Blue Cross Blue Shield of Rhode Island New
Blue Cross & Blue Shield of Rhode Island New Approaches Focusing on Dynamic Variables Related to Changes in Member’s Health Status Suizhou Xue September 2008
Background and Objectives • Predictive Modeling at Blue Cross & Blue Shield of Rhode Island • Predictive Modeling for Underwriting: Small Group and Large Group • Predictive Modeling for Case Management • New Approaches on Dynamic Variables for Early Identification • Predictive Modeling for Disease Management • Blue Health Intelligence for Risk Analysis 2
History of Predictive Modeling at Blue Cross & Blue Shield of Rhode Island Timeline 1990 s Rules based predictive models used for Case Management identification 2000 Began researching Predictive Modeling/Data Mining methodologies and software 2001 Developed Predictive Models for Case and Disease Management using statistical methods 2003 Beta tested Johns Hopkins Predictive Modeling Software Incorporated Johns Hopkins Predictive Models output into Case and Disease Management Initiatives 2006 Incorporated Predictive Models into Underwriting process 2007 Health risk appraisal data included in Predictive Modeling process Incorporated detailed Pharmacy Data into Predictive Modeling process Included Dental data in Predictive Modeling process when available 2008 Remodeling Process for Disease Segmentation Introduced dynamic variables to identify changes in member health status for earlier identification Implemented BHI Risk Score Benchmarks into Account Reporting & Analysis 3
Technology of Predictive Modeling • Johns Hopkins Predictive Models based on both Diagnosis (Dx) and Pharmacy (Rx) Information • Angoss Knowledge. STUDIO Predictive Model / Data Mining • Combination of software allows for customization and inclusion of claims, PHA, gaps in care, biometric and dynamic variables • Blue Health Intelligence DCG Benchmark and Statistics 4
Blue Cross & Blue Shield of Rhode Island Distribution of Members by Product Type Other 6% Individual Programs 3% Medicare 11% Large Account (Size > 50) 65% Small Account (Size < 50) 15% 5
Small Group Underwriting Many Factors Involved in an Account’s Final Rates Pools Experience Trends Medical Risk State Regulations Final Rates Admin. Expense Reserve Contribution 6
Small Group Underwriting - Testing Mode • Scored individual members by ACG Predictive Modeling Score (PM) and Manual Medical Underwriting Points (MU), and summarized to an account score • Compared raw scores and ranking of account PM vs. MU • Correlation coefficient of about. 70 • Created a Set of Conversion Parameters between PM and MU through regression 7
Small Group Underwriting - Implementation • Implemented for 4 th quarter 2006 cycle accounts • Developed supporting system for ongoing outlier review and virtual medical record access • Outlier criteria includes: extreme PM values and loss ratios • Medical Underwriting reviewed 15% of accounts based on criteria • Only modified 3% of those reviewed • Successfully delivered final score July 2006, and replaced manual medical underwriting system 8
Small Group Underwriting – System Support 9
Small Group Underwriting – System Support 10
Small Group Underwriting - Results • Reduced cycle timeframe from 6 to 3 months • Allows for more current claims experience • Reduced Medical Underwriting Staff • Improved accuracy of Medical Underwriting • Improved consistency and justification of results • Coordinated Corporate Predictive Modeling activities 11
Small Group Underwriting - Evaluation Actual Expense Consistent with Rating 2 nd Quarter 2007 Results Related To Median 12
Large Group Population BCBSRI’s Large Group Market – 385, 000 Members – 550 Accounts % of Members % of Accounts Account Size 13
Large Group (IER) Predictive Modeling General Process • Produce electronic file with Predictive Modeling scores for each account in rating cycle • Relate PM scores to specified comparable population • Two comparable statistics for each account provided to underwriters – Percent difference between account’s overall PM score and the community score – Percent difference of account proportion of high risk members compared to communities’ proportion of high risk members 14
Underwriting for IER Commercial Renewals Predictive Modeling Claims Incurred 01/2007 – 12/2007, Paid 12/2007 Account Information Account Number Self Funded Tony’s Incorporated 959 PM (Relative to Commercial Pool) Cycle Total Contract Total Risk Score % High Risk Y May 431 +9. 62% +64. 91% Metro Properties N May 57 +8. 58% -24. 56% 3943 Leah Cosmetics N June 59 +34. 89% +7. 02% 5 V 53 Goldmine Jewels N June 164 -8. 27% -14. 04% 100444 Colonial Groceries N June 84 -11. 73% -3. 51% 3129 Eric Simmons, Inc. N July 231 +18. 48% +46. 49% 1 A 126 Michelle & Co. N July 1, 308 +5. 18% -10. 53% 102329 Califano Group N July 1, 606 -26. 19% -50. 00% Total Quarter 16, 102 +1. 23% -0. 88% 4 H 07 Account Name 15
Case Management Objectives: • Identify members who are likely to be high risk/high cost in the future • Drill down to explain the major components that contribute to the risk factor • Intervention – Members whose health can be improved – Members who are most likely to incur future cost savings – Collaborate care 16
Case Management – PM Status Predictive Modeling Member • Demographic Information • Cost Distribution • Predictive Modeling Risk Probability • Hospital Dominant Marker • Disease and Condition Profile • Virtual Medical Record - By Type of Service - Chronological • Case Management / Disease Management Information • Quarterly Update 17
Case Management - Challenges in Predictive Modeling: • Enhance model for predictive accuracy, and reduce false positive members • Early identification for members whose health status could be changed in the future • How can the predictive modeling program maximize its value to the case management program • Actionability • Timing and scope of intervention 18
Case Management – Future Health Status Prospective Member Health Status: • It’s critical for Case Management to identify the members who will change health status in the future for possible early intervention • Medical claims, especially pharmacy data incurred 6 months or less, instead of 12 months, were sometimes used for Case Management. It was considered that the recent claims experience was strongly associated with future health risks • Generally speaking, a disease or condition is changed within a certain analysis period. Prospective expense for the coming year will be different depending on the conditions incurred in the beginning of the year and end of the year • Should consider weighing the conditions incurred in different analysis periods 19
Case Management – PM Enhancement Test Predictive Modeling – Dynamic Variables • Introduced dynamic variables: those variables change their values during the period of claim experiences, such as medical utilization, visits and tests. They can be expressed as their values, rankings, or moving ratios by quarter or month, for example, quarterly medical expenses and their moving ratios (4 th qtr expense vs. 3 rd qtr expense, etc. ) • Combination of ACG Predictive Modeling results, utilization, measures, and dynamic variables allow us to customize the plan data and build the enhanced predictive models: Neural Network and Decision Trees • The dynamic variables, featured at the end of the claims period are displayed near the top of the splits in the Decision Tree Predictive Model. Similarly, the dynamic variables also showed the strong contribution in the Neural Network Predictive Model 20
Case Management – Predictive Modeling Decision Tree 21
Case Management – A New Approach Predictive Modeling – A New Approach • The strong prediction power of the dynamic variables implies that the prediction accuracy will increase progressively from past to present medical experiences; the current claims reflect more in member’s future health status • We tested three models for the latest claims for early identification: 1) ACG predictive modeling with local calibration; 2) Customized model by neural network; and 3) ACG predictive modeling • Moved from quarterly, monthly, bi-weekly to weekly. The members selected for Case Management intervention are those with a probability difference of 0. 7 between current weekly results and quarter base file. • Implemented the weekly predictive modeling results into Mc. Kesson Disease Monitor System. The exception rule of the system makes more efficient use of the predictive modeling results 22
Case Management – System Implementation Predictive Modeling – Disease Monitor File Claimno Line. N Memberid Field break Proc code Field break 2 From date Field break 3 Service type 200804000032 BCBSRIMEMB 0031 ||||||||| PMCMH ||||| 20080422 |||||||| PM DATA 200804000033 BCBSRIMEMB 0032 ||||||||| PMCMH ||||| 20080422 |||||||| PM DATA 200804000034 BCBSRIMEMB 0033 ||||||||| PMCMH ||||| 20080422 |||||||| PM DATA 200804000035 BCBSRIMEMB 0034 ||||||||| PMCMH ||||| 20080422 |||||||| PM DATA 200804000036 BCBSRIMEMB 0035 ||||||||| PMCMH ||||| 20080422 |||||||| PM DATA 200804000894 BCBSRIMEMB 0893 ||||||||| PMCMM ||||| 20080422 |||||||| PM DATA 200804000899 BCBSRIMEMB 0898 ||||||||| PMCMM ||||| 20080422 |||||||| PM DATA 200804000900 BCBSRIMEMB 0899 ||||||||| PMCMM ||||| 20080422 |||||||| PM DATA 200804001632 BCBSRIMEMB 1631 ||||||||| PMCML ||||| 20080422 |||||||| PM DATA 200804001634 BCBSRIMEMB 1633 ||||||||| PMCML ||||| 20080422 |||||||| PM DATA 200804001635 BCBSRIMEMB 1634 ||||||||| PMCML ||||| 20080422 |||||||| PM DATA 200804003939 BCBSRIMEMB 3938 ||||||||| PMCMA ||||| 20080422 |||||||| PM DATA 200804003944 BCBSRIMEMB 3943 ||||||||| PMCMA ||||| 20080422 |||||||| PM DATA 200804003945 BCBSRIMEMB 3944 ||||||||| PMCMA ||||| 20080422 |||||||| PM DATA 200804003946 BCBSRIMEMB 3945 ||||||||| PMCMA ||||| 20080422 |||||||| PM DATA 200804003947 BCBSRIMEMB 3946 ||||||||| PMCMA ||||| 20080422 |||||||| PM DATA 23
Case Management Results (Challenges) in Predictive Modeling: • Enhance model for predictive accuracy, and reduce false positive members – Combined ACG predictive modeling results and other measures including dynamic variables. Decision Tree and Neural Network models increase the prediction accuracy • Early identification for members whose health status could be changed in the future – Reduce time to weekly engagement in Predictive Modeling • How can predictive modeling program maximize its value to case management program – Implemented the results into Mc. Kesson Disease Monitor System • Timing and scope of intervention – Produced weekly member list with the highest risk scores, and grouped members in different risk tiers for weekly intervention 24
Disease Management Objectives: • Identify members who are likely to be high risk/ high cost in the future within a disease segment • Diabetes, Asthma, Heart Disease, Hypertension, Cancer, Depression, etc. • Co-morbidity • Stratification of risk score for intervention 25
Disease Management - Diabetes Medical Expense Distribution 26
Disease Management Predictive Modeling – A New Approach: • The difference in expense distribution between general commercial population and specific population indicates that it’s necessary to build a new model for a disease population rather than use the model for commercial population • The lack of sufficient population size prohibits us from calibrating model locally for a specific disease • Combination of ACG predictive modeling results and inclusion of utilization, measures, and dynamic variables, etc. allows us to build the robust predictive model through neural network and decision trees 27
Disease Management - Results Predictive Modeling – Results: • The customized model for diabetic members increases nearly 20% of predictive accuracy compared to the general predictive model for commercial population • Stratification based on the predicted risk score and evaluation of co-morbidity • Produce a member listing for intervention 28
Disease Management - Diabetes 29
Blue Health Intelligence – Risk Analysis DCG Risk Scores • Brings together the claims experience of 79 million BCBS members nationwide • Detailed DCG risk score benchmarks by geography, industry and company size • BCBSRI analytical team will be actively incorporating BHI DCG risk score benchmarks into analysis and reporting 30
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