For all you database professionals out there, here’s a great article on a real-world use case of analytic data. The situation was as follows:

 The initial report breaks down the data into per capita spending, prices paid per service, out-of-pocket spending, utilization, and the mix or intensity of services used. The report covers data from 2010 for 33 million privately insured people.

What they found out was that it was the cost of the care provided and not the utilization that incurred the largest expense for the participants of the U.S. Health Care Cost Institute (HCCI), which included Aetna, Humana and United Health care.

Check out some of the metrics that they uncovered from analyzing the HCCI database of health care costs for the past few years. Comparative (past to previous) studies were also conducted.

Published on Business Finance (http://businessfinancemag.com)

Mining the Health Care Cost Database
by Joanne Sammer
Created 05/24/2012 – 17:50

A treasure trove of health care cost information is now available to researchers and others interested in understanding the trends and drivers of health care costs in the U.S. The Health Care Cost Institute (HCCI) issued its first Health Care Cost and Utilization Report based on data from three billion (yes, that’s billion with a “b”) health care claims provided by Aetna, Humana and UnitedHealthcare, three of the nation’s largest health plans, with Kaiser Permanente data to be added in the near future.

This database provides employers with important benchmarking data and opportunities to analyze trends in inpatient and outpatient care, professional services, and prescription drugs obtained by privately insured patients in employer-sponsored group health insurance plans. The initial report breaks down the data into per capita spending, prices paid per service, out-of-pocket spending, utilization, and the mix or intensity of services used. The report covers data from 2010 for 33 million privately insured people.

The key finding from this first report is the fact that it is the cost of care and not utilization that is the main driver of health costs. Although the overall use of health care services declined in 2010, overall costs did not. The spending increase in 2010 was lower at 3.3% for individuals under age 65 than it had been the prior two years, but it was still driven largely by prices for the privately insured that grew more than utilization. For example, prices increased significantly for two key elements of care – hospital care (5.1%) and ambulatory care facilities (10.1%). Meanwhile, usage dropped by more than 5% for medical inpatient admissions, emergency room visits, primary care provider office visits and radiology procedures.

Other key findings include the following:

• Average per capita spending on health care services was $4,255 for the entire sample, while per capita spending was much higher ($8,327) for people aged 55-64 and much lower ($2,123) for those under 18.

• Out-of-pocket per capita spending was $689 in 2010, which represents an increase of 7.1% from 2009.

• The price for an average hospital stay increased 5.1% to $14,662 in 2010, while the cost of an average emergency room visit increased 11% to $1,327. The latter figure emphasizes the potential payoff for any employer effort to reduce unnecessary emergency room visits, particularly if patients rely on the emergency room for non-emergency situations.
• The average cost of a prescription increased 3% from $80 to $82 in 2010, as brand name drug prices increased 13% and generic drug prices decreased by 6.3%. On average, each insured person filled more than nine prescriptions in 2010. The number of brand name prescriptions dropped by nearly 4%, while the number of generic prescriptions increased by 2.5%. Once again, this data shows the potential cost savings associated with efforts to encourage the use of available generics in lieu of brand name drugs.

Overall, costs to provide the same amount of care as in the previous year went up drastically. It isn’t that many more people are getting older and more frail, nor is it an increasing trend in hypochondriac activity. People are asking for care as much as they always have, and it’s just that the care provided costs more to deliver for one reason or another. Interesting find for the analytic teams involved…