big_databy James A. Bacon

Yesterday I blogged about the All-Payer Claims Database, which has the potential to provide unprecedented insight into medical outcomes and charges in Virginia. By consolidating medical claims data for hundreds of millions of health claims, the database will enable employers, insurers and hospitals to conduct analytical studies that were impossible previously.

There is a lot of maneuvering behind the scenes regarding the database, as I have learned from an informed source whom I will not quote because we were chatting informally and he might have thought we were off the record.

Participation in the database is voluntary, so it took years of coaxing and wrangling to persuade Virginia’s private insurance companies to relinquish their data. Anthem Blue Cross-Blue Shield, the state’s largest insurer, is the most ambivalent about the project. With more than one million Virginia customers, its database is big enough that it can go solo with the kind of analysis people envision for the statewide database. That ability confers it a significant competitive advantage over its smaller rivals. If Anthem dropped out, the value of the statewide database would diminish significantly. Accordingly, the General Assembly may consider legislation in 2016 to make participation mandatory.

That raises an interesting philosophical question: Is it justifiable for state government to mandate the sharing of outcomes data? In an era in which data confers tremendous marketplace power, any such mandate would penalize Anthem. The insurer could advance a plausible argument that a requisitioning of its data would amount to an uncompensated seizure of valuable property — property far more valuable than its office buildings, computer networks and other tangible assets.

But Anthem’s right to protect its property from government seizure conflicts with the public good that can be achieved through the sharing of data. The bigger and more comprehensive the database, the greater the benefits to public health that can be achieved by mining it.

Politicians comfortable with the exercise of state power will have no moral or philosophical compunction about extracting the data from Anthem against its wishes. But what of conservatives and libertarians who respect private property and distrust the arbitrary exercise of government power? Should we insist that any sharing be voluntary? Or should we compel Anthem to share?

I think there is a case to be made for mandated data sharing on conservative/ libertarian grounds that it can drive market-based reforms of Virginia’s health system. Health care in America is not a market-based system, it is a corporatist system negotiated between the federal government, hospitals, insurers, physicians and pharmaceutical companies. Prices are opaque to the patient-consumer. Accountability is so diffused throughout the system as to be meaningless. Making price and quality data available to the public, formatted in such a way that the public can understand it and act upon it, is essential to creating a market-based system.

But price and quality data are only part of the picture. Virginia has other state-level barriers to a market-based system, including the Certificate of Public Need (COPN), which restricts competition, and state-imposed insurance mandates, which force insurers to offer expensive plans with broad benefits. Price transparency cannot by itself drive the transformation to a competitive, market-based system. But as part of a bundle of reforms including the repeal of COPN and insurance mandates, data sharing could bring about a net gain in freedom, competitiveness and prosperity that would appeal to the conservative conscience.

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22 responses to “The Politics of Big Data”

  1. LarrytheG Avatar

    I think Jim has touched on an exceptionally interesting area worth discussing… goes to the heart of the role of govt.

  2. TooManyTaxes Avatar

    A free market assumes both sellers and buyers have access to appropriate information. A person can go to the grocery store and see price and other information so he/she can decide what to buy and what to leave on the shelf.

    As many have noted, this type of information is not available to the average heath care consumer. But much of this information is known by the other health care consumer — insurance companies. But they have generally not been sharing this information with consumers. Consumers might make better health care decisions with more information (or we might not use the information at all). I don’t see a problem with state government requiring health insurance companies to share certain aggregate information and making it available to the public. That seems consistent with the goals of a more market-oriented approach to health care.

    Even in a free market, where consumers have the choice of grocery stores and individual products, we regulate the trucks that deliver groceries, by safety inspections to ensure their brakes work or controlling traffic with signal lights. Sound, targeted and limited regulation is consistent with a free market economy. But someone also needs to watch the regulators, who are generally prone to expand their kingdoms.

  3. The naïve assumption is being made that once this data is available, government will use the data honestly, fairly, efficiently and properly to help its citizens. What support do you have for such an assumption? None.

