Arnold Milstein says the federal government already has health payment information that could help insurers improve physician efficiency.

The Centers for Medicare and Medicaid could generate some savings immediately and more savings over time simply by offering private insurers or their consulting firms access to the full Medicare claims database in a “beneficiary-anonymized” format, Milstein says in a written statement submitted to the congressional Joint Economic Committee.

Milstein testified today at a committee hearing on health information tools.

Milstein emphasizes the importance of looking at the “all-in cost” of treating an episode of acute illness, such as a broken leg, or a year of a chronic illness such as diabetes.

The all-in cost includes the cost of drugs, imaging studies, lab tests, specialist consultations and hospitalizations as well as a physician’s fees, Milstein says.

Even after adjusting for the differences in the mix and severity of patients treated, one physician may generate twice as much in all-in costs as a second physician in the same specialty in the same community, Milstein says.

Major efforts to use all-in cost figures to shape provider networks seem to have held down health plan medical costs by amounts ranging from 2% to 17%, Milstein reports.

But Milstein says insurers are having trouble using all-in cost figures because a typical insurer may have a meaningful amount of data for only a small percentage of the doctors in a given community.

Milstein predicts that the long-term gains from private use of CMS claims data would be more important than the short-term gains.

The power of use of the CMS data “lies in the motivational power of performance transparency in any industry, including the physician services industry, to propel continuous gains in affordability and quality, once consumers and/or prices begin to favor better, faster, leaner providers,” Milstein says.

A link to a copy of Milstein’s written testimony is on the Web at Document Link