Claims data versus state encounter data: Demystifying healthcare analytics

When it comes to analyzing the healthcare market, there’s nothing more important than having data that is accurate, relevant, and complete. The right healthcare commercial intelligence can empower any healthcare organization focused on driving growth and expanding market presence while maintaining high-quality care.

While this is all well and good, knowing what data to look for and why it’s valuable is a crucial first step that many organizations find challenging.

Healthcare providers use two primary sources of data: all-payor claims data and state data. Each type is valuable and has useful applications for organizations looking to better understand the market, develop more effective strategies, stay ahead of trends, and much more.

If you’re wondering which type of data is the best for your needs, this blog is for you. We’ll explain and compare claims data to state data and discuss the importance of each type of intelligence.

Where does the data come from?

First, let’s assess the typical source of each type of data.

All-payor claims data

All-payor claims data, also known as adjudicated claims data, refers to information generated through evaluating healthcare insurance claims. When a healthcare service is provided, the provider submits a claim to the insurance company for reimbursement. Adjudication is the process by which the insurance company reviews the claim, verifies the services provided, determines the covered amount, and decides on payment or denial.

This type of claims data is typically passed electronically from providers to payors through middlemen known as clearinghouses. These institutions usually screen and clean medical claims data of errors and inaccuracies before transmitting them to payors.

Adjudicated claims data may include:

• A patient’s name, age, and sex
• Provider information such as the name, address, and specialty
• Dates of service
• Procedure or service codes (CPT or ICD codes)
• Payment information

State encounter data

Healthcare encounter data is the information documented by healthcare providers that include both the clinical conditions they diagnose as well as the services and items rendered to treat that condition. The Centers for Medicare & Medicaid Services (CMS) began using encounter data in 2015 to calculate provider payments, and reliance on this data has only increased since.

States use this kind of data for a variety of purposes, including evaluating the performance of managed care organizations (MCOs) and determining needed changes and improvements to health-related programs. Encounter data is also commonly used to provide detailed reports to the public on Medicaid services provided through MCOs and their costs.

How does claims data compare to encounter data?

Now that we know where all-payor claims and encounter data come from and what each type includes let’s see how each compares for different use cases.

Measuring volumes and utilization

All-payor medical claims data allows for a more granular and focused view of the healthcare market. Whereas encounter data provides a broad overview of hospital and inpatient market trends, commercial claims offer insights at the patient level across multiple different care settings.

Inclusions and exclusions

All-payor claims data includes information from all types of healthcare organizations and providers, including physician practices. For example, Definitive Healthcare offers healthcare commercial intelligence on hospitals and health systems, physician groups, ambulatory surgery centers, long-term care facilities, accountable care organizations, and more.

Encounter data, however, is usually limited to the hospitals and health systems required to submit data to the state.

Types of analysis

Healthcare organizations can use commercial claims data to explore claims share, market size and utilization, procedure volumes, referral pattern analysis, and more.

Encounter data is mainly used to explore inpatient-related metrics like market share and size, hospital utilization, and volume analysis.

It’s important to note that companies leveraging all-payor claims data or encounter data will be accessing de-identified information, meaning that each data point has enough personally identifiable information removed or obscured so that what's remaining cannot identify an individual. To navigate through this complex web of facilities, organizations, and people, Definitive Healthcare appends the Definitive ID to every player across the healthcare ecosystem, helping you map out industry relationships and inform commercialization strategies.

Which type of data is better?

The truth is that all-payor medical claims data and state data are both helpful when analyzing the healthcare market. For a more robust and complete picture of the industry, we encourage you to use both types of data.

Here are some examples that illustrate how each type of data offers different—but valuable—perspectives.

Market share or claims share

As described earlier, one of the primary differences between all-payor claims data and state encounter data is the level of granularity one type of data provides over the other. When it comes to determining the position of a given organization in the market, each type of data offers specific advantages and drawbacks.

State data, for example, provides a more holistic view of inpatient market share across hospitals and health systems than medical claims information. This includes information on all types of diagnosis and procedure volumes regardless of payor.

All-payor claims data, on the other hand, offers deeper insights into the outpatient market. Organizations can analyze healthcare professionals and organizations’ activity and claims volumes across various settings of care. This data from these types of facilities often does not have to be submitted to the state, so companies may find their perspective on the market incomplete if they solely rely on state data.

Which providers are sharing patients and how often are patients staying in my network?

Claims data can help you track the full patient journey by offering insight into referral and utilization patterns, whether among a specific patient cohort, within a geographic region, or your competitors’ networks. Referral pattern data is a powerful tool that can help facilities improve in areas such as:

• Patient engagement
• Patient leakage
• Healthcare costs
• Time to diagnosis
• Patient outcomes

In addition, all-payor claims data allows organizations to perform robust, longitudinal studies that draw connections between providers and patients. Armed with this intelligence, organizations can dig into overarching trends in the market, reduce outmigration, and engage the right consumers and providers.

State data, however, offers a narrower understanding of patient referral patterns as this information is limited to inpatient care settings. While organizations can gain insights into which physicians see which patients, it’s unlikely they will have a picture of referral activity.

How do my providers compare to other providers?

With all-payor claims data, organizations can make comprehensive comparisons at multiple levels. For example, a hospital can benchmark its performance against similar facilities in its county, state, region, or even nationwide. The hospital could also analyze performance across specific service lines or procedure codes. And alongside certain clinical, financial, and quality metrics, providers can identify areas of improvement and opportunities for growth.

For organizations that operate beyond the borders of a single state, encounter data may not be as valuable for comparative analysis. This is because each state has different reporting requirements and may produce different reports at different cadences—so it may be difficult to hunt for the data and blend any insights gained together.

The solution for better market analysis? Use both!

Ultimately, your healthcare market analysis will be greatly enhanced when complemented by both all-payor medical claims data and encounter data.

While state data tends to be used more widely for inpatient market share and utilization statistics, claims data often offers better insights into overall market activity, including referral pattern analyses and benchmarking. Weaving together both types of data can result in a more comprehensive market analysis, which can help drive your organization’s growth, improve network integrity, and address any other pressing need.

Interested in learning more about the Atlas Dataset and how our healthcare commercial intelligence can help grow your business? Start a free trial today.