wellbeing

Analytics For Employers: A Tutorial (Part 2)

A succinct guide on how to save money on employer-sponsored healthcare

A succinct guide on how to save money on employer-sponsored healthcare

Over the past 3 years, the most common question we have heard from employers and brokers is this: health analytics is good, but what do we do with the dataWell, we are going to answer that question in this very post. That’s right, we’re sharing all the most actionable areas we look at for self-insured employers to help them to gain control over their spending. Some may say that we’re giving away our secrets, but we don’t see it that way. Our mission for employers is to make them savvy health care consumers, so making information transparent is what we do. Furthermore, it’s important to open up conversations on how organizations are using analytic data, because these conversations will help to advance insight and foresight so employers can use their data to create, track and refine a long-term strategy for the benefits they offer.

In Part 1 of this post we established that for employers, the best strategy for using health analytics moves beyond simply looking at spending to enter the realm of strategic benefit planning. This is the limitation of traditional healthcare analytics. Over the next decade, we will continue to see employers move away from watching spending go up and down and move towards looking at data in a way that provides both insight and foresight into population health. The next evolution of employer analytics informs a deeper understanding of who associates are, the benefits that will attract the best talent, and identifying the optimal strategy for funding these next-generation benefits packages.

To start, we pulled together a list of areas that any employer can explore if they want to ensure they’re using data to guide their spending decisions on health benefits. We've broken this into 3 sections: 1) Goals, 2) What's Actionable? and 3) Areas of Insight.

Beginning with the end in mind, here are the top goals that self-insured employers have when it comes to monitoring their health spending.

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Goals:

1.      To cut excess and wasteful healthcare spending and to accurately project future spending. Approximately 20% of an employer’s healthcare spending is wasted due to unnecessary and preventable costs. Open access to data helps to inform employers on exactly what areas are driving wasteful spending and how to better predict future spending.

2.      Identify strategies to support associates on their health journeys. While 5% of people drive 51% of health costs, 50% of plan members account for only 3% of health spending. Understanding how to support the unique, complex health needs of members affects a company’s bottom line in both healthcare costs and employee productivity.

3.      Track progress on the current healthcare and wellbeing strategy. An unbiased evaluation of a healthcare program is eye-opening. Not only does it guide the strategic evolution of an employer's healthcare strategy, it may reveal opportunities to recoup hefty vendor performance guarantees.

4.      Make sure members are getting the preventative medical attention they need. We consistently see that between 10%-20% of members never see a doctor. It’s within this group of people who are not driving costs today where an employer’s greatest future healthcare risks can lie.

In order to meet these goals, an organization needs to identify what exactly can be actionable. It's easy to spot the costs that stick out, but when is it too late to intervene on a cost-driver? Here are the most common areas where employers can focus to influence spending, care quality, preventative care, and effectiveness of condition management.

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What Is Actionable?

·        The plan’s pharmacy formulary (with some limitations based on the PBM partner).

·        The plan’s rules surrounding specialty medications.

·        The healthcare partners the employer selects (health plan, PBM, condition management services, smoking cessation, behavioral health services, direct primary care, centers of excellence).

·        Plan contributions, deductibles and coinsurance paid by employees for their healthcare benefit, emergency room surcharges, spousal surcharges, smoker surcharges, stop loss arrangements.

·        Cost variation among high cost and/or high volume services (MRIs, musculoskeletal surgeries, cancer care, etc).

·        Effectiveness of member education on health benefits.

·        Targeted wellbeing services offered to members.

Now that we’ve laid out the goals of using data and the areas that are actionable, here are some specific questions to answer when looking at the data.

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Areas of insight.

1.      Which conditions and medications represent the largest population health risks? How do these conditions vary by both dollars spent and number of people affected?

2.      Can amending prescription drug policies surrounding step therapy, specialty drugs, generics, place of service/purchase lead to savings for members?

3.      Does the member base have a problem with emergency room (ER) misuse and are certain locations or member categories driving ER costs?

4.      Do changes in member risk score, medication adherence and prevalent disease states such as diabetes show that your investments in condition management, smoking cessation and wellbeing interventions are working? Could performance guarantee fees be recovered from vendors?

5.      Are there trends noticeable related to members who are not engaging with physicians at all? Through looking at healthcare utilization among work location, salary bands, plan types—can we identify trends as to why certain people are not using necessary health services? These barriers to accessing care could be cost, lack of understanding of benefits, and even corporate culture, among others.

6.      What percentage of people are receiving preventative care and age-appropriate screenings among various member demographics?

7.      What are the largest cost variances that can be actionable? For example, could costs associated with procedures such as joint and hip replacement surgery or even MRIs be standardized via options that are available to your members? (Could centers of excellence be leveraged?)

8.      Could a direct primary care model have benefit for the member population?

9.      Are there actionable insights with respect to absence data and workers compensation claims?

10.  What is the size and scope (in dollars and members) of opioid use and dependency-related costs?

In the same way that reading an abstract is not the same as reading the book, please keep in mind that this is a very brief overview of a complex subject.* Every employer has unique challenges related to population health and health spending, so there's is no real "one size fits all" approach. The data drives the discussion in a unique direction for each employer.

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About BetaXAnalytics:

We combine data science with clinical, pharmacy and wellness expertise to guide employers and providers into a data deep-dive that is more comprehensive than any data platform on the market today. BetaXAnalytics uses the power of their health data "for good” to improve the cost and quality of health care. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

* A Note on Data Privacy The purpose of using health analytics is to identify actionable areas to target costs and to improve effectiveness of care options on an aggregate level. This is done by looking at trends in data and under no circumstances should insights be presented to an employer in a way where data is individually identifiable. There are a number of data-related best practices that we recommend to remain adherent to privacy laws. Any employer, broker or consultant who is using health analytics should do so under strict adherence to HIPAA regulations and under the advisement of an experienced data privacy attorney.

5 Questions with HR Leader Bob Selle on Why Decisions and Data Go Hand-in-Hand

Photo: Getty Images

Photo: Getty Images

Wellbeing goes far beyond what many think of when they hear the word “wellness.”  And employers realize that employee wellbeing is a key building block to creating an engaged and productive workforce. 

Bob Selle, Chief Human Resource Officer of Ocean State Job Lot (OSJL) talks with our team at BetaXAnalytics (BXA) about the challenges employers face with respect to maintaining a “well” workplace, and how data allows them to achieve this. 

BXA: What challenges make it difficult to have a healthy workplace?

Selle: Keeping a heathy workplace is hard, and retail poses some unique challenges. Associates are so spread out geographically and being able to communicate and get the right message can be difficult. Helping the associates understand the "why" to living a healthy lifestyle is also a challenge. We strive to translate what it means to their quality of life when they make healthy lifestyle changes.  Lastly and most importantly, we need to tie pieces together so they understand all the individual links that fit in a wellbeing chain.  Wellbeing goes beyond physical activity and nutrition; mental health, sleep, finance, and stress are all individual parts that tie the chain together.

BXA: How does Ocean State Job Lot support a healthy workplace?

Selle: OSJL supports a healthy workplace through a number of activities.  First, we have best in class benefits offerings at a very low premium to our associates. We are all one family and we believe in sharing our profits and low cost, and offering quality healthcare is one way to do this. We also listen to our associates.  For example, our associates want to be active and also give back to their communities. So we will pay for their entry fee in local walks/runs. We work with partners who share our values and find ways to have fun challenges between the locations we serve. Eating right is a big deal so we partner with Chop Chop, a non-profit who helped us create recipe cards and menus we share on our communications portal. Understanding that caring for associates and their families means caring for their pets, we now offer pet insurance.  In addition to this, we provide life insurance for every associate who works 20 hours or more.  Supporting a healthy workplace means so much more to us than the obvious.  We want to prioritize providing the education and resources that can ensure our associates have the tools they need to be healthy.

BXA: Why is data-driven decision making important at Ocean State Job Lot?

Selle: Data is valuable because it takes the emotion out of the equation. I like to ask my team, “What is the story?”  Data can provide this in many ways. The story can be told in pictures or graphs, but the bottom line is that it's factual and actionable.  The traditional barriers to using data to drive decisions are access (people do not know how to obtain the data they need) and understanding (people do not understand how using data can help them to form better decisions.) Every company has limited resources, so it is important to be targeted in your approach to wellbeing in order for your efforts to succeed.  At OSJL, we want to be smart stewards of our finances to be able to provide the best benefits possible for our associates, while providing low prices for our customers; making data-driven decisions helps that to happen.

BXA: How does OSJL use data to support their spending decisions?

Selle: We use the data to ensure that we work with the right providers for our associates. For example, if we did not know that not having life insurance coverage was a stress for our people, we would never have invested in this. Data showed that our associates are more at ease if their pets had insurance, so we made a business case to offer this benefit. Lastly, we have learned from our data that those who work part time for a number of businesses may not have the resources if an emergency came up.  So OSJL provides a full service employee assistance program to ease the burden.

BXA: What does the future of wellbeing look like at Ocean State Job Lot?

Selle: The future of wellbeing for OSJL is two-fold. First, we are becoming “surgical” in our approach to using data.  We want to make sure the resources we are providing to keep employees healthy are aligned with our true cost drivers and needs.  Second, wellbeing is at OSJL will continue to be fun and rewarding. Seeing and hearing the stories of associates who have transformed themselves using the tools we provide is priceless. This is why I do what I do.

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Founded in 1977, Ocean State Job Lot is the Northeast's largest, privately held, closeout retail chain with 126 stores in New England, New York, and New Jersey; approximately 4,800 employees; and annual sales exceeding $650 million. Our company mission is to provide exceptional value to our customers through opportunistic buying and selling of quality brand name merchandise, and to share the resulting profits with stockholders, associates, and the communities in which we live and work. The Ocean State Job Lot Charitable Foundation has a long history of philanthropic leadership, placing emphasis on local food banks in communities where we operate stores. Ocean State Job Lot is headquartered in North Kingstown, RI. oceanstatejoblot.com

BetaXAnalytics partners with employers like Ocean State Job Lot to use “data for good” to improve the cost and quality of health care.  By combining PhD-level expertise with the latest technology, they help employers to become savvy health consumers, saving health dollars and better targeting health interventions to keep employees well.  For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow Follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.