1 Using Applied Analytics To Increase Return To Your Customer And Improve Medical Cost ContainmentNotes included with each slide for ease in script review. Make edits in the matching word document, with Track Changes turned on. NASP 2009 Annual Conference
2 Welcome Marcia L. Moberg, Ph.D., Operations Research AnalystIngenix Subrogation Services
3 The Context: Rising Cost of Health CareAlarming Facts: Health care spending is 4.3 times the amount spent on national defense. (California Health Care Foundation, 2005) About 1.5 million families lose their homes to foreclosure every year due to unaffordable medical costs. (Robertson, C. T., et al, 2008) Since 1999, employment-based health insurance premiums have increased 120 percent, compared to cumulative inflation of 44 percent and cumulative wage growth of 29 percent during the same period. (The Henry J. Kaiser Family Foundation, 2008) Health expenditures are expected to rise at a rate of two times the rate of inflation for the next decade, reaching a projected $4.3 trillion by (Keehan, S. S., et al, 2008)
4 At Issue: Health Care Cost ContainmentCampaign Platform for Government Officials Important Aspect of Health Care Reform Financial Risk faced by Employers, Employees, Insured, Uninsured, virtually EVERY CITIZEN
5 The Opportunity: Subrogating ClaimsAccident-related claims typically account for 8 to 10 percent of claims volume. The health plan may not have primary responsibility for accident-related claims, but it could be the responsibility of another insurer, such as Workers’ Compensation, Auto Insurance, or other medical payment insurance. The health plan may be able to recover benefits paid from liability, other insurers or the other parties through the right of subrogation. There are over 20,000 ICD-9 Codes. 3,700 ICD-9 Codes are indicative of an accident.
6 Health care subrogation is an important weapon in combating rising costs associated with financing accident-related health care claims.
7 The Value of SubrogationPlaces the burden of health care expenses on the appropriate party responsible for paying. Helps control administrative expenses and improve overall medical loss ratios. Improved medical loss experience may drive lower premiums, resulting in increased affordability and access to health care. Increased affordability and access to health care benefits everyone.
8 Subrogation Case Lifecycle
9 How can we use Applied Analytics…to MAXIMIZE results?
10 What does “Applied” mean?“To put to practical use; especially: applying general principles to solve definite problems
11 What is “Analytics”? “The extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact- based management to drive decisions and actions” Davenport & Harris, 2007
12 Analytics, further defined:Data factual information Statistical Employing the principles of statistics Quantitative Expressed in terms of quantity Analysis Separation of a whole into its component parts Explanatory model A useful description of why something happens Predictive model A prediction of future events using historical results Fact-based management Using “facts” to make decisions
13 One definition of Applied Analytics…The use of predictive analysis to identify additional subrogation and savings opportunities, provide data that will enable the business to make better decisions, and find ways to reduce expenses, maximize recoveries, increase revenue, and improve productivity.
14 “Science” and “Art” Science is organized knowledge. Wisdom is organized life. Immanuel Kant ( )
15 “Science” vs. “Art” Definition and discussion of Applied AnalyticsHypothesis Testing Descriptive Analytics Trend Analysis Predictive Analytics Data Mining “Art” Analysis Explanatory Models Business Acumen Intuition Experience Industry Knowledge
16 What is Science? Science involves rigor and discipline, validity and reliability, as well as the testing of hypotheses. An important component within the science of data analysis is trying to avoid decisions based on human assumption. Utilizing a scientific method of investigation and introducing both independent and dependent variables into our study enable us to attribute a change to a specific set of variables that have been manipulated. Advanced analytic techniques, such as statistical analysis, data mining, and predictive analytics, allow researchers to draw conclusions from the data and facilitate the forecasting of results and the optimization of processes.
17 What is Art? Art is creative. It can be spontaneous, but also flexible and organic. It is influenced by the characteristics of the artist and is an expression of what is important and salient to that person. Knowing what questions to ask can be both science and art. Business experience and acumen, as well as intuition, play an important role in designing both the questions to be answered with your data as well as knowing which follow- up questions to ask once you have your data.
18 Identification of Subrogation CasesThe role of Applied Analytics in Subrogation case identification ICD9 Codes Place of Service Codes/CPT Codes/DRG Codes/ETGs Third Party Data Sources State Worker’s Compensation Boards External Litigation Databases ISO ClaimSearch
19 Investigation of Subrogation PotentialThe use of Applied Analytics in Subrogation case investigation Accident Questionnaires Response Rate Open Rate False Negatives
20 Case Management The role of Applied Analytics in Subrogation case management Case “Scoring” Case Specialization Metrics Development
21 Optimization of Processes and ResultsThe use of Applied Analytics in Subrogation processes Settlement Ratio Targets Analyst Performance Analysis ICD9 Code Analysis ICD10 Code Preparedness
22 Telling the Story: Context is KeyGood statistics should tell a story Statistical analysis has a narrative role that allows us to sharpen the point to that story
23 The Key: Science AND Art CombinedOperations Research teams Data Mining Descriptive Analysis Predictive Analysis Business Operations teams Productivity/Performance Reporting Experience/Business Acumen/Intuition Negotiation Skills Expertise Client Services Client Reports Benchmarking
24 Summary The use of data mining, analytics and predictive modeling isn't the solution, its just the start. The best subrogation teams will differentiate themselves in the marketplace with their ability to use… SCIENCE to combine advanced analytics techniques/statistics /predictive modeling /automation ART to combine expert knowledge/intuition/design and interpretation of results
25 Questions?
26 Thank You!
27 Resources: Executive Briefing/White Paper ISO ClaimSearch ISO ClaimSearch https://claimsearch.iso.com Recovery Data Connect ICD10