‘Those who don’t know history are doomed to repeat it.’
So said the Irish-born statesman, author and philosopher Edmund Burke, some time in the 18th century. And today, when it comes to your company’s health insurance claims history, Burke’s assertion remains particularly apt.
There is much to be learned by analysing your company’s claims history, from understanding the most common claims made by your workforce or policyholders, to identifying potential cases of fraud. The knowledge gained from claims analysis can be used to tailor your cover to provide a much more streamlined, cost-effective product.
The key is to know what you’re looking for.
What to look out for in your claims analysis
The first thing to check for is that consistent procedure coding is being used. This is particularly important for making sense of all the data. The US, for example, has over one billion patient visits per year. Consistent procedure coding allows every single visit to be precisely analysed and effectively reported. Such efficiency reduces errors and saves money. And with solid, accurate analysis you can arm yourself with insights that will enhance the insurance benefits you offer your employees, while saving unnecessary costs.
Consistent procedure coding allows
every single visit to be precisely analysed
and effectively reported.
Specific features to watch out for in your claims analysis include:
- High cost claims: Identifying your high-cost claims and claimants will help you see where the pressure points are on your health cover, as well as on your staff. If you know that 70% of your claims are for a certain condition, while another condition only accounts for 1% of your claims, you can work with your insurance provider to tailor your cover to give better value for the more frequent condition. You can also investigate whether there is something that needs to change in the workplace to mitigate against this prevalence.
- Chronic conditions: Conditions such as diabetes, obesity, arthritis and hypertension are on the rise in Southeast Asia. They are also a major contributor to other, often life-threatening conditions, yet are almost always preventable. Your claims history will help you understand how prevalent these chronic conditions are amongst your workforce and take appropriate action – such as introducing a wellness programme to educate staff about their diet and lifestyle habits.
- Readmission claims analysis: Which conditions have high readmission rates? How many readmissions are due to insufficient diagnosis and care in the initial stage? Heart failure, for example, has a high rate of readmission in the region. With this sort of knowledge you can begin to seek out better preventative practices, higher standards of care and even better initial diagnosis, which would have the dual benefit of helping to return your employees to health sooner and reducing the number of claims for readmission.
- Analysis of claims at diagnosis level: Look to see how many diagnoses among your claims data are ‘right first time’. A false diagnosis means unsuitable treatment and, in some cases, exacerbation of the patient’s condition, which inevitably leads to increased claims costs. Cognitive psychologist Arthur Elstein, who spent his career studying clinical decision making, concluded that misdiagnosis occurs in 10-15% of cases. A 2012 BMJ Quality & Safety study backs up this assertion. If your diagnostic data is out of step with these figures, it may be time to re-evaluate your choice of healthcare providers.
A false diagnosis means unsuitable treatment and,
in some cases, exacerbation of the patient’s condition,
which inevitably leads to increased claims costs.
- Suspicious anomalies: As well as revealing patterns of common claims, analysis of your claims history will also highlight any incidences that don’t quite fit with normal patterns. These anomalies may very well be genuine but it’s worth investigating any claim that raises concerns. Healthcare fraud is big business – in the US it’s estimated to cost nearly USD 70bn per year, or 3% of total healthcare expenditure. And according to The Association of Certified Fraud Examiners, in almost every case the care provider is at the centre of the fraud. Common transgressions include billing for services not provided, claiming for a service that’s not covered by the policy, misrepresenting dates and/or locations of service, waiving of deductibles and/or co-payments, incorrect reporting of diagnoses or procedures, overutilisation of services and unnecessary or false issue of prescription drugs.
- Provider network utilisation: Claims analysis can be used to give you information not only on your employees’ claims patterns but also on the facilities and services within your healthcare provider network. How many claims does it handle? How many are referred outside the network? And at what price? This information will help you assess whether your network is fit for your purposes. Do you need to consider expanding it to reduce external costs? Or should you perhaps reduce the size of it to enable you to engage with the key providers and gain a better working relationship?
- Provider claims analysis: By looking at the data for claims submitted by the different healthcare providers within your network, you will gain useful insight into the service you’re receiving in each case and how they compare to one another. For example, you may find you have a situation where one provider is charging much more than another for the same procedure. Having this information at your fingertips will strengthen your hand if you need to talk to your providers about reviewing fee schedules.
- Choice of pharmaceuticals: Drugs are big business and the choice of medication prescribed to your plan members will have a significant effect on what you pay. According to the US Food & Drug Administration (FDA), branded pharmaceuticals are 80-85% more expensive on average than their unbranded equivalent. So if your providers are in the habit of prescribing branded drugs to your employees, you might want to talk to them about trying the generic equivalents.
According to the US Food & Drug Administration (FDA),
branded pharmaceuticals are 80-85% more expensive
on average than their unbranded equivalent.
Learning about the past, present and future
Another British statesman and philosopher, Francis Bacon, stated that ‘knowledge is power’. The knowledge gained from your claims analysis can give you power in various forms: The power to understand the condition of your workforce and look after their welfare more effectively; the power to protect yourself from fraudulent claims, wastage and unnecessary spending; the power to see patterns and make accurate forecasts; and ultimately the power to tailor your healthcare insurance plan efficiently to cover the areas in which you truly need it.