Compliance Showcase: Predictive Modeling

DMEC Staff@Work

Using Predictive Modeling to Address Medical and Disability Claims

By Jung Ryu

National Accounts Practice Leader
The Standard

Employers recognize the benefit of maintaining a healthy employee population as a way to reduce absences, and they also recognize the cost associated with high-risk individuals. One recent finding reinforces their concern: 6% of the employee population with the highest health risk drives around 46% of an organization’s medical and pharmacy costs.1

One tool for tackling this issue is analyzing population health trends and pairing employee health information from data warehouses with predictive modeling capabilities, leading to more early interventions. The valuable insights gleaned from analyzing population health data are allowing companies to predict the probability of future medical and disability claims and help employees proactively address their health conditions before they lead to absence and lost work.

In turn, money saved from medical claims can be re-allocated for additional benefit programs that employees are increasingly demanding and for direct compensation increases to offset stagnating wages. Modeling initiatives such as these are leading to the next evolution in employee benefits.

Predicting Employee Health

While data warehouses and predictive modeling approaches have both been around for some time, integrating the two to effectively drive outcomes is unique in today’s marketplace. This effort is filling an important gap; employers can use many programs to track population health, but employers have had less success in using medical management tools to effectively manage the health of employee populations.

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