• Using medical claims to drive down health care costs

    Posted on November 12, 2011 by in health costs, health data

    Some companies are using medical claims data to drive down escalating health care costs for employers. How exactly are they doing this?

    Oftentimes, at first, medical data warehouse vendors like MDI (Ponte Vedra, FL) or Ingenix (Eden Prairie, MN) collect employee medical claims data from insurance carriers and pharmacy benefit managers. The vendor matches the claims to the employee, assigns a random unique identifier if the employer wishes, and can run a variety of reports. Employers learn about employee population health risks and medical and pharmaceutical utilization rates from these reports. Reports can be broad (number of outpatient visits) or specific (number of diabetes patients who received a hemoglobin A1c test).

    Armed with company specific data, large health information companies like Ingenix or smaller consulting firms can then analyze and benchmark utilization trends and health risks and develop strategies to eliminate unnecessary costs while lowering health risks. These strategies include designing workplace health promotion programs and preventive services insurance benefits. The claims data intelligence enables us to better tailor health education, programs and benefits. If, for example, the employee population has a high risk of developing high cholesterol and has a 25% smoking rate, the company could start on on-site cholesterol screening and implement a smoking cessation program as a strategy to decrease heart attack and stroke risk.

    There are several cost transparency companies also using claims data to help reduce medical costs for employers. Some companies in this space include change:healthcare and HealthCare Bluebook (both located in Brentwood, TN) and CastLight Health (San Francisco, CA). These solution providers offer consumer-friendly price and quality information to help individuals make better health care decisions. In addition to providing relevant cost information, transparency companies use claims data to measure the impact of their tools on medical costs for employers.

    The next challenge employers have in using medical claims data and cost transparency solutions is achieving program participation from employees. My next blog post will discuss effective incentive design for participation, adherence and overall engagement in healthy behaviors.

    (First published at chicagohealthtech.org)

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