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1 s Future Depends on Data-Driven s Future Depends on Data- Driven Insights into Individual Behavior 1

2 s Future Depends on Data-Driven Table of Contents 2 Abstract 3 Part I: The Link Among Data, Analytics and Retail Health 4 Part II: What Can Be Done 5 Part III: How It Gets Done 6 Precise Data-Driven Decisions Hold the Key to Personalized Service 6 About the Author Abstract Health plans and insurers know that to thrive over the next 3-5 years, they must dramatically improve their ability to engage with individual consumers. Specifically, they must: ~ ~ Understand, segment and effectively reach individuals entering the market in the wake of the Affordable Care Act. ~ ~ Strengthen relationships with existing members and reconnect with past members. ~ ~ Enable and encourage individuals to take better care of their own health and healthcare needs. ~ ~ Provide employers with tools that can help their employees make more effective healthcare decisions. The combination of Teradata products; an integrated data warehouse, Aster big data analytics and Aprimo integrated communication management, creates actionable analytic capabilities unparalleled in its ability to help companies achieve these goals. This white paper details how health plans and insurers can use Teradata to succeed in today s healthcare environment. 2

3 s Future Depends on Data-Driven Part I: The Link Among Data, Analytics and Retail Health It s no secret that healthcare reform and longstanding industry pressures are changing the way health plans and insurers conduct their business, shifting the focus to individual consumers. A number of things are forcing this shift. First, government and private reform efforts most notably the Affordable Care Act (ACA) are trying to address access to care by extending coverage to millions of Americans who were previously uninsured. Second, the healthcare industry has long been aware that the cost of care in this country is too high. A recent Institute of Medicine report found some $750 billion in waste annually in six major categories: unnecessary services; inefficient delivery of care; excess administrative costs; inflated prices; prevention failures and fraud. 1 Health plans and insurers are consistently engaged in trying to unearth ways to address these concerns. They need data-driven insights to understand and engage their members, identify the right providers and create motivated and empowered consumers who can play a key role in reducing costs. Third, consumer expectations are changing dramatically as they engage with their health and healthcare in entirely new ways. They are demanding choice, tailored product offerings and detailed access to reliable information to help them manage and make better decisions about their health and healthcare coverage. This is occurring even as the drive to control costs is squeezing health plans budgets. All three factors have spawned a number of potentially disruptive initiatives that are increasing the focus on the individual, including: ~ ~ Payment reforms (bundled payments, pay-forperformance, etc.) aimed at paying for outcomes and value rather than services ~ ~ Accountable care organizations and patient-centered medical homes ~ ~ Improved care management for patients with chronic conditions ~ ~ Tiered networks that help incent patients to use the highest quality and most effective providers ~ ~ Innovative benefit designs ~ ~ Health Insurance Exchanges ~ ~ Health Information Exchanges ~ ~ Information-rich member portals on company websites To differing degrees all of these efforts rely on how well health plans can harness and analyze massive data volumes that are accumulating with breathtaking speed and then successfully put the new insights to work. The path to success in the era of retail health is forged by the use of an information technology infrastructure to deliver a single view of an individual to a variety of internal and external stakeholders. Unfortunately, despite doing some things very well, most health plans and insurers have not yet made the necessary transition. They may have a good view of a member tied to a contract as well as accurate and complete claim information but very few have all information about individual members or prospective members in a single place. Nor do most have a good handle on a member s lