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7 Highly Elegant Business Intelligence Applications for Healthcare Payers

Originally published June 23, 2009

My BeyeNETWORK Healthcare Channel co-host Scott Wanless recently wrote about the seven highly elegant business intelligence (BI) applications for healthcare providers. Scott defined “elegant business intelligence applications” as those that:

  • Add value at any time – immediately and in the future.

  • Add value in any economy – recession or expansion.

  • Add value at any level of the organization – tactically and strategically.

  • Apply to any size healthcare organization – large or small.

  • Apply to any type of healthcare organization – hospitals, clinics, labs, long-term care, etc.

  • Are visible and valuable across the organization – to the chief medical officer, chief financial officer, chief operating officer, et al.
For clarity, when referring to applications in this article, I am referring to a methodology or an application of a methodology, not software. For example, the article discusses the value of applying business intelligence to fraud and abuse, a methodology that could save healthcare payers millions of dollars.

Success, and therefore elegance, of any BI application must be considered first and foremost defined by the adoption of the tool by the average user. The definition of an average user is a person that doesn’t analyze data for a living, but is relatively comfortable using software, responding to prompts, etc. Healthcare payers must have  highly elegant applications that provide immediate value to all levels of users. In today’s economy, with the pressure to control cost and deliver more services with fewer resources, the need for business intelligence applications is now more critical than ever.

Seven Examples

Here are seven applications that qualify as elegant business intelligence applications – methods for healthcare payers to use business intelligence to improve revenue, efficiency and process.

Fraud and Abuse. One of the largest financial opportunities for healthcare companies is to more systematically flag fraud and abuse. Because of the volume of data and the sophistication of the criminals that are involved in these activities, it is much more difficult than it would appear to be. The key to fraud and abuse is patterns in data that does not coincide with other patterns. Subtle things like an increase in the number of claims from a specific physician or location (i.e., pharmacy) can indicate fraud. Volume is not something the average fraud and abuse department reviews; but in documented cases, perpetrators will increase the claims volume by 100 to 200 percent, for reasonable dollar amounts, and then close up shop before the payer can track them down.

Cost and Utilization Analysis. Often considered the “bread and butter” of healthcare business intelligence, cost and utilization reports should not be overlooked. They meet the criteria of highly elegant because they provide quick value in any economy; of course, there is always room for improvement.

Cost and utilization reports typically cover:
  • Claims volume

  • Claims lag

  • Claims with errors

  • Per Member Per Month (PMPM) or Per Employee Per Month (PEPM) for those reports that go to employer groups.

  • Total membership (eligible)

  • Utilizing membership

  • Much more…
All of these stats are good information, but one thing that most cost and utilization reports fail to have is the “so what” factor – the call to action for the report recipient so they know what key item they should be focusing on next month. With a sophisticated BI software tool, it would be as easy as marking your claims with errors number with red, or noting your PMPM stat with a down arrow. Adding a call to action for these reports will improve the value of your “bread and butter” reports.

Quality and Performance Analysis. Many payer organizations took quality and performance to the next level earlier in this decade with the Pay for Performance and Centers of Excellence programs. Reporting and analysis associated with these programs, as well as other programs such as HEDIS, has brought value to healthcare payers. As a result of these programs and the reporting and analysis, health plans have been able to be more predictive of measures that improve care, such as preventative medicine, while reducing cost to the health plan.

Data Mining. An argument could be made that this doesn’t quite qualify as an elegant application. While there is no question it has the potential to add value at any time, there is often a lack of visibility (unless a blockbuster is discovered). But, the most prevalent reason as to why this may not qualify has to do with the function of data mining itself. It can only provide value if the organization has invested in the right resources. I am not talking about software here; I am talking about the analyst. I can guarantee you, with little hesitation, that there is a gold mine of knowledge and value in your data. What I cannot tell you is where to find it. That is why a data mining expert or a senior analyst is needed. They have the expertise to find the hidden gems in your data. If you decide to support data mining, you have to be patient because data mining takes time. You will not find a quick hit value here, but your patience will be rewarded.

Electronic Medical Record (EMR) / Electronic Health Record (EHR). Many would assume that the value to these systems lies primarily in the hospital or clinic; but for healthcare payers, the value in these systems is a downhill effect of healthcare providers submitting claims in a standard format on a more frequent basis. Payment turn-around times are reduced, making it a win-win for all participants. Most dramatically, a wide adoption of EMRs would reduce medical errors and prescription drug errors, reducing cost pressures on the system. For patients, follow through improves. For payers that means that their members are getting timely, appropriate care and reducing costly adverse events.

Operational and Performance Dashboards. Dashboards are certainly not new in the business intelligence space. The application of dashboards to most healthcare organizations has not had the quick adoption seen in other industries. The value of dashboards is primarily delivered by the quick access to data (i.e., real time) and the powerful visualization of that data. These two things together deliver to the business user a meaningful tool with which to manage their business. It has certainly transformed some manufacturing companies where dashboards are used to visualize which lines are the most productive and what products are defect free.

The application to healthcare has been a bit more occluded. The concept of “real-time” data doesn’t really exist in healthcare, as most claims take a month to process. But, there is other data that could be displayed in a real-time dashboard such as call center data. Dashboards do not have to be exclusively used for real-time data, either. It’s possible to use the highly visual aspect of dashboards to highlight certain patterns in the data that are not obvious in a spreadsheet. The scenario described in the Fraud and Abuse section of this article would be a good example. While the data may not be real time, it may be quicker to find the pattern visually (higher volume of claims at a reasonable dollar amount) in a line graph than in just a series of data points in a spreadsheet.

Compliance. As with healthcare providers, payers are under the weight of compliance as well. There are so many compliance considerations that it’s unlikely one software application can solve all of them. The one thing that all of your compliance needs have in common is data, and your business intelligence program likely has the data they need. Of course, each compliance program is different and has different business rules that you are required to follow. But, if you look at the core of those requirements, much of the data is the same. You have an opportunity to use your BI program as the foundation for all your compliance programs. Not only would you have one source for all of your compliance reporting, but you would also have the ability to make reports from this data in between the submission dates, meaning that you could be in a position to know where your problem areas are six months before submission, rather than six weeks after.

Next Steps

Look for opportunities where your investment in business intelligence can be extended, perhaps into the fraud and abuse or EMR area. If you don’t have a BI program, then consider these applications of business intelligence as you start your planning process. Remember that the only limit to the application of your BI program is data availability and your imagination.

  • Laura MadsenLaura Madsen
    Laura leads the healthcare practice for Lancet, where she brings more than a decade of experience in business intelligence (BI) and data warehousing for healthcare, and a passion for engaging and educating the BI community.  At Lancet, she spearheads strategy and product development for the healthcare sector. She also works with key accounts across the country in the provider, payer, and healthcare manufacturing markets. Laura is the founder of the Healthcare Business Intelligence Summit, an annual event that brings together top hospitals, insurers, and suppliers in the healthcare business intelligence space. Laura is also the author of the popular book, Healthcare Business Intelligence: A Guide to Empowering Successful Data Reporting and Analytics (Wiley, 2012). You may reach her at lmadsen@lancetsoftware.com.

    Editor's note: More healthcare articles, resources, news and events are available in the BeyeNETWORK's Healthcare Channel featuring Laura Madsen and Scott Wanless. Be sure to visit today!

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