As the availability and utility of big data continues to grow by the day, Catalyst for Payment Reform has set out to better understand how employers are using data to inform their health care benefits strategies. We want to know, are advancements in data collection and analytics finding their way into the hands of benefit managers?
In practical terms, the answer to this question may start with an employer’s data warehouse. In the 1990s, large employers turned to data warehouses for several reasons, including needing someone to ingest claims data from multiple third-party administrators and conduct the occasional analyses needed for employer plan operations, like reconciling paid claims and bank outlays, periodically sourcing a new health plan, and monitoring annual growth of health care costs.
Employers also realized they could benefit tremendously from benchmarking their data against another employer’s. The significant investment in the technology required to process and store large swaths of claims data combined with the cost of owning the large data sets needed for comparative benchmarking created two large incumbents in the data warehousing field that still exist in some shape or form today, IBM and Optum.
Flash forward to 2018: data collection, storage, and analytics capabilities have improved and gotten cheaper. Additionally, the health insurance market has consolidated exponentially- many large employers only contract with 3 or 4 health plans nowadays as opposed to the 20-30 regional health plans partners of the past. But have employers’ expectations for their data warehouse evolved as well? Consider, for example, the fact that analyzing claims used to be a quarterly or annual activity.
Today, employers may expect real-time insights. Many employers still have to pay every time they make a data request, which feels like an outdated business model if a benefit manager is seeking data frequently enough to support ongoing decision-making.
Meanwhile, the rise of value-based purchasing strategies has shifted the types of data health care purchasers need to analyze. A winning data warehousing partner should shed light on the overutilization of low-value services, unwarranted pricing variation, network performance, and population health management. As their needs morph, employers are exploring whether to turn to different solutions for claims collection and storage and analytics and reporting, which could explain the rise of new entrants in this field.
If you are a benefits manager that makes use of your company’s contracted data warehouse, are you satisfied with what you are getting? Have your needs evolved over time? As we begin to explore this area, we want to hear from you! Feel free to send us an email at info@catalyze.org