Four data analytics areas that promote cost savings

August 7, 2017

Analytics is an integral component of healthcare no matter what Congress decides, according to one expert. Here are 4 areas of data analytics that health plans can develop that will promote future cost savings.

Though the climate of healthcare has been uncertain due to politics and policy, health plans should be able to be forward thinking when it comes to managing patients using data analytics, says Lawrence Schimmel, MD, FACS, chief medical officer of QualMetrix.

Schimmel presented “Data Analytics: A Mandatory Component of the Evolving Healthcare Ecosystem,” at the National Association of Managed Care Physicians (NAMCP) Spring Managed Care Forum 2017. During the presentation, he stressed that though politics around healthcare keeps changing, everyone can agree that the system needs to be fixed.


“Analytics is an integral component of healthcare no matter what Congress decides,” Schimmel says. “Healthcare organizations all work with tight budgets. The hesitancy in committing to invest in data analytics is due to budget constraints. But a forward-thinking organization will see that the investment now will be made up in cost saving strategies later.”

Though Schimmel suggests that health plans work with third-party vendors to get the most out of the technology, he says that very large health organizations would benefit from custom-build software.

“I think that healthcare organizations’ goals are to manage members, make sure their care in rendered and that they get the best healthcare for minimum cost. Why should they divert attention from that, and hire engineers to develop a platform? If a platform can be configured to meet the needs of the organization, they are better off letting someone else handle the software, especially when it is being enhanced and improved on a continuous basis,” Schimmel says.

Before making an initial invest in data analytics, Schimmel says that health plans need to evaluate software based on how it will work within existing workflows.

“It starts with an organizational structure. There are many robust platforms on the market right now. Health plans should be looking for functionality, ease of use, and the ability to filter data,” says Schimmel.

Analytic software is not reinventing the wheel-health plans already have the claims, they just make the data easier to access and evaluate, Schimmel says. With that thought, he adds that there are four areas of data analytics that health plans can develop that will promote cost savings in the future:

Next: 4 ways



Data segmenting

Because of all of the claims data than many health plans already have, Schimmel says it is important that they be able to organize it in a way that makes it useable as a first step.

“At minimum, the data analytics company that you partner with should be able to aggregate claims data and make it useable,” Schimmel says. “That means, segmenting the data by line of business and looking at that data based off of which company it is from. So, the first step is organizing and segmenting. So, the first step is organizing and segmenting.”

Cost utilization

Health plans should be able to look at their data to find out where the costs are coming from. “What physicians and members are driving the most costs? You should be able to identify the cost of continuous care for patients, and see what drugs are driving those costs as well,” Schimmel says.

Population health

Being able to segment the total population based on risk, diseases, and costs is the next step of data analytics, after segmentation and cost utilization can be achieved, Schimmel says.

“You should be able to look at individual members and predict what is going to happen going forward using a predictive model. This way, you can focus on where the problem members are, and how to manage their diseases and complications,” he says.

Provider performance

Provider performance is a key area of health plans today, Schimmel says. “As premiums continue to rise, health plans need to figure out how they can better manage costs while increasing the quality of care that is delivered to their members. The primary care physician is supposed to be the captain of the ship, so health plans need to be able to evaluate who the high-performing providers are and why,” he says.