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Claims data still a secret weapon in care, cost containment


Data mining and predictive modeling can get us over the electronic data hump until EMRs reach critical mass

While that information is useful, it only scratches the surface of what claims data can tell health plans and payers about their members. By accessing electronic claims data, health plans can mine, analyze and download information about members individually or collectively. This data can be used to determine which members are at risk for specific health issues and inform disease management program design to help them before the event occurs.

"So much of the information that would tell a plan what is driving the cost of healthcare is either unavailable or late," says Keith Lemer, president of WellNet Healthcare in Bethesda, Md. "What winds up happening is you don't get to the root cause of the problem-what is driving costs and what type of action can be implemented on the appropriate segment of the population to keep those costs down."

"They [patients] are not high dollar yet, so no one is paying attention," she says. "By the time they are in the hospital, it's too late to do anything about preventive care. You've already incurred big dollars."


Upper Merion Township in suburban Philadelphia launched a multi-year assessment of its healthcare strategy in order to control costs. The community, with a population of 27,000, is self-insured through a PPO arrangement for its 200-plus employees and 30-plus retirees. Healthcare costs were draining the general fund budget, according to Fred Santoro, director of human resources for the township.

"The increasingly negative budget impact [of healthcare costs] was threatening to affect the level of services we provide to our residents," he says.

Instead of opting for a short-term fix or shrinking benefits for its employees, Upper Merion used claims data to take a long view of utilization. First, the township negotiated a cost-sharing plan with its workforce. Employees, for the first time, contributed to the cost of healthcare at a flat rate of $656 annually, no matter the level of coverage. Costs were paid 100% by the township previously.

"Part of our strategy is to get our employees more involved in cost containment," Santoro says. "One of the ways to do that is to give them a stake in the process."

Since the township was asking its workforce to share in the cost, officials wanted to reciprocate by building preventive care measures into its healthcare solution. Upper Merion and WellNet Healthcare, its DM provider, implemented a software solution that uses electronic claims data from the prescription benefit program to provide a summary of members who are at the biggest health risk so that they could receive care management and the proper attention and education before an adverse event occurs, Santoro says. At the same time, the technology allows Upper Merion to gain a view of past, present, and future healthcare-cost scenarios for the township.

The technology platform electronically deposits pharmacy claims data daily into an interface that resides on the human resource and finance departments' desktop computers. The real-time, consolidated data is available in a centralized, online dashboard, and the snapshot of information delivers an actionable overview of patterns and warning signs associated with the township's plan expenses.

"This helps to determine cost-saving plan decisions," Santoro points out.

From the employees' perspective, the technology's member engagement tool is a patient portal that allows users to coordinate all aspects of their healthcare in a HIPAA-compliant manner, Santoro says. Members can communicate with care managers, claims specialists and providers, and they have the ability to research conditions, compile a PHR, review medications and claims, track spending and manage incentives.

The program has been in place for less than a year, so there is no hard evidence of cost savings yet, but Santoro says township officials are convinced that in three to five years, the township will achieve a 4-to-1 return on its investment in prevention.

"That's the benchmark we're shooting for," he says. "It will be a positive if we get anything more than a 1-to-1 ratio."


Prevention is just one area where electronic claims data can be leveraged for cost-containment purposes. Jeffrey Allison, engagement manager for the Michigan Public Health Institute, which studies the state's Medicaid program, says electronic claims data, in conjunction with other quality measures, can be used to improve patient care and outcomes.

"We can use the data to determine the cost of care [for patients] when preventive care is used versus those who did not have preventive care, and wound up in acute care for the same disease states," he says. "That allows us to try to make more preventive care available."

That is one clear reason why the federal government, employers, plans and others who seek to control costs tout the need to enhance electronic data.

"Within claims data, you see what the actual results are for the various disease states," says Matthew Haddad, president and CEO of Medversant Technologies, a Los Angeles software company. "You can see some definite patterns over time. The data can tie treatments and procedures with outcomes."

And with the drive to push providers to adopt EHRs and members to adopt personal health records, electronic claims data can become the hub of information.

"It helps bring pieces of information together, so providers can more clearly understand what is going on with the patients they are working with," Casenet's Hunt says. "You need the entire picture to have a real impact. Claims data is a key piece because it identifies opportunities and figures out where there are areas of underutilization and overutilization. Plans can look for people with the greatest opportunity for intervention."

Santoro says the preventive care strategy in Upper Merion has gotten some of its older employees to think proactively about their health.

Without electronic claims data, the strategy would have been useless, he says. "The statistical information about high-risk populations and potential costs down the road could not be done without technology," he says. "You might eventually be able to gather the data. But not in a timely way, which means it would be of little use in preventive care."

Ken Krizner is a senior editor in Advanstar Communications' Centralized Content Group.

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