Smarter Decisions, Better Results Through Analytics
by Ginger Campbell, Pharmacy Benefit Consultant
A recent survey of 600 blue chip employers found senior management teams make more effective decisions when using forward looking analytics. This same discipline is required to control exploding healthcare costs which are unsustainable and highlight the need for access to effective analytics to address the core issues.
So what are analytics? Analytics and reporting are different but analytics involve an element of reporting. Traditional retrospective reports organized in chart or table formats only answer questions of 'what and how much'. Analytics are all about uncovering the areas of opportunity and root causes of problems. Analytics deal with the more important questions of 'how and why'. Analytics attempt to explain why things happen. Analytics lead to actionable results and set a direction towards a resolution or solution.
Traditionally, healthcare organizations have used analytics for predictive modeling, to set rates, and to identify individuals for chronic-care management. New approaches to the use of analytics now include financial and clinical algorithms, allowing healthcare organizations to implement advanced methods to identify, manage, and measure risk within a population. Contrast this with most employers that struggle to get claims data from their plan administrator. They have little choice but to base decisions on what has happened as opposed to what is likely to happen as predicted by forward looking analytic based tools. This is precisely why blue chip senior executives are embracing today's emerging analytic offerings.
Let's look at one example of how analytics are used within the employee benefit industry. In anticipation of the healthcare reform legislation severely limiting cost shifting to plan members, BancorpSouth Insurance realized their clients needed to receive their claims data in a manner allowing them to better understand problem areas within their plan to better identify what areas needed targeting. Traditional reporting would have provided a lot of information but offered little real actionable value to employers. BancorpSouth recognized their clients needed:
- The ability to integrate healthcare claims data from multiple vendor sources for one true picture of plan experience
- Strategic executive scorecards and dashboards to target and manage key performance drivers
- 24/7 email alerts when drivers of cost are hit
- Flexibility to customize dashboards, metrics, and reports to meet each client's needs.
- The ability to collaborate with other members of the benefits team through email sharing of reports.
BancorpSouth Insurance now uses analytics to manage their client's health plans to control costs and bend or slow trend.
Managing benefits is hard enough. Employers will find that access to analytics allows a plan sponsor to:
- Get at the root cause of costs
- Forecast projected cost increases
- Initiate health focused programs providing incentives
- Track the effectiveness of these programs
- Use sophisticated benefit modeling tools using a groups own data to focus on health and wellness.
Analytics will begin to play a large role in making plan participants accountable for their own health. Using analytics, employers can hone in on which intervention programs are needed and which members have care gaps, then adjust health coverage accordingly. Plan participants who choose not to participate in these programs or refuse to comply with recommended treatment could be assessed larger out-of-pocket costs.
When a change in vendors takes place, an integrated analytic reporting tool provides consistency in understanding and interpreting the experience of the prior vendor with the new one. This is only possible with the use of a reporting tool with consistent analytics.
As you consider ways to improve the performance of your team or employee benefit plan, take a tip from many of the nation's top senior managers. Look for ways to integrate the use of forward looking analytics tools in your company.
Ginger Campbell began her pharmacy benefit career with Express Scripts in 1989 where she learned to analyze pharmacy data to help self-funded employers control their rising pharmacy costs. Since 2001, she has worked as a pharmacy benefit consultant with Wright & Percy and BancorpSouth Insurance. With the growth in pharmacy benefit costs, she has expanded her consulting practice to include medical claims analysis as pharmacy claims now greatly impact medical claims i.e. case management. Ginger is a pioneer in using analytics in benefit analysis. She serves in a leadership role at BancorpSouth Insurance in implementing an analytics platform for self-funded employer groups.