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The latest healthcare topics from a trusted, proven, and unbiased source.


Truven Health Risk Model Ranks High in Actuarial Evaluation


By John Azzolini/Monday, November 28, 2016

 

Healthcare payers today are facing the complexities of reform, increased competition, and budget constraints — all while dealing with pressures to reduce costs and improve member health. Managing health risk has become a necessity. But to manage risk, payers must first understand their population. To do this well, they need reliable, robust risk and cost of care models.

 

Last month, the Society of Actuaries (SOA) released a study showing that Truven Health Analytics’ cost of care model outperformed other risk models in 18 out of 22 measures. SOA’s Accuracy of Claims-Based Risk Scoring Models compared health risk-scoring models, building on their previous studies with similar objectives (the most recent was in 2007). In the medical claims category (predictions based only on medical claims data), the current study showed that, in 21 of the 22 measures, the Truven Health model was ranked either first or second. No other model came close to matching this performance. (See Table 1 for a summary of how Truven Health’s model ranked relative to the competition).

 

How the SOA Evaluates Risk Models

The SOA evaluated Truven Health Analytics’ cost of care model against six others:

 

  • ACG® System
  • Chronic Illness & Disability Payment System and MedicaidRx
  • DxCG Intelligence
  • HHS-HCC
  • Milliman Advanced Risk Adjusters
  • Wakely Risk Assessment Model

 

The SOA assessed all models on their ability to predict costs using the Truven Health Marketscan® commercial claims dataset of 1 million members, and used three methodologies to evaluate their precision: R-Squared, the mean absolute error statistics, and predictive ratios. All three methodologies measure the statistical difference between the prediction and the actual results. All models produced both a concurrent and prospective cost prediction and were evaluated using both a capped data set (where patient costs were capped at $250,000) and a non-capped data set.

 

The SOA evaluated the models’ predictive ability using a number of scenarios (total medical costs, simulated random groups, condition-specific predictions, patient cost). In the simulated random group scenario, the SOA created groups of 1,000 and 10,000 patients to simulate the application of the model to subgroups of the population.

 

Table 1: How the Truven Health Cost of Care Model Performed

The Truven Health model ranked first or second for its ability to predict costs in 21 of the 22 measures studied.

 

Scenario

Truven Health Model Ranking*

R-Squared

Mean Absolute Error

Non-Capped

Capped**

Non-Capped

Capped**

Total Medical Costs, Concurrent

2

1

2

1

Total Medical Costs, Prospective

1

1

1

1

Simulated Random Groups, Concurrent

2

3

1

1

Simulated Random Groups, Prospective

1

1

1

1

 

 

Predictive Ratios

 

 

Overall Condition Specific Prediction, Concurrent

 

1

 

 

Overall Condition Specific Prediction, Prospective

 

1

 

 

Very Low Cost Patients, Concurrent

 

1

 

 

Very Low Cost Patients, Prospective

 

1

 

 

Very High Cost Patients, Concurrent

 

1

 

 

Very High Cost Patients, Prospective

 

1

 

 

     * Compared with six other models.

** Capped at $250,000

 

Why Risk Models Are Important to Payers

Risk modeling is a very helpful tool for health plans and employers. It can provide valuable insights into member utilization patterns and risk– vital for benefit planning, disease management and wellness program management, and member communications. It can provide deep insights into provider performance, and aid in determining ideal reimbursement and premium rates. Such models are an integral part of a number of Truven Health databases and analytical tools. The SOA evaluation speaks to the high quality and reliability of the Truven Health solutions.

John Azzolini
Senior Consulting Scientist

The Five Key Components of ACO Analytics


By John Azzolini/Tuesday, August 30, 2016

Accountable Care Organizations (ACOs) were created to provide financial incentives for providers to control costs and improve the quality of care. As they continue to advance, it is important for both providers and payers to ensure that risk is being appropriately shared between the two. This creates a unique set of challenges in determining the best way to design, manage and evaluate these programs. Whether you are running an ACO or contracting with one, data is integral to determining the best model. Without the proper data, those providing the care, and those paying for it, are flying blind.

What’s more, not all ACOs are created equal, with three general types of models accounting for the bulk of ACOs: employer-sponsored, employer-direct contracted, and those leveraging existing insurer relationships. The analytic tools used to evaluate performance will depend upon which type of relationship a payer has with the ACO.

The ACO Analytic “Tool Box”

The five analytic methods listed below are key for ACOs managing program performance, and for employers and health plans assessing the value they are obtaining from these programs.

1.       Attribution

All measurement depends on a connection made between the ACO and/or its providers and enrollees. As a result, we need to uncover who the enrollees are, and for whom the ACO is bearing risk.

Often, explicit patient assignment does not exist. Where it does, the evaluation models need to incorporate it into analytic databases. In the cases where it doesn’t, the ACO needs to perform that attribution based upon the observed pattern of care received by the patient population.

2.       Population Health Management

There are multiple tools available to identify and stratify patients, such as predictive modeling, where risk scores based on age, gender, and diagnosis are employed. Other methods employ biometric or health risk assessment information. Examples of these include Health and Longevity Scores, Health and Productivity Indexes, and Health Status/Opportunity Scores, that can be used to segment patient risk levels.

3.       Network Management

If an ACO is at financial risk for the management of individuals, it’s imperative to know where people are receiving health services, what kind of utilization is taking place out of network, and where those out-of-network services are being given.

Many beneficiaries are not locked into the ACO network, which makes knowing whether these services are being given by high quality, efficient providers paramount.

4.       Program Evaluation

It’s important for everyone involved through the continuum of care that an assessment be made on the effectiveness of the ACO. As anyone who has been involved in care evaluation can tell you, there are a host of methodological pitfalls that can throw a wrench into measuring program evaluation. Controlling for differences between populations – specifically those who use the ACO and those who do not – is exceedingly important to determine the effectiveness of that ACO.

5.       Quality Measurement

In addition to evaluating ACOs on the basis of financial performance, establishing core quality measures for ACOs enables us to glean insights we would otherwise not have. Metrics such as potentially-avoidable admissions, screening rates, and specific process and care measures give us a baseline for quality measurement that is imperative in defining how well the ACO is performing.

Embrace the Risk

Risk is a fact of life in healthcare; it always has been. But in this new landscape, the ways in which both providers and payers are sharing that risk has undergone a drastic shift. Everyone will assume risk, but as we’ve outlined above, the key is to understand and properly allocate that risk between providers, patients and payers. The data is there; to guide these decisions, the key is employing the appropriate tools to establish this balance.

John Azzolini
Senior Consulting Scientist


Five Questions EMPAQ Can Help You Answer


By John Azzolini/Tuesday, May 10, 2016

The National Business Group on Health®, in partnership with Truven Health AnalyticsTM, an IBM Company, will be collecting EMPAQ® data until May 20, 2016. EMPAQ® (Employer Measures of Productivity, Absence and Quality™) is an online survey-based measurement tool ― developed by employers for employers ― that helps quantify the costs of poor health, low productivity, and absence. It provides employers with a framework by which to measure and monitor the return on investment they’re receiving from their human capital investments. 

Here are five questions you’ll be able to answer with the customized, benchmarking data you’ll receive when you participate:

If you would like to participate in the EMPAQ® program, you’ll need to submit your data to http://submission.empaq.org/ by May 20, 2016. Once the survey is initiated, you can authorize a consultant or vendor to complete the form on your behalf. We’ve set up a dedicated phone line and email to assist you with your submission. Call 855-878-8367 (855-TRUVENQ) or email empaq@truvenhealth.com.


 


EMPAQ® Is Open for Data Submission Through May 20


By John Azzolini/Friday, May 6, 2016

The National Business Group on Health®, in partnership with Truven Health AnalyticsTM, will be collecting EMPAQ® data between March 1 and May 20, 2016.  EMPAQ (Employer Measures of Productivity, Absence and Quality™) is an online survey-based measurement tool ― developed by employers for employers ― that helps quantify the costs of poor health, low productivity, and absence.

Why Should I Submit Data?

Your participation in EMPAQ will give you:

     A framework to monitor and measure your ROI from human capital investments

     Valuable insights to help you manage your health and productivity programs

     An individualized report that details how your program performs compared with similar employers and all respondents

     Specific recommendations based on your results

Read More About EMPAQ Data

Read the results from the 2014 data submissions to learn how the EMPAQ program can help you.

If you would like to participate in the EMPAQ® program, you’ll need to submit your data to http://submission.empaq.org/ by May 20, 2016. Once the survey is initiated, you can authorize a consultant or vendor to complete the form on your behalf.

We’ve set up a dedicated phone line and email to assist you with your submission. Call 855-878-8367 (855-TRUVENQ) or email empaq@truvenhealth.com.

John Azzolini
Senior Consulting Scientist


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