Information of Value: Analyzing Health Claims Data

 Keenan Blog

Information of Value: Analyzing Health Claims Data

November 30, 2021
  • Data analytics is the key to unlocking deep insights to developing plans that best serve both employees and the organization.
  • Evaluating data using analytics enables us to examine the results of health plan utilization at different levels.
  • Looking at claims data on a deeper level is essential for truly bending the cost curve in ways cost-shifting to employees cannot.

A vast, often overwhelming, trove of data is generated every day related to a wide range of material factors regarding the utilization of health care benefit programs and plans. If captured and interpreted effectively, this data represents intelligence on which to find effective decision in plan design and implementation. Data analytics is the key to unlocking this source of deep insights to developing plans that best serve both employees and the organization.

In its raw form, the body of claims data gives little of any meaning. Yet, within the collected health plan utilization are the keys to unlock answers to the questions plan sponsors seek about where millions of dollars are being spent.

Health care benefits are a significant investment toward attracting and retaining employees. Questions about the money spent on health care benefits center on receiving optimum value for this investment. Are there ways to hold down the cost increases? What are the characteristics of our employee group and can we keep them healthy and productive?

The challenge is how to sort through it all, come up with meaningful metrics, identify the expense and utilization trends and establish strong evidence for decision making. Analytics supplies the method for mining valuable insights out of a mountain of data. The methodology of claims analytics explores the various layers of understanding; to get from the surface to the core reasoning for taking action.

What Can We Understand from Claims Data?

Evaluating data using analytics enables us to examine the results of health plan utilization at different levels:

  • Descriptive: At this basic level, analytics identifies how much the plan spent, how many participants utilized the plan and what providers they used. Over time, it can be determined whether costs are increasing and what utilization patterns are shifting. While these measures are basic, they are important for developing the right questions to ask at deeper levels.
  • Diagnostic: Analytics at this level helps us understand the causes for what happened. From the descriptive analysis, we may see higher out-of-network utilization than expected, or a spike in hospital admissions. Diagnostic analysis searches out the signs pointing to the reasons for unexpected or undesirable results.
  • Predictive: What can we expect to see next? From the trends developing over the prior years’ experience and emerging demographics of the employee population, predictive analytics helps us model future medical utilization and costs. In addition to informing budgetary considerations and contribution strategies, these analyses identify whether plan design features are being eroded or whether utilization incentives are adequate to encourage desired behaviors (e.g., screening and condition management).
  • Prescriptive: After looking at everything that happened, the reasons, and what we might expect to emerge, the next step is to look at what should be done to improve the value of the investment into health benefits. Prescriptive analytics uses claims data to model changes in plan design and provides a comparison of the expected outcomes from various scenarios. Examination of provider utilization and referral patterns can determine the most effective contracting relationships and develop better domestic utilization incentives.

Analytics is a valuable set of tools in better understanding health care trends and provides the opportunity to take annual renewals to the next level. Looking at claims data on a deeper level is essential for truly bending the cost curve in ways cost-shifting to employees cannot. Getting the answers starts with asking the right questions to uncover evidence for decisions that will enhance the value of employee benefits.


About Ju Anderson
Ju Anderson, Vice President, works with health care clients to create an effective strategy to address the health and welfare benefit needs including the financial analysis, implementation, efficacy and performance management of the health plans and other vendors.