Insurers gather large amounts of data about plan members’ actions every day. Using the information to improve benefits plans is the hard part.
Data has traditionally been used retrospectively. On the drug side, it’s used to get information on top drugs by claims, dollars or average dispensing fees; which pharmacies (independent or chain) members use; and the categories of medication they’re using the most. On the disability side, plan sponsors can see employee claims, status and expected return-to-work dates.
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Big data means using large amounts of information such as drug claim or demographic statistics and analyzing it to find trends or patterns. Data can also give plan sponsors more insights into how their plan design decisions impact members’ behaviours. Sponsors then use that data to tweak their plans.
“There’s a shift from looking at historical data to seeing how to use data to improve plan design,” says Shawn O’Brien, vice-president, national business analytics leader, health and benefits, with Aon Hewitt. He expects more advanced predictive models will be built to help plan sponsors see future risks.
Working well
The hope is, data can also provide employers with information on their plan members’ risk factors and help make preventive and wellness programs more effective. Insurers can layer demographic and disease information to indicate what kind of health and wellness tools might be the most beneficial, and data will be a key driver of these decisions.
For example, if an employer sees a lot of spending on antidepressants, the company can emphasize mental health support in its wellness programs, explains Karen Mason, senior vice-president, group, with Equitable Life of Canada.
Or, an employer could cut the data demographically and look at its older workforce to target who may need information on ways to control risk factors for heart disease (as the risk of developing it increases with age, especially in men over the age of 45.)
Matt Miles, vice-president, product and marketing, group benefits and retirement solutions, with Manulife Financial, believes there’s a place for plan members using wearable devices. The devices — including Jawbone, Fitbit and the upcoming Apple Watch — can track behaviour, such as the number of steps they take, their heart rate and how many hours of sleep they’re getting.
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Take BP Canada, for example. Its employees can get an activity tracker to track the number of steps they take each day. They also earn points for different activities, such as getting an annual physical or enrolling in a smoking cessation program. Workers can earn additional flex credits to spend on benefits coverage or take as cash.
Employee wellness is becoming more important to employers because unhealthy behaviours are drivers of chronic disease. A 2014 Memorial University study shows adult obesity in Canada jumped from 6.1% to 18.3% between 1985 and 2011. And Statistics Canada notes 62% of men and 45% of women are classified as either overweight or obese. Obesity is a leading cause of chronic conditions, such as high blood pressure, heart disease, arthritis, cancer and Type 2 diabetes.
And the Government of Canada notes Type 2 diabetes is growing fast, with 60,000 new cases annually. Nine out of 10 Canadians with diabetes have Type 2, which is largely preventable by making healthy lifestyle choices. The Public Health Agency of Canada says 60% of Canadians over the age of 20 have a chronic disease, and an additional 20% are at risk of developing a chronic condition.
David Willows, vice-president, strategic market solutions, with Green Shield Canada, says there has historically been a focus on high-cost drugs but thinks there should be an equal focus on managing high-cost drugs and chronic disease management. And data can play a pivotal role.
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A few years ago, his company noticed a rise of chronic disease in its drug claims data and saw high uses of cholesterol and hypertension medications among employees in their 40s, 50s and 60s. Also, as much as half of them weren’t taking their medications properly.
The company did a study where, over six months, a group of its plan sponsors’ members spoke with a pharmacist who educated them about the causes of hypertension and coached them on drug adherence. The other group had their medication prescribed as usual. The results showed those who received counselling were able to get their blood pressure under control at a much higher rate.
The company has also launched a pharmacist health-coaching program, which will be a standard part of all its benefits plans.
The challenge for smaller plans
Larger plan sponsors will likely benefit more from using data and analytics compared to smaller ones. They will have more claims use and demographic data, and larger data sets mean more accurate outcomes when building models, says O’Brien.
Smaller plans might not have access to as much advisory and consultant support. Or they might not have enough people to sift through and analyze the data. And, compared to a larger employer, it may be more difficult to spot trends. While this may be challenging, Willows doesn’t think that should discourage them — he thinks they should try to get hold of whatever data they can.
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Privacy can also be an issue. “The industry needs to proceed cautiously, particularly with small companies or for rarely used specialty products,” says Mark Rolnick, assistant vice-president, product development, group benefits, with Sun Life Financial. “Due to confidentiality, we can’t have situations where a company knows which drugs specific individuals are taking.”
But not all worry privacy will be a big issue for plan sponsors. “You don’t need to look much further than Facebook to see how willing people are to disclose what’s happening in their personal lives,” says Miles.
Data driven
Securely protecting plan member information is an ongoing area of importance, says Rolnick. A number of high-profile companies have been hacked recently, including Sony and Target. And, earlier this year, U.S. health insurer Anthem was a victim of hackers who obtained personal information (e.g., names, birth dates, addresses, social security numbers and employment information, including income data) from its current and former members.
Another issue is getting the right data. Plan sponsors get drug data and disability data on their plan, and many are looking for the connections between these two types of expenses. “This is an opportunity for the industry to better understand the linkages between drug claims and disability claims,” Rolnick adds. “The short-term challenges are obtaining appropriate member/sponsor permissions and getting the data warehouses working in such a way that you can mine it appropriately.”
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O’Brien says plan sponsors are looking for an additional comprehensive analysis of their plan data because they realize any decisions regarding plan changes must be grounded in fact. “Advanced, transactional-level claims and demographic analysis will help pinpoint the variables driving cost and utilization so plan sponsors can determine where best to focus in order to optimize the benefits program,” he explains.
In the future, O’Brien predicts there will be more and more dedicated analytics-type teams — on the consulting side or on the insurer side — given the demand for data and using that information for actual insights. However, few benefits consulting firms in Canada have invested in building dedicated analytics infrastructure to ensure their clients have the decision support information they need.
“Some consulting firms and insurers outsource to vendors that can provide this level of analysis, keeping the process at arm’s length,” he explains. “The downside with this model is, plan sponsors also may not have ready access to the data when they need it, as the analytics are not done in-house.”
Big data may also help plan members make selections based on their age or what other members are doing. “I think we’re going to continue to see more self-service being pushed toward members through technology, allowing them to be that much more engaged and directly interact with their plan,” Miles explains.
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“I think there’s an opportunity down the road to use big data to develop more targeted offerings to individual plan members within a group,” adds Mason. “And to combine that with sort of best-in-class digital marketing techniques — a little bit like Amazon.com. I can see that being the future in group benefits.”
A 2013 McKinsey report says 35% of what Americans buy on Amazon and 75% of what they watch on Netflix comes from recommendations based on what other consumers bought or viewed. While it might not be happening now with group benefits, Mason predicts big data will help employees get a more customized, personal experience out of their benefits plan.
Willows thinks there’s an opportunity for insurers, plan sponsors and consultants to come together and be more creative around the strategic use of data.
“We tend to be a pretty slow-moving, conservative industry. But the environment and the challenges in the healthcare system will likely drive us to quicker change than maybe we’ve traditionally been comfortable with,” he says. “I think it’s coming.”
Craig Sebastiano is associate editor of BenefitsCanada.com.
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