How to Use Health Claims Data in Well-being Program Design

Today we’ll be addressing the most comprehensive data insights your organization receives regarding health and a four-step process to use them for your well-being programming.

Propel works collaboratively with our clients when it comes to this data, and we design well-being initiatives, challenges, incentive programs, and marketing campaigns around the insights the data uncovers.

We touch on this topic, along with a number of other key components of running a well-being program in a few of our recent publications.

If you haven’t already, download our free eBook: Designing an Effective Well-being Program That Gets Results.

We provide a broad look at some of the most important considerations for a well-being program administrator as it relates to programming and promotion. There are also a number of free guides and templates that come with the eBook access, so be sure to check out all of the resources!

To approach our well-being programming more deliberately, we can begin by analyzing health claims data to identify prevalent health conditions within our organization.

By leveraging this data, you can set clear goals, create targeted interventions, and measure the progress of your well-being initiatives.

Many organizations have trouble with this targeted approach because of a lack of understanding when it comes to parsing claims data. Navigating the complexities of health claims data can be daunting, often requiring extensive sifting through complicated reports.

This post will guide you through the process of utilizing health claims data effectively to enhance your well-being program.

Understanding Health Claims Data

Before diving into the actionable steps for utilizing health claims data, it's important to understand what this data entails.

Health claims data encompasses information about the medical services and treatments that employees receive, along with the associated costs. This data is often presented in detailed reports that can span dozens or even hundreds of pages.

The challenge is to extract the vital information that can inform your well-being program design.

Getting lost in the volume of information frequently leads to inaction. To combat this, we have a four step process we recommend our clients use to get exactly what they need from the information.

Step 1: Identify High-Cost and Frequently Reported Conditions

The first step in using health claims data is to evaluate the health conditions that are both high-cost and frequently reported among your employees.

This information is typically categorized by diagnosis codes (ICD-10) and may reveal significant lifestyle-related conditions, such as Type 2 Diabetes (E11) and Obesity (E66).

Understanding the prevalence and costs associated with these conditions allows you to target them with well-being program interventions. The interventions will be much more focused and give you a more clear link between the preventative steps you are taking and the results you receive later.

If you are unsure how many high-cost conditions to select, we recommend focusing on 3-5 conditions.

Step 2: Focus on High-Cost Claimants

Next, it’s essential to drill down into the claims data to identify high-cost claimants.

Research shows that approximately 20% of claimants will account for 80% of healthcare costs, with a smaller subset of 5% accounting for 50% of total costs. The latter group, often with claims exceeding $100,000 per year, may not benefit significantly from well-being interventions, as they are likely entrenched in the healthcare system.

Instead, concentrate on the 20% of claimants with costs above $20,000 per year. This group represents the sweet spot for potential intervention, where well-being programs can have a meaningful impact.

For example, consider a company with 1,000 employees and an average annual cost of $10,000 per employee, leading to a total annual spend of $10 million. In this scenario, 50 employees account for about $5 million in claims, while 200 employees account for around $3 million. By focusing on the 150 employees whose claims range between $15,000 and $100,000, you can design interventions that are more likely to yield positive results.

Step 3: Analyze Costs by Diagnosis and Procedure

For the identified high-cost claimant group, analyze the costs associated with specific diagnosis (ICD-10) and procedure (CBT) codes. This analysis will help you understand the nature of the costs:

Ongoing Costs: Are there conditions, such as cancer treatments or surgical complications, where costs are high and likely to persist beyond one year?

Resolved Costs: Are most costs associated with procedures like joint replacements or heart events, which tend to spike but resolve over time?

Understanding these patterns allows you to tailor your well-being programs to distinguish ongoing health issues and allocate resources effectively.

It might also illuminate the one-time costs that have potential preventative interventions, such as physical therapy to improve MSK disorders before the need of surgery.

Step 4: Evaluate Claims by Facility

Another critical aspect of analyzing health claims data for high-cost claimants is to look at the dollars spent and the number of claims by facility. This step can help identify facilities with unusually high claims volumes, which may indicate potential anomalies.

For instance, if a significant number of claims are originating from specific dialysis or out-of-network orthopedic surgery centers, this may warrant investigation. By addressing these outlier claims—through network changes or renegotiations—you can reduce costs immediately. As it relates to your well-being program, education focused on selecting the right facilities can be designed to improve employee awareness.

By systematically analyzing health claims data, you can gain invaluable insights into your employee health landscape.

By focusing on high-cost and frequently reported conditions, engaging with high-cost claimants, and evaluating claims patterns, you can create a well-being program that not only continually improves employee health but also aligns with your organizational goals.

Implications for the well-being administrator:

• Effective employee well-being programs can be designed by analyzing health claims data to identify prevalent, high-cost health conditions within an organization.

• A structured four-step process that includes identifying high-cost conditions, focusing on high-cost claimants, analyzing costs by diagnosis and procedure, and evaluating claims by facility can enhance targeted interventions.

• By systematically leveraging health claims data, you can create well-being initiatives that improve employee health and reduce healthcare costs while aligning with your corporate objectives.

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