Big data — the use of large, complex data sets to identify trends and associations — is nothing new for benefit managers at large companies. For years, employers have looked to data warehouses to help them wrangle different sources of data to understand and assess their employee health benefits programs. Given that healthcare is a large part of the budget for American businesses, embracing big data is more important than ever.
This is especially true in a tight labor market. In June, the national unemployment rate stood at 3.7%, low by historical standards. Most employers can no longer control spending by shifting healthcare costs to employees through higher premiums, deductibles, and copays. Instead, they need to explore innovative purchasing strategies, such as benefit designs encouraging the use of accountable care organizations or narrow networks and direct contracts with healthcare providers.
But these strategies must be data driven. We’re not talking about leveraging the standard reports of yesterday. Self-funded employers require new standards in data warehousing and analytics to support next generation healthcare strategies.
Create a data strategy. Employers may believe having a health benefits strategy means they have a data strategy — they have likely already been leveraging data to make strategic decisions. But employers should think of their benefits and data strategies as partially distinct, because a good data strategy should allow employers to look both forward and backward. Employers should not only leverage data to set strategy but also to measure the impact of changes and make adjustments. This kind of foresight and hindsight requires purchasers to pause and create an overarching approach to managing their healthcare related data.
Flex their rights as owners of the data. A primary reason employers self-insure their benefits is to gain greater access to their data to set strategy and make decisions. Sometimes, however, they encounter challenges accessing data from third-party administrators or other vendors that consider certain data proprietary. With all the innovative purchasing strategies self-insured employers are considering today, employers must ensure their agreements with vendor partners address data ownership and sharing so they can use their own data. If the employer makes a request for data the vendor considers proprietary, employers should avoid agreeing to overly-restrictive non-disclosure terms.
Choose a user experience that fits. Competing data warehouse vendors should highlight how they uniquely meet the needs of each employer customer. An employer that lacks the staff or capability to pull and analyze reports on its own should consider a partner that can help or automatically push reporting to the benefits staff for a reasonable fee. An employer with its own data analysts supporting the benefits team should consider vendors that offer self-service capabilities, like the ability to run data applications and use the vendor for support or interpretation. Guarantees should underlie the level of support the employer selects, whether it’s report preparation and turnaround time for those looking for a more hands-on approach or database uptime to facilitate self-service.
Focus on what’s actionable. Supporting today’s innovative purchasing strategies requires data on cost, quality and value. Data warehouse vendors need to make reporting as actionable as possible. Think of apples to apples comparisons for the employer’s plan design, region and industry. The Health Care Cost Institute’s Health Care Cost and Utilization Report reveals how experts examine the larger trends at play, creating a template for benchmarking reports that an employer can leverage.
Get specific. Employers and their vendor partners have a major role to play in improving the functioning of the marketplace by eliminating waste and aligning provider incentives toward value. To accomplish that, employers should expect data warehouses to identify system inefficiencies and opportunities for improvement, such as:
· Over-provision of low-value services
· Under-provision of high-value services
· Unexplained price variation
· Claims unnecessarily lumped as “miscellaneous”
· The quality of providers and facilities based on external reporting
· Opportunities to increase the use of high-value providers through referrals
· Patient-reported outcomes
· Adoption and evaluation of payment reform programs
Think outside of your own data box. Employers, particularly ones with large populations in concentrated geographies, can miss the forest if they are only looking at the trees in their own claims data. Looking at data from an all-payer claims database could offer greater insight into the local prevalence of conditions, costs, and provider practice patterns. In addition, understanding social risk factors that impact employee health and productivity can give benefit managers additional insights for strategic planning. After all, self-funded employers are shepherding the healthcare coverage of their most prized asset — their employees. Such a big task requires all the tools possible, including taking full advantage of big data.
