Big Data and Reducing Healthcare Waste
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Transcript of Big Data and Reducing Healthcare Waste
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“Big Data”: A Pathway to Human Capital Risk Management and Healthcare Waste ReductionA Presentation to the Texas Business Group on Health
August 2015
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About the Speaker
Justin SchanemanVP of Data AnalyticsHCMS Group
HCMS is a rapidly-growing independent health information technology company that provides cloud-based healthcare reform solutions to health organizations and employers.
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Why We Need “Big Data” Analytics?
30|30 10|2
5|50
The US spends 30% more on healthcare compared with similar countries and gets 30% less in health return.
Benefit costs are increasing annually at roughly 10%, while wages are increasing by 2%.
• 5% of people incur 50% of healthcare costs.
• Only 50% of costs in the 5% group is driven by disease. The other 50% is driven by business policy design.
The Healthcare Waste Problem The Lost Wages Problem
The Overtreatment & Incentives Alignment Problem
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The HCMS Group “Big Data” ModelHuman Capital & Health Benefits Data Aggregation
Compensation
Records
Workforce Transition Episodes
Work Performance Records
Disability & Lost-Time
Claims
People &Policies Safety &
Workers’ Comp Claims
Health Programs
& Providers
Health PlanClaims
Management
& Training Records
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The Power of “Big Data”Supporting Population Health Management
Information
KnowledgeDecisions
Data
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Risk Scoring and Stratification
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Risk Scoring
A major advantage of “Big Data” aggregation is to support population and individual risk scoring.
1) Allows for easy benchmarking to other companies.
2) Corrects for the selection-bias issue, providing an “apples-to-apples” comparison between groups.
3) Gives Health Programs and Health Providers better information.
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Human Capital Risk Index (HUI)
The HUI is weighted by 300 plus variables from the following: Clinical diagnostic and patterns of
utilization from medical claims
Pharmacy classes and patterns of utilization from pharmacy claims
Short-term and long-term disability claims information
Workers’ compensation claims information
The HUI® is a comprehensive, person-centric risk score produced from “Big Data” and is closely correlated with health benefits cost and used in Advanced Data Analytics. It is indexed to 1.0 and higher numbers represent higher risk.
Example HUI Calculation
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The Limitations of Self-Report Data
Bottom 95% of population
health
Top 5% of population
health driving over 50% of health costs
Average Individual Integrated Cost $2,383 $40,729Human Capital Risk Index (HUI) 0.86 4.06Health Risk Assessment (HRA) Self-Report Risk Score
90.3 89.5
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0.5
1.4
2.8
5.2
0.0
1.0
2.0
3.0
4.0
5.0
6.0
0
200
400
600
800
1,000
1,200
50% 30% 15% 5%
Average HUI Score
Popu
latio
n
Percent of Population
Average HUI = 1.3
$465
$2,987
$11,927
$61,751
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
0
200
400
600
800
1,000
1,200
50% 30% 15% 5%
Average Medical Cost
Popu
latio
n
Percent of Population
Average Cost = $5,987
5% of people drive over 50%
of costs
HUI risk is predictive of cost
= Population = Population= Cost = HUI
Population Risk Analysis by Cost and HUI Risk
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Risky overutilization of medications, testing, and specialists. Poor access & utilization of primary medical care &
prevention. Significant utilization of lost-time and workers’
compensation benefits. Typically at out-of-pocket maximum, so utilization is free.
5% of people driving over 50% of costs
$People
The 5% Problem
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Sample 5% Patient Risk Profile
Example HUI ProfileHUI Risk Score 10.30HUI Trend UpPercent Medical 74.4%Percent Drug 5.2%Percent Occupational Lost Time 8.3%Percent Non-Occupational Lost Time
12.0%
Health Program Participant NoClinical assessment: High risk score Presence of lost-time Likely impact to work performance Significant medical costs, and likely to go up
further Member of the 5%
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Right service to the right person at the right time
WasteSpecialty Care & Prescription
Drug Cost
Person-Centric
Primary Care & Prevention
Health As Human Capital
Cost Savings & Resource for Worker
Wages
Population Risk Management Model
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“Big Data” Analytics in Action
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Modifiable Waste
A combination of medical and prescription drug over-treatment and misaligned health and lost-time incentives produce significant but manageable waste.
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Healthcare ReformProblem Identification – Excise Tax Trend
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Healthcare ReformAction
Funded HRA Health AccountEncourages ownership of health spending while limiting deductible exposure.
High(er) Deductible
Primary Care / Prevention CoverageExpanded 1st dollar coverage
Strategic Co-Insurance / OOP IncentivesReinforces utilization of prevention services and primary care.
Wellness Program Participation Incentives
5% Clinical Prevention Service
Prior Offerings New Plan
HMO #1
HMO #2
PPO
HMO #3
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Healthcare ReformOutcomes Measurement
20%
-3%
-22%
-7%
-12%
-11%
-30% -20% -10% 0% 10% 20% 30%
Primary Office Visits per Member (HUI>1)
Brand Medication Cost (Plan Paid)
Brand Medication Fills
Specialty Office Visits
ER Visits
Inpatient Days
Percent Change After Healthcare Reform
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Plan Design Modeling
0%1%2%3%4%5%6%7%8%9%
0% 20% 40% 60% 80% 100%
Like
lihoo
d of
STD
Cla
im
STD Wage Replacement Percent
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Total Absence Analysis
STD LTD Workers'Comp Vacation Sick Leave FMLA
Operations 1,077 1.54 0.60 0.07 15.22 4.41 2.84Marketing & Sales 1,006 0.22 0.25 0.01 13.32 2.45 1.85Human Resources 972 1.22 0.60 0.03 13.66 4.47 2.95Administrative 911 1.03 0.35 0.02 14.17 3.74 2.94Executive 748 1.45 1.39 0.01 12.15 3.45 3.60
Total 4,714 1.08 0.60 0.03 13.80 3.72 2.79
Days per EmployeeOrganizational Unit Employees
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Chronic Disease Cost andPrescription Drug Adherence Analysis
PopulationTotal Health Plan Costs
Year 1 Year 2 Change PercentChange
Type-II Diabetes Cohort $5,411 $6,121 $711 13.1%Comparison Group $2,028 $2,303 $275 13.6%Total $2,250 $2,554 $304 13.5%
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76%70%
66%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
HDHP HMO PPO
Empl
oyee
Eng
agem
ent
(Per
cent
Fav
orab
le)
Employee Engagementby Health Plan Option
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Disability Days per Employeeby Health Plan Option
1.4
3.3
6.0
0
1
2
3
4
5
6
7
HDHP HMO PPO
Annu
al D
isab
ility
Day
s Lo
st P
er
Empl
oyee
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Health Benefits Cost of Turnover
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Hospital Performance Analysis
HOSPITAL Average
Individual Cost
Average Individual HUI Risk Score
Average Cost per
Unit of Risk
1 $16,450 3.73 $4,404 2 $13,080 2.73 $4,784 3 $16,587 3.13 $5,303 4 $22,388 3.28 $6,831 5 $22,580 2.72 $8,292 6 $21,588 2.43 $8,870 7 $39,420 3.60 $10,936 8 $51,615 4.39 $11,765 9 $75,726 6.25 $12,120
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Learn More
Visit Our Website www.hcmsgroup.com
Subscribe to Our Blogwww.hcmsgroup.com/blogs
Visit Us on LinkedInhttps://www.linkedin.com/company/hcms-group
Follow Us on Twitterhttps://twitter.com/hcmsgroup