    Most likely, the data will be used to protect or help those insurers with the greatest lobbyists and cronies in government. And, of course, it will result in more governmental power and justification for further growth, spending and control.

    If a consumer or sick person gets helped by all this, it will be incidental, not purposeful.

    1. I agree. Look at VPAP. It supposedly provides the transparency that makes unlimited political contributions acceptable. But it doesn’t. Money is donated from Vested Interest #1 to State Senator Snort. Snort is in his fifth term as senator and often runs unopposed. So, why does Snort need the money? He doesn’t but he is secure enough to take the money and still get re-elected. So Snort bundles a bunch of donations into the Senator Snort Virginia Graft Fund and starts making donations from that fund to other politicians. By the second or third laundering of the donation nobody can tell where the money originally came from.

      The answer, of course, is to become the 45th US state with serious restrictions to political contributions. However, the Virginia Way is built on a foundation of theft, deceit and arrogance. The politicians take money from vested interests and thereby steal our democracy, they then deceive the people by claiming that VPAP guarantees effective transparency and the arrogance of the Virginia elite allows this naked corruption to flourish by considering it as part of The Virginia Way.

      When you lie down with dogs you get up with fleas. Until we shoot the corrupt dogs of Richmond we will perpetually have fleas. The idea that the crooks in our state government will publish the health care outcome data in a proper and meaningful manner is preposterous. Our representatives have been bought by the highest bidder and that bidder doesn’t want transparency.

  4. TooManyTaxes Avatar

    As I’ve written many times, a summary of every contact with the government by a paid lobbyist (i.e., anyone in-house or out receiving compensation, including employee or owner compensation), should be reduced in writing and posted on the agency’s website within 48 hours.

    The First Amendment gives us all the right to petition our government, but it doesn’t give us the right to do so without public scrutiny.

    1. Interesting you should say that. I’ve just been pondering this essay in the WP by George Will: It’s about the Supreme Court re-visiting the issue of whether the right of free speech embraces the right to give anonymously in support of that speech — specifically, can the government require disclosure of the names of donors to an organization that engages in political speech? The precedent from the 1950s is no, based on a case that struck down Alabama authorities’ attempt to obtain NAACP donor lists. But the recent kerfuffle over the IRS handling of tax exempt organizations, and now a case from Texas, have put a sometimes different spin on this issue.

      Like TMT, I have always thought the more disclosure the better; even though the average consumer isn’t going to read every label, etc., there are pro-consumer organizations out there that (eventually) will. But John and Don are right, disclosure must be complete and understandable to have any impact, and when it comes to health data, there are a lot of reasons why it won’t be. That said, we have to start somewhere. Aren’t we better off arguing about the lack of FULL disclosure rather than facing a black box? The example of the data coming from our public schools comes to mind.

  5. LarrytheG Avatar

    here’s a question –

    would it be “better” for the free market – and less govt crony corruption if we got rid of food nutrition labels and let each buyer determine for themselves what was in the food of if what was on the voluntary label was truthful?

    how about octane of gasoline?


    existence of poisonous or hazardous substances in products like paint or pesticides, etc?

    do you think govt should be involved in tire safety? medical imaging machines , etc?

    or do ya’ll want to continue the anti-govt blather rants?

  6. LarrytheG Avatar

    what would the govt do with the data?

    here’s an example – give it a try:

    medicare hospital compare

    this information – by the way- has had a huge impact on hospitals…

    people ARE making decisions right now on what hospitals to go to or not…

    here’s another :

    here’s another

    Find and Compare Crash Test Safety Ratings

    College Affordability and Transparency Center

    but there is one thing to be honest about –

    the free market is not about transparency and disclosure – at all.

    the free market – if unregulated – will work exactly as designed and anyone who thinks it was designed to inform consumers and help them make informed choices is smoking some good stuff.

    can the govt fix this completely without flaws and even corruption?

    of course not.

    when you make perfect the enemy of good – even govt “fails” that test.

  7. Larry G never met a government “solution” that he didn’t like. But he always fails to take into account the unintended consequences of whatever you get the gubmint involved in. When those consequences occur, there’s never, historically at least, a way found to correct the problem or go back and start over. Instead, the body politic simply overlays one fix over another over another. They never work and the situation just gets worse and worse. This is not necessarily because gub-mint is evil, though a good case for that can be made with the current crowd; it’s because gub-mint is simply incapable of responding to anything whatever rapidly. That is the beauty, often ignored by the likes of Larry G, of the free market. If something doesn’t work, the free market can respond almost overnight. The same cannot be said for the government.
    So while I will hail everyone on the blog for their good intentions, we all know about the road to Hell.

    1. LarrytheG Avatar

      I’ve met PLENTY I don’t like but the test is are ANY of them perfect and what exactly are the actual real-world alternatives as opposed to ideological theories.

      If another country is accomplishing something will no govt or less govt than us – I’m all for it – but I’m not about to sign up for some bizarro wack-bird theory that has no real working examples on the planet earth.

      “never work” – again – judgement of what “works” in today’s political environment is hilarious.

      take health care. according to our Conservative friends – if govt is involved it “fails”. Never mind that all the worlds advanced economy countries have govt involved in health care and those without govt involved are no place that any faux American libertarian wants to be.

      when I ask to name the best 3 countries in the world for health care that do not have govt involved, what do I get back?


      does anyone with half a brain think that ONLY govt has unintended consequences? really?

      the “free markets” that the likes of Crazy say they want – does very much exist. You’ll find it healthy and vibrant in most every 3rd world country in the world.

      when I ask about that – you know the answer I get ??? THEIR GOVTs are corrupt and don’t protect property rights?


      this country sucks because of govt and the 3rd world countries also suck because of govt?

      good lord!

      I DO GIVE the Heritage folks higher marks – they stand by their beliefs -they actually do publish – a list of the “most free countries”:

      only trouble is – the CrazyJDs say the top 10 are also examples of bad govt… 🙂

    2. LarrytheG Avatar

      Crazy – you show me something that actually works better than govt – and we should adopt it –

      but I’m not into “crazy” theories of which there are no practical examples.

      never understand why we should trash something that works even though flawed and replace it something that is unproven and has no real examples of it working.

      why would we ever do that?

      1. FedEx or UPS vs the united States Postal Service. If it were legal for private companies to put things in your ail box – the USPS would have evaporated 25 years ago.

        1. LarrytheG Avatar

          why should FedEx or UPS not pay for their own mailboxes?

          or more to the point – what is keeping them from doing that?

          you can send a letter by UPS/Fed Ex right now – it’ll cost you $5-10 .

          you think those prices will put the USPS out of business?


  8. LarrytheG Avatar

    from a fiscal conservative standard – apart from ideological pain and suffering – one would ask – as Jim has – would the use of big data – save money – both for citizens and taxpayers?

    If the answer is it likely will – then one would ask – is it something the private sector ought to be doing without govt …

    and yes – there are such things -like ANSI standards, AASHTO standards, and many others…

    then the issue is who should pay – because the private sector does not print money – any costs it incurs – it recovers in the products and services it sells – HOWEVER – if that paid-for service actually reduces costs in other areas – then it’s truly an investment with a real ROI.

    But make no mistake – the private sector will not necessarily seek services that help consumers save money if they perceive it to be not a profitable proposition for them.

    I think someone said something about fraud.

    Much, much worse than fraud is mistakes made as a result of one person receiving medical care – from multiple providers – each of whom do not know what the others are doing unless the patient “remembers” and tells them.

    So stupid and expensive stuff happens – when contraindicated drugs are prescribes, duplicative tests ordered, and prior medical history not accessed.

    yet the industry has argued against electronic medical records – no matter whether the govt is involved – or not.

    anyone who has had to go to multiple doctors know the frustration of having highly educated medical providers – making decisions while not knowing all the facts for you – your medical history – your other doctors treatment notes, any problems you had in the past. None of that is available unless your paper record is laboriously gone through and selected pages copied and faxed… yes ..faxed…

    Finally – Medicare, MedicAid and other programs already collect a lot of this data. Medicare actually has built and provides big-data databases that have caused hospitals and other providers to pay far more attention to their care than they did before – and that’s GOOD.

    the one segment of society that is not benefits from this big data approach are the folks that don’t use Medicare or MedicAid (or the VA).

    and yet – despite the fact that this is already the practice – the argument here is what? that the govt is too incompetent and/or corrupt to do this – and so – we do nothing?


    and if we ask this uncomfortable question about “doing nothing” – that makes the questioner a big-govt advocate?


    this is how STUPID our politics have gotten.

    the test is no longer about – do we get real benefits – fiscal benefits from doing something…

    Nope – the test is – if govt is to be involved in it – then it’s a bad thing from the get go.

    So Jim ends up writing such a thing – in a totally tentative way – as if he KNOWs if there is more than a hint of approval – that he will be set upon by the anti-govt torch and pitchfork crowd and accused of being a RINO!


    1. “But make no mistake – the private sector will not necessarily seek services that help consumers save money if they perceive it to be not a profitable proposition for them.”

      Socialist thinking.

      The private sector is not an entity. It is an ecosystem of companies. When there is effective competition in the ecosystem the cost of goods falls. Witness computers or cell phones. The lack of effective competition is usually the result of intentional crony capitalistic legislation by bought and paid for politicians. Why can’t you buy a car from the manufacturer over the internet? Why can’t a restaurant buy wine directly from a winery? Why does the state of Virginia monopolize retail liquor sales?

      You are being robbed by the government every day LarrytheG – you are just not able to see it.

      1. People are going to look back on this era of communications revolution on revolution and, I suspect, conclude that the only reason the government didn’t screw it up is because things moved too fast for the crony capitalists’ political allies to design and build “protected” sandboxes before what they contained was rendered obsolete by yet another innovation. Unfortunately the politicians have had centuries to learn how to regulate alcohol to their own advantage.

        But I’m not a pure libertarian here. Effective business competition does require effective government. Not only to keep people and the nation safe, and provide a social safety net, and criminal justice, but also to provide necessary stability to the economic system through civil adjudication, a regulated monetary system, access to transportation, and such constraints as fraud and intellectual property laws, anti-trust and the regulation of “natural monopolies,” and requirements for public safety. It seems to me the disclosure of food and drug ingredients and consistent labeling of these falls squarely in the latter category. The government doesn’t always get it right but it’s better that they try than leave it to the Wizard of Oz.

        But disclosure of financial data? That’s a much tougher call, one that the SEC has wrestled with more than any other body I can think of. How balance disclosure to shareholders and customers against non-disclosure to competitors?

        For politicians there is much more room for subjective judgment, and abuse on behalf of cronies, in the keeping of secrets than in requiring disclosure. For a business owner, knowing how someone else is doing business may help the competition but doesn’t guarantee success. I’d rather we err on the side of disclosure.

      2. LarrytheG Avatar

        the private sector IS an ecosystem and they seek what is in THEIR interests – NOT the consumer’s .

        This is the well documented HISTORY of the unfettered free market – long before those nasty regulations were implemented.

  9. LarrytheG Avatar

    re: ” Effective business competition does require effective government”


  10. LarrytheG Avatar

    One of the original forms of Big Data is long lost on most folks.

    and it’s ALL US GOVT and it has powered just about every service and product ever provided in the economy.

    It’s the Census – combined with zip code info – sliced and diced down to the carrier route (neighborhood) level.

    Walmart knows precisely where every store should go.

    The US Armed forces knows where to put the recruiting centers.

    Doctors know where to put their practices.

    Candidates for office know where to send their campaign material… tailored to demographics.

    here’s the question – is there a way this could have been done without government?

  11. LarrytheG Avatar

    re: ” But disclosure of financial data? That’s a much tougher call, one that the SEC has wrestled with more than any other body I can think of. How balance disclosure to shareholders and customers against non-disclosure to competitors?”

    and now we know the Va PPTA issue in Va, eh?

  12. LarrytheG Avatar

    I’m NOT in favor of the Govt or am I opposed to the free market.

    I’m in favor for as much free market – as people want –

    that they TRULY want – once they realize what they are taking for granted that the govt is providing… in terms of a framework for commerce.

    Jim wants ROI for roads. I do too. How does Jim calculate ROI for the govt taking your land to provide roads for others?

    If I could take your land for something I want to do – merely by providing you with it’s fair value – is that okay?

    Jim’s call for ROI for transit, rail and roads – is absent for pipelines and powerlines….. mercury pollution from powerplants… stormwater runoff into the Chesapeake Bay –

    so my question to folks who say they want the free market –

    do you support the govt taking people’s land for others to benefit from?

    is that a core libertarian principle?

    Crazy? how about you?

  13. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Variant tactics of the Leviathan State.

    The BOA tactics –

    – Seek, find and encircle, then squeeze to control and gain succor.

    The Pistil Pedal Tactics –

    – Attract, entertain, and transact.

    Delaware is a small state, resource poor, one easy to avoid. It deploys Pistil Pedal Tactics. Maryland is a larger state centrally located. It deploys BOA tactics. For cultural and geographic reasons Virginia is in between.

    Hence Virginia Sales tax varies from 4.3% to 6% depending on locality.

    Maryland’s Sales tax is 6%. This is the result of Gov. Martin O’Malley pushing through the largest tax increase in Maryland history in 2008.

    Delaware’s sales tax is zero (0%).


    Lets drive the Delmarva Peninsula via Route 13. We’ll go from the Virginia Capes at the mouth of the Chesapeake to Newark Delaware just south of Wilmington Delaware. Route 13 use to be a Blue Highway, magical. The road passed through ocean capes and seascapes, inlets and tidal rivers, bay waters and marshes, all laced into loam rich farmlands speckled with rock solid historic towns, flanked by the Atlantic and Chesapeake.

    These bountiful God gifted places were called the Land Of Pleasant Living. Places blessed with historic churches and courthouses and homes – brick and clapboard – amid farm lands owned by families for generations or clustered round town squares and circles going back generations too, often to times that were long before the American Revolution.

    James Michener, always entranced by places like these the world over, wrote about this place in the 1970s, called his book Chesapeake. Rivers and inlets with beautiful swimmers laced these timeless places and still do to this day too. And it’s still a Land Of Pleasant living in many of these places still.

    But if James Michener joined us for our trip up Route 13 today I suspect he’d be very surprised. Today’s scene out the car window along Route 13 is startling different from his time. Too many places outside that car window today are dying. Their history. Their farms. Their villages and towns. Their families. Their communities, their prosperity, their health, are dying.

    The dying is going on in many different ways, for many different reasons.

    But growth is not the reason for the dying. Nor is change. Nor are the migrations. But things are sick and dying nevertheless, in many places. But most particularly in Maryland. There you can see it most plainly out the window when passing by the farmlands and through the towns. The decay and building of a nowhere place going today, but with a cruel twist.

    Most particularly you see it in the border lands of Maryland east of Rt. 13.

    But old Rt. 13 has died too, and so is new Rt. 13 dying but differently now. It’s a no where place. A busy busy busy place going no where really. A no where place that is sucking the life, health, and vitality from most everything around it.

    Google Federalsburg, Maryland. Check its demographics on Wikipedia. Check the Map – see how Route 13 in Delaware parallels the Maryland line from more that a 100 mile going north to Newark. There, far out in the country on that country road, you can shop for furniture all day in a single outlet store. That store is more than 180, 000 square feet. That is four acres of store on a country road that is sucking the life, wealth and health out of families and most everyone else trying to live and thrive in Frederalsburg, Md.

    Sale tax at zero versus 6%. The Md. code says Maryland residents pay Md. sale tax on stuff brought out of state if that stuff bought out of state is used in Maryland. Oh really. If that works for all involved in Maryland it sure don’t look like it out the window. No, Maryland looks to be dying out there instead.

    Meanwhile, like the old saying goes: the rich get richer, the poor get poorer. And now apparently not only are the poor getting poorer they are also getting sicker, in body and spirit. You can see it out the car window.

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