Posted on Feb 29, 2016 by Travis Jones
For HR managers or other group health insurance plan administrators, there are some common issues that are present with regards to the administration of virtually all group health insurance plans. One such issue is simply that if employees will use health insurance after they have it – some more often than others. Another major issue with group insurance is that premiums are constantly rising on a year-on-year basis. (To reinforce this, you can view Pacific Prime’s 2015 international medical insurance inflation report.)
With regards to the latter point, HR managers and plan administrators of all stripes widely regard premium increases to be their biggest problem where medical insurance is involved. Inevitably, there will be times when an annual premium increase pushes a group or company beyond what they are willing to pay. If this happens, administrators will no doubt go searching for options to get the premiums back to a level that the organization is comfortable with.
To be sure, there are a number of ways in which group insurance premiums can be controlled, including making sure that you are up to date on medical insurance trends. (Some of which will be included in an upcoming report that will be published in Pacific Prime’s blog and review the newest health insurance trends that plan administrators and HR professionals should be informed about) Additionally – and this is the focus of this article – costs can be better controlled through analyzing claims data.
You may ask, “How does claims data relate to our insurance premiums?” Read on to find out more about the ‘how’ and the ‘why’ as it relates to analyzing claims data.
The logic behind analyzing claims data
As the administrator of a group health plan, how do you find out about the general health of the members on the plan? Simple: The data that comes from the company’s claims can give you valuable insight into individual usage, while at the same time providing a bigger picture of the trends, unneeded features and shortfalls of your plan. With this information, a plan can be tweaked and streamlined to provide optimal coverage and improve overall employee health.
In addition, claims data analytics helps you, as an administrator, make informed decisions about how to find the most cost-effective insurance solutions or if the plan that you currently have is even right for your organization.
When beginning to gather data, the first thing you will need to know is where to look. There are a variety of different data points that can be collected in claims data analysis, including:
Data from previous health and wellbeing initiatives within your organization
The number of people who have left your group insurance scheme, as well as the number of new members that have joined
How many people are currently insured by your insurance policy, dependents included
How many sick days employees have taken
The questions HR has received from employees regarding making a claim on their health insurance
In order to get data that is accurate, it is likely a good idea to find a way to break up the groups within your organization, such as by team or department. This is likely to better allow you to make sense of the data that you collect. Also, you can begin storing the data to look at a historical view of employee claims and plan performance over an extended period of time.
So how do you get access to this data? For group medical insurance policies, you can contact the insurer directly, and they can then provide it to you. This can be done at regular intervals. No need to only request claims data once a year. You can acquire it on a semi-annual or even quarterly basis to better keep track of recent trends.
Analyzing the data
There can be a great many data points to collect with regards to your group insurance. That’s why it’s important to highlight the most relevant data and separate out that which is less valuable. Four aspects of claims data that are regularly checked the most are:
1. Claims related to ongoing or chronic conditions: Conditions that need constant maintenance can be extremely costly, as costs are continuous, and even one treatment can come with a heavy price tag depending on the illness. If your data shows that plan members are filing a high number of claims for ongoing conditions, it may be time to think about implementing wellness programs, health management initiatives, etc.
2. Claim timing: There are two different benefits to monitoring claim timing. The 1st of these being that, if you track when your employees are submitting claims, you can highlight trends. For instance, you may notice that certain days of the week are more common for sick days or when flu season is likely to strike, and with this data you will better know when to expect claims to be made. The other point with claim timing is that you can keep track of the amount of time it takes for the insurer to process claims. If your insurance company’s claims processing timeline seems to be getting longer and longer, you can expect to hear dissatisfaction with the plan voiced by employees.
3. Health care utilization: First and foremost, this relates to the number people in your organization that are actually using the health insurance. Not only this, it is also about what, in particular, they are using their health insurance for. Whatever the condition that causes a claim may be, you will want to be aware of frequent claims and any special cases that may be present within your organization. Highlighting these can allow you to better plan healthcare initiatives within the office.
4. Medical care costs: Of course, one of the biggest factors related to health insurance costs is the cost of treatment itself. For HR professionals, it is not only imperative to keep track of the total amount of the medical claims made against a policy, but also to collect data on the cost of claims made by each individual. After all, having this data will allow you to see how much value you are actually receiving from your group health insurance plan.
Figuring this all out can be troublesome, but it is certainly a worthwhile effort for every organization to undergo if it wants to ensure the quality and efficiency of its medical insurance. If you need help getting your start, or even if you’re an experienced HR professional that has a question that needs answering, Pacific Prime China can help! Contact us today and our agents will be happy to provide you with the information you need.