laws that limit what data they can share. And the proposed U.S. policies list the financial data elements as optional, meaning most payers will not choose to share them.

LEARN MORE: How can increased data sharing improve health outcomes? 

The Impact of Opening the Data Floodgates for Health Plans

Health plans benefit from clinical data because they can use it for quality measures, patient risk assessment, care coordination, performance projections and many other purposes that drive their businesses. Provider organizations already have much of the clinical data they need because it was generated within their systems. What they need now is financial and administrative data from the health plans so that they can better manage their businesses and support their patients. Financial data is also required for budgeting and forecasting processes and for deciding when to invest in people and technology to support patient care.

The coming state of information asymmetry will have a profound effect on U.S. provider organizations because health plans and tech companies will have access to cleaner and more complete data — closer to real time, from across the country — than they have before. In essence, the health plans will have everything they need to protect their own interests and to squeeze those of providers and patients.

Provider Organizations Can Advocate for a Balanced Data Approach

To prepare for a world in which liquid healthcare data flows to health plans, provider organizations should build their interoperability expertise and push to receive the data they need in return. Provider organizations should:

  • Advocate for data partnerships and balanced data exchange with health plans as part of the contracting process
  • Evaluate the business impact and productivity gains from interoperability and focus on real-world use cases that are meaningful to them and their health plan partners
  • Participate in interoperability accelerators that create national data standards (such as the Da Vinci Project, part of the Fast Healthcare Interoperability Resources’ accelerators program)
  • Advocate with federal and local officials for a balanced, two-way approach to data sharing with health plans

If done right, data exchange policies could create a firm foundation on which health plans and provider organizations could partner to improve patient care. The era of true healthcare interoperability is on the horizon, and provider organizations that attempt to prevent it will be frustrated. What they should demand is a balanced approach to data exchange, in which payers and providers have a shared understanding of both the financial and clinical conditions of their patients. They should request a seat at the table with health plans, policymakers and vendors to ensure their perspectives are represented.

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