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The case for analyzing claims data

If you are a group or company health insurance plan administrator or HR manager you have likely noticed that there are two near constants when it comes to the management of your health insurance plan. The first is that if employees have health insurance they will use it – some as much as possible, the second is that premiums will always be increasing, as Pacific Prime highlighted in our 2015 report on international medical insurance inflation.

It is the second constant that many plan administrators and HR managers quote as their largest problem when it comes to international health insurance. Because premium increases are inevitable, companies will eventually reach a point where premiums go beyond the budget tolerance. When this point is reached many will start to look into cost containment measures in order to keep these premiums below the set budget threshold.

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While there are many actions that can be taken to manage premiums, including being aware of the current trends in health insurance (Stay tuned to Pacific Prime’s blog, as we are currently working on a new report that provides an overview of the top trends HR and plan administrators should be aware of when it comes to health insurance), one essential action is to analyze your claims data.

The question is, how can claims data help insurance premiums, and what should you analyze? To help, we have created this short article that answers these questions.

Why analyze claims data?

Put simply, the data generated from claims made using your company’s group plan helps to provide an understanding of the current health of your employees, while also helping to identify potential trends and gaps in care that can then be leveraged to make your plan more efficient or even introduce actions that can help to improve the health of your employees.

Ultimately, analyzing your claims data can also help you make a more informed decision when it comes to selecting the most cost-effective health insurance for your company and whether the plan you have is actually the best option for your company.

How do I gather this data?

There are a number of different streams from which you can gather the necessary claims data. The first is you are going to need to track some of it yourself. This includes information like:

  • Questions from staff regarding health insurance claims
  • Number of sick days taken
  • Reasons for sick days – if any are given
  • Number of people insured by your group health insurance scheme including dependents
  • New additions to the scheme and number of employees who have left the scheme
  • Any available data from previous schemes and health initiatives run by your company

To get the most accurate data, it is advisable to track this data by department or even team. The reason to track much of this data is that it can actually help make better sense of the actual claims data. Beyond that, it can also help you develop a historical background from which you can benchmark existing and new data.

The second is the actual claims data itself. For group schemes, this data will be available from your insurance provider, which means you will need to contact them and ask for the data. Depending on how often you do a claims data analysis it may be beneficial to request the data on a quarterly or semi-annual basis.

What should I analyze?

While all the data generated during claims analysis is important, some data will be more relevant than others. Here are four of the most commonly analyzed parts of claims data.

  1. Health care costs – This includes the total cost of all health care claims made throughout the period of measurement and the total cost of care for each individual claimant. This data allows you to see how much costs are increasing, and if there are any individuals whose cost of care is considerably high.
  2. Utilization of health care – This usually includes the percentage of employees actually using your health care plan. It is also important to look at what your employees are utilizing health care for. This includes visits for colds, general exams, checkups, OB/GYN visits, Cancer screenings, specialist visits, etc. What you are looking for here are any standout cases or repetitive claims as these can highlight potential areas for wellness initiatives or areas where attention is needed.  
  3. Claims timing – This data is twofold in nature. First, you are going to want to look at when your employees are submitting claims. This can help you identify trends like for example what day of the week medical care is likely to be sought out, or what time of the year you will see a bump in claims e.g., flu season. Secondly, you are going to want to look at claims performance – the amount of time it takes the insurer to receive, consider and pay out a claim. Poorer performance could indicate potential dissatisfaction with the plan and a need to work with insurers to improve service.
  4. Claims for ongoing conditions – Ongoing conditions are among the most costly when it comes to care and claims. If you notice a high number of claims for ongoing conditions this may indicate the need to look into health management initiatives, etc.

This can be a time-consuming effort, but it is an essential process if you are looking to have the most effective health insurance scheme in your business. Pacific Prime can help with this, so feel free to get in touch with us today.

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Content Strategist at Pacific Prime Hong Kong
Jessica Lindeman is a Content Strategist at Pacific Prime. She comes to work every day living and breathing the motto of "simplifying insurance", and injects her unbridled enthusiasm for health and insurance related topics into every article and piece of content she creates for Pacific Prime.

When she's not typing away on her keyboard, she's reading poetry, fueling her insatiable wanderlust, getting her coffee fix, and perpetually browsing animal Instagram accounts.
Jess Lindeman