In an age of virtually infinite, readily available data, many say the insurance industry is rich in data and poor in information. Call it what you like – turning a large set of data (like an employer group’s medical claims data) into concrete, actionable items can be daunting. Analytical personality like mine or not, it’s easy to feel a bit overwhelmed. But when you find a way to use it to your advantage, it is a huge opportunity to stay ahead, excelling where other brokers hesitate to go.
Identifying important trends in the data is an art – one that, if mastered, can give you a serious leg up on the competition. Take Rick McKinley, who is head of the benefits practice at Lipscomb & Pitts Insurance in Memphis and the subject of June’s Employee Benefit Adviser cover story. He turned his data overload frustrations into competitive advantage using Zywave’s Decision Master Warehouse. As an early adopter of claims data analysis, Rick changed his conversation with clients from price to value and helped to triple the size of his agency.
Itching for growth like that? I have a five-step method for creating action out of data that will help you drive organic growth by delivering business-winning insight from your prospects’ claims data:
1. Discover: Identify a Problem or Opportunity
Let’s take the common issue of high emergency room utilization. Your prospects and clients probably already know this is a problem. The data they get may indicate costs related to ER seem high. It might even point to utilization as the driver. That’s a good start, but there is little takeaway. Your client is losing money – but how, exactly? And is there a way to counteract it? Here is your chance to step in and reveal a chance to save on insurance costs that other brokers might have overlooked.
2. Refine: Further Define or Question
This is the fun part where you can really unearth valuable information by digging deeper into the analytics. Decision Master Warehouse and some other insurance claims analysis tools offer a drill-down component that allows you to slice and dice into the data to answer or raise additional questions.
Continuing our emergency room example, let’s throw some common questions out there.
- Who is going to the ER: employee, spouse, dependent?
- What are they being seen for: colds, sore throats and other medically minor but personally traumatic ailments; or issues like heart attacks, strokes and broken bones?
Let’s say our deep dive into the data uncovers that a top reason for visiting the ER is those pesky ENT-related claims and that employees are the major offenders. Now we are cooking with gas – we have found an opportunity to truly impact a prospect or client’s bottom line.
3. Implement: Provide a Solution
Once you know where the cost drivers lie, provide targeted solutions. Whether this means a new benefits plan or a wellness program, find a specific way to solve the problem you’ve uncovered. Zywave happens to make things easy for our Partners (like Rick) to quickly access a large array of content designed to address various problem areas. Wherever you get your content, be sure it specifically addresses the issues you found in analyzing the data.
While still in your deep dive phase you can easily determine the type of documents to use and strategically schedule the use of those documents by examining utilization patterns. To continue our ER example, let’s say we select a piece on self care for colds and allergies as well as a helpful document to guide claimants in determining appropriateness of an ER visit versus a trip to urgent care. As an incentive for claimants to heed our advice and change their behavior, we may even recommend a plan design change, which brings us to the next step.
4. Value: Quantify the Solution
As you are walking through steps 1 through 3 with your client or prospect, it is safe to assume that the CFO in the room has one thing on his mind. What is this going to cost/save me?�
Have a specific answer ready. Good analyses should also include modeling. Zywave’s Decision Master Warehouse affords Rick and or other partners the ability to quantify proposed plan changes to quickly demonstrate potential savings associated with a higher copay, a switch from copay to deductible/coinsurance, or adoption of a CDHP – and it also shows human impact, or how many claimants will be positively or negatively impacted financially by such a change. When prospecting, follow your presentation with questions like:
- Given what you’ve seen, could your plan be better managed?
- What is your current broker offering to combat these costs?
- How much is your current broker making?
5. Evolve: Build a Lasting Relationship
As with all true change, this takes time. Once you’ve invested in tools and processes that allow you to be a true consultant – not just the middleman – to your clients and prospects, demonstrate to them why it’s worth it to stick with you.
- Build more insight over time by using multi-year comparative reporting
- Have meaningful discussions throughout the year, not just at renewal time
- Don’t forget the human touch. Check in with clients and prospects to get a read on whether their goals or focus change over time and be ready to switch gears.
With such a powerful indicator of your value at your fingertips, winning and retaining more business (not to mention transitioning to a fee-based model) becomes your new normal. That is the true value of claims data analytics in a nutshell – the bottom line.