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Supreme Court Limits Healthcare Databases

Healthcare costs have been on the rise for decades. Average premium costs have risen about 8% in the last two years alone. To reduce costs and improve the health care system, 18 states have created laws requiring health insurance companies to report data about the type of care provided by insurance companies and the cost of that care. But a recent decision by the Supreme Court in Gobeille v. Liberty Mutual will force states to change tactics.

The case revolves around an insurance company that refused to comply with a state’s request for information. Liberty Mutual, the company that provides self-insurance plans (those paid for directly by companies), claimed that the Employee Retirement Income Security Act (ERISA) protects the company from the hassle of complying with individual state requirements. Vermont, the state asking for information, believed it had the right to collect insurance data for a statewide database that could help policy makers understand and improve healthcare cost trends.

In a 6-2 decision, the Supreme Court affirmed the Second Circuit Appeals court original decision and sided with Liberty Mutual.

Justice Ginsburg wrote the joint dissent with Justice Sotomayor, and argued that requiring health care companies to report information directly to states does not go against the ERISA. Justice Ginsburg also argued that affirming the court’s decision essentially forces states to depend on the whims of a federal agency, specifically the Department of Labor. The DOL would have to both willingly choose to ask companies to provide healthcare information and would have to choose to share that information with the states.

Currently, the Department of Labor does not collect the type of data Vermont requested.

Before the decision, eighteen states had or were creating databases to collect data from health care companies. States wanted information on heath care spending and what services were used, along with information about patient demographics, diagnoses, and procedure costs. Critics of the decision say that this information could have helped states get a clearer picture of local health care systems.

The Obama Administration had supported Vermont.

Most policy groups agree that the most important step states can take to improve health care is simply gathering more information about heath care services, providers, and prices inside the state. The decision by the Supreme Court will make it more difficult for states to get the information they need.

Health care cannot improve in the states until important data becomes available. Health care data might show states that a drug or treatment is being overcharged, or that one group of citizens is being marginalized in the health care system, or that diagnoses for one condition have spiked.

Private insurance companies can still voluntarily submit data to state databases, though that is unlikely to happen. States will need to find new ways to acquire this important information that will improve care for patients.

About the Author

Charles GilmanCharles Gilman
Charles Gilman

As managing partner and co-founder of Gilman & Bedigian, it is my mission to help our clients recover and get their lives back on track. I strongly believe that every person who is injured by a wrongful act deserves compensation, and I will do my utmost to bring recompense to those who need and deserve it.


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