ODS improves its information health with SAS® Business Analytics

US health care expenses have exceeded 17 percent of the country's gross domestic product (GDP). With health care costs rising faster than the rate of inflation, understanding how and why funds are spent has become a central focus for government regulators, insurers and providers alike. For claims-paying insurers like ODS, accurate analysis and reporting are critical to managing financial risk and understanding what claims are being paid, to whom and for what.

Founded in 1955, ODS is Oregon's oldest dental and medical insurer, providing coverage to more than 1.5 million members with a full range of medical and dental plans for employers and individuals.

Recently, the Actuarial and Analytical Services team at ODS undertook a significant initiative to improve its reporting and analysis environment. As a result, the team can efficiently deliver accurate and insightful information to company groups, such as provider relations, marketing, finance, claims processing and member services.

As both an insurer and third-party administrator of claims -- for employers who self-insure their employees -- ODS and its clients are benefiting from the insights and reporting enabled by an integrated business analytics solution from SAS. Now, ODS can easily integrate, manage and access data for mission-critical analysis and reporting.

"We're no longer doing the basics of adding up," says Rebecca Owen, Director of Actuarial and Analytical Services at ODS. "And we're using resources more effectively and efficiently. What used to take hours for one person to perform is now done a lot quicker, along with 12 other things. As an example, a stop-loss calculation that used to take three-and-a-half hours now runs in six minutes. These are the sorts of gains we see. It's really changed how we get things done; we're doing so much more and at such a different level."

Information challenges
Owen, who has a long history of using SAS at other companies, was more than familiar with the extensive capabilities and strength of the software and recommended it as the foundation for ODS' information delivery environment. ODS has a variety of users -- ranging from sophisticated analysts who build models for prediction and forecasting, to casual report consumers who use the power of SAS through Microsoft Office tools. Owen's team helps the organization better understand and manage things such as cash flow, reserve calculations, income and expenses by line of business, and the team delivers multidimensional financial reports to the various business groups.

Faced with the information challenges of a growing and increasingly complex health care system, SAS enables the Actuarial and Analytical Services team to deliver information regarding Medicare and Medicaid for state filings, as well as multidimensional cost and utilization analysis by provider, group, product, geography, disease category and severity. Risk status reports, based on episode risk groupings (the 3-M ERGs) allow the insurer's Provider Relations team to look at cost per case or per episode, while helping to identify potential candidates who would benefit from a disease management program. When acting as a third-party administrator for claims processing, ODS provides clients with information such as average cost by type and depth of service and by provider (e.g., specialist, hospital or pharmacy).

Interesting discovery
Owen says the discovery capabilities in SAS have already helped uncover some interesting findings, including the sudden emergence of sleep studies throughout the state of Oregon. Until then, there hadn't been much discussion about what constitutes a sleep study or how much it should cost. The management team, she says, was surprised by how quickly incident rates had appeared. Because of her team's discovery, sleep study benefit designs, maximum allowances and a different level of pre-authorization for the studies were established and communicated to ODS' membership.

"You need software that provides guidance about what questions to ask, so that things pop out at you and produce 'aha!' moments," explains Owen. "That was the first incident using the software that people stood up and took notice. We've never had the capabilities to drill down and look at things like that. It's essential to managing and understanding a broad network that you have tests like these that can automatically look for outliers and trends."

Owen says reaction to the business analytics environment has been quite positive from within, and user capabilities have been profoundly affected.

“One person on my team said he ‘swooned’ when he saw what he could do. I felt badly that they couldn’t do these things in the past,” recounts Owen. “Our controller feels he is in a much better world with access to so much more information. He can ask the questions he needs answers to.  As a result, he is more confident in his reserve reporting and he doesn’t have to hold as much margin as in the past. The chief actuary said he didn’t know what we would do without the system. For him it’s a profound change that has completely altered how he does his work. We gave him the Excel add-in, and he is able to directly and immediately query details on line-of-business results in as much detail as he wishes, without having to ask for help or needing to remember a large and abstruse data dictionary of acronyms.”

Managing data with ease
SAS' ability to quickly and easily cleanse and integrate data from ODS' 12 source systems -- such as FACETS, for claims processing - was integral to enabling the reporting and analysis environment. Data integration processes from SAS helped the insurer get up and running quickly, which was crucial to helping deliver the information requirements that were promised to a new, 100,000-member client that signed on during the implementation.

"We were able to deliver the first set of answers the week after the implementation," says Owen. "Within six months, we met with them on their renewals and were capable of discussing the costs and utilizations for their group going forward."

Addressing health reform
SAS has also helped ODS address the new challenges posed by health care reform in the US.

"Without the SAS environment, I don't think we could have faced health care reform," explains Owen. "We've improved employer support and we're now capable of doing good ROI analysis for health care services and disease targets. Based on specific criteria, we can now look at one hospital versus another and identify which one is more cost-efficient. Instead of having one person taking a week to look at a particular service with a spreadsheet, we can immediately look at underlying drivers of a problem instead."

Owen gets excited when she ponders what's possible with the new SAS environment. She is currently participating in a new partnership between five health plans, 18 providers and a state agency to pilot a medical home program. The goal of the pilot is to determine which providers would deliver the program and who in Oregon's population would benefit from the care. She says that this type of work will especially benefit rural area populations by providing better access to coordinated care and helping patients navigate the complexities of the American health care system.

"SAS is just so robust," declares Owen. "You can feed it all sorts of data to make it do things -- almost anything. It's quite user-friendly for the entire gamut of users, and it's the standard for many calculations. Thank goodness we chose a system that will grow with us."

The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.

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