By Bill Kerrigan

The lack of insight into health care costs and utilization provides a major obstacle for employer sponsored group benefit programs. The primary payers of health care for the majority of working Americans are at a significant disadvantage compared to other health stakeholders (e.g., providers, health systems) vying for their employee benefit dollars. These entities regularly aggregate and analyze data to gain actionable insights to increase profits and health care trend. Despite the billions of dollars that flow through corporate bank accounts on a daily basis to fund self-insured claims, employer attempts to match this analytic arms race suffer from misplaced focus and lack of resources.

Employers with a data warehouse strategy have generally focused on aggregating medical and prescription drug claims with wellness data collected through health risk assessments and biometric screenings. By combining this information, third party suppliers promised to deliver insights to employers to improve population health and employee productivity. The resulting initiatives (e.g., wellness vendors, incentives programs), however, yielded little return and left employers questioning their data investment.

By concentrating on population health and overpriced data storage units, these employers missed an opportunity to target health data analysis on inefficient delivery, unnecessary services, and excessive pricing. In recent years, employers have been caught off-guard with numerous excess spending examples ranging from compound medications to ineligible dependents. The financial impact of these surprises could have been greatly subverted with a data analytic emphasis on excess costs.

Without appropriate resources (i.e., time, skills, knowledge), the value of focusing on inefficiency will be unrealized. To understand if sufficient resources are allocated to data analytics, employers should consider these questions:

• How much time is spent on a daily basis analyzing claim data?
• Are broker suggestions limited to increasing employee cost-share or implementing new programs?
• When is the last-time anyone on the benefit staff directly accessed the data for more than basic reporting?
• Are insights from data analytics shared with senior management on a regular basis?

Analysis must be a continuous exercise. Data need to be real-time—static, non-responsive date environments miss the mark with cumbersome spreadsheets and presentations. Even the largest employers struggle with these challenges as evidenced by the recent creation of the Health Transformation Alliance (www.htahealth.com). For any organization to succeed in reducing health system redundancy, tighter focus and appropriately allocated resources are necessary.

For more information contact Bill Kerrigan at info@kerriganreid.com

This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The comments in this summary are based upon Kerrigan Reid’s preliminary analysis of publicly available information. The content of this document is made available on an “as is” basis, without warranty of any kind. Kerrigan Reid disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Kerrigan Reid reserves all rights to the content of this document.