Letter from the Executive Director

A Closer Look at Analytics

Analytics, a critical new path to healthcare value, is addressed in new Special Report issued today by the Healthcare Performance Management Institute. Titled “Analytics: How Bold Employers Are Using Big Data to Lower Healthcare Costs,” the report describes the critical role of a new technology model in controlling ever-escalating health costs.

At the center of a new trend toward a value-based healthcare system, analytics provides the mechanism to sort through mountains of complex data so that organization managers can focus on the highest value opportunities for better plan performance. Recent surveys support the increasingly important role of analytics in helping organization decision makers reduce costs and improve quality. A joint study by MIT Sloan and IBM of nearly 3,000 executives working across more than 30 industries found that top performing organizations use analytics five times more than lower performers, according to the Institute report.

The analytics business model described in the report relies on software tools that directly access real-time medical, Rx drug and care management data that can identify potential overall high-cost workforce health risks. The report describes how the model can compare this data against risk statistics in national databases and the predictive modeler maintained in the Johns Hopkins Bloomberg Adjusted Clinical Groups (ACG) Case-Mix System that tracks more than 80 million people globally.

“Based on the ACG System, an organization can gather, synthesize and analyze vast quantities of typically disjointed plan data stored in disparate data silos,” said the report’s author George Pantos, executive director of the Institute. Based on the data and the predictive modeler, targeted, actionable care management programs can then be developed to implement plan programs designed to prevent high-cost, high-risk conditions. “Seventy percent of all U.S. healthcare dollars are spent on chronic conditions caused by unhealthy lifestyles,” added Pantos.

The report contains success profiles of companies that have employed analytics to reduce costs, including the Men’s Wearhouse, a national men’s retailer that reported plan savings of $3.3 million in 2010.

The report can be accessed on the Institute’s website at www.hpminstitute.org/special-report-analytics. Complimentary hard copies can be ordered by calling 1-888-505-4764.

George J. Pantos
Executive Director

gpantos@hpminstitute.org