For over a decade, California lawmakers have tried to establish a comprehensive resource on health care costs. Yet a dearth of information still persists among consumers, purchasers, and policymakers. To address this problem, recent legislation allocated $60 million to develop a health care payments database (HPD) for the state. The California Office of Statewide Health Planning and Development (OSHPD) and a stakeholder review committee have held monthly public meetings since March 2019 to guide development.

PPIC is supporting the effort in key ways, in part by describing how an HPD can answer important questions and inform policy decisions. At the November 21 OSHPD Healthcare Payments Data Review Committee, we presented research scenarios that highlight issues facing California policymakers:

How often do patients overpay for prescription drugs?
How does increasing consolidation of health care providers (i.e., hospitals acquiring physician practices) impact costs, quality, and patient outcomes?
What types of housing interventions are most effective for low-income Californians with severe mental illness?
How often do children transition between different types of health insurance coverage and how does it impact their use of preventive services?

We will release our detailed findings in February – including full results from our online survey of California researchers experienced with health care payments data. A sneak peek indicates that these researchers are very enthusiastic about an HPD. Nearly all 50 respondents reported they would likely submit proposals to use the database to investigate topics including: how health care policies impact health outcomes, implications of racial/ethnic disparities and the social determinants of health, as well as health care costs and usage patterns. Researchers also indicated willingness to pay user fees to access the data—an important consideration given that the HPD must be self-sustaining (i.e., not require General Fund support) once in operation.

Several other states operate health care payment databases (often called an All Payer Claims Database or APCD) that support health policy and practice, along with patient decision making. On Colorado’s database, the public can search for prices of common health care services—such as breast biopsies and ultrasounds—across different providers. It also documents how health conditions (i.e., asthma and diabetes) vary over time and across regions, types of insurance, and age groups.

For California’s HPD to be realized, the legislature must act on recommendations from OSHPD and the HPD review committee, due in July 2020. While many hurdles still remain before a California HPD is in operation, substantial investments to support current efforts signal a commitment from the state and stakeholders. By creating the database, the state gains a crucial resource to support evidence-based policymaking. Along with parallel efforts—including the development of a longitudinal database to track student and employment outcomes—California can be one step closer to having the right data to study the state’s most pressing policy issues.