At a time of unparalleled complexity in employee benefits, data has become one of the most important factors in both holding down costs and ensuring quality of service. So, for self-funded health plans and other purchasers, data warehousing and analytics have become an important part of providing benefits.

The additional complexity of these areas can seem overwhelming, and employers are usually dependent on third-party platforms to help with data management and analytics. A new report from Catalyst for Payment Reform (CPR) outlines practical steps employers and other purchasers can take to find the best partners in data management.

"The State of the Data Warehouse and Analytics Marketplace Report," recently released by CPR, used input from purchasers, researchers and industry insiders to outline some of the best practices in data warehousing and analytics. CPR is a nonprofit purchasing group with members such as 3M, Mercer, Wells Fargo, and several state health care plans.

New marketplace realities in data management

The report begins by recognizing the new developments purchasers are seeing in the marketplace. "Today, purchasers grapple with rising health care costs, uneven quality, and a consolidated provider market," the report said. "Purchasers are pursuing a variety of strategies, including encouraging plan members to use accountable care organizations, direct contracting, tiered network designs, reference-based pricing and contracting, on-site or near-site clinics, value-based insurance design and prioritizing the analysis of total cost of care over network discounts. More than ever, purchasers need to be able to slice and dice their data to support these new strategies."

Data security is a top priority, the report said, and going into any relationship with a vendor should include an understanding of who owns the data being used. Does the vendor consider some data proprietary? What happens to the data if the vendor is acquired by another company, or if it goes out of business? Questions over use of data for benchmarking for vendors have also come up.

The report notes that new platforms may have different approaches to using data from years past. "Purchasers can evaluate the power and limitations of each vendor's platform by viewing the timeliness of complex data querying as part of a vendor demo or by experiencing it first-hand by using a dummy login," the report said. "In addition, purchasers should evaluate for how long vendors store data for immediate analysis and at what point it archives or auto-purges data – CPR uncovered differences across vendors in its analysis."

User experience—from the workplace to the board room

The report notes that user-experience considerations will be different for different users—a CFO will use data differently from the HR department, which will have different needs than the employees accessing benefit platforms. Looking at how vendors tier their data management interfaces could be useful to purchasers.

"A satisfactory user experience could mean something different to each user," the report notes. It also stresses that some platforms could be considered self-service, while others have various levels of vendor support. "A purchaser should consider its internal analytics skills, staff bandwidth, and how intensely it plans to analyze the data," when judging how much vendor support it will require, the CPR report added.

Separating actionable data from the clutter

"Analysis paralysis is real," the report noted. "Purchasers experience a constant overload of new information, and knowing which information warrants concrete action can be a challenge." There are still challenges in this area; for example, vendors still have trouble delivering meaningful quality and cost data. And there are still many issues in working with providers to coordinate data benchmarks and standards.

The report concludes by identifying a number of future challenges: these include price increases being driven by monopolistic practices and the growing incidence of chronic disease.

One of the report's interviewees noted that as important as data on populations has become, the individual should not be overlooked.

"Each patient is unique and health care providers aren't looking at algorithms to determine diagnosis–they're truly trying to understand their patients holistically," said Deb Alexander, Director of Product and Analytics for Optum. "Data and technology have purpose, but should not be the end-all be-all for managing patient care, defining health benefits, or identifying opportunities for cost savings."

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Warehousing data: Considerations for purchasers working with vendors

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