Analytics Gets to the Root of Your Employee Benefit Cost Drivers

You take great stock in the phrase, “You can’t manage what you don’t measure.” You establish key performance indicators and create reports to monitor your progress. Measuring is a key first step to understanding what you need to fix. But to make impactful change, you need to know more than reporting tells you. You need analytics.

Analysis versus Reporting

Most people use the words reporting and analysis synonymously, but they mean very different things. In his book, Taming the Big Data Tidal Wave: Finding Opportunities in Huge Data Streams with Advanced Analytics, Bill Frank explains the difference:

To make impactful change, you need to know more than reporting tells you. You need analytics.
Reporting Analysis
Provides data Provides answers
Provides what is asked for Provides what is needed
Is typically standardized Is typically customized
Does not involve a person Involves a person
Is fairly inflexible Is extremely flexible

To expand on Frank’s concept, a report or dashboard is a static document that represents a moment in time. It answers a question, telling you what happened in that moment. Think of it as an early warning system alerting you that something needs attention. It gives you a heads up, but it doesn’t tell you what to do. For that, you need to understand why it happened. That requires analytics.

Analysis involves an expert mining the data to identify the causes of what happened. This analysis provides insight you can use to act, so you aren’t blindly making decisions based solely on what happened.

Benefits of Integrated Analytics

Here’s an example to make the point clear and relevant to your benefits program.

You get a carrier report that identifies the 10 costliest conditions your members are being treated for. You can see what conditions are driving your healthcare claims costs, but you have no idea what to do to effect change. To understand why these conditions are costing you so much, you need more information. You discover that critical information from further analysis.

An analytics expert can dig deep into your data to identify the root causes of your members’ health conditions. The more data sources you have available to mine, the more complete the picture you get will be. By integrating medical, Rx, wellness, and biometrics data sets from your different vendors, you can pinpoint the real problems you need to address, such as:

  • Obesity
  • Tobacco use
  • Lack of adherence to medication regimes
  • Multiple chronic conditions
  • Site of care cost variances.

If you include workers’ compensation, disability, safety, and absenteeism data, you can get even more insight into the real costs of these conditions on your bottom line. You could find that:

  • These members have been on disability more frequently than employees without these conditions.
  • Employees with these conditions are involved in more workplace accidents and they spend more time on workers compensation that healthier counterparts.
  • The absenteeism rate for these members is higher than for other employees, which negatively impacts productivity.
Top Ten Costliest Conditions Example
1. Neoplasms
2. Diseases of the musculoskeletal system and connective tissue
3. Diseases of the circulatory system
4. Symptoms; signs; and ill-defined conditions and factors influencing health status
5. Diseases of the digestive system
6. Injury and poisoning
7. Diseases of the nervous system and sense organs
8. Diseases of the genitourinary system
9. Diseases of the respiratory system
10. Mental Illness

You can use this insight to launch or promote an existing wellness program, add coverage of tobacco cessation programs and tools to your benefits programs, and educate employees about less costly site of care options, such as receiving infusion therapy in-home or at a doctor’s office instead of the hospital.

Choosing a Healthcare Analytics Vendor

I’ve covered this topic in a previous blog, so I won’t go into detail here. But I hope you’ll choose an analytics vendor that allows you to integrate all your benefits data and provides analytic support. You and your advisor need to get to the root causes of the issues in your population to be able to design interventions and programs that affectively address your costs drivers and improve your company’s bottom line.

Adapted based on graphic from Reporting vs. Analysis: What’s the Difference?
Sashi Segu

Sashi Segu

Sashi Segu, Counsel, has participated in cases and provided legal expertise on HIPAA, ERISA, privacy, compliance, and other healthcare-related fields. Sashi left Innovu in March 2019 to pursue other interests.

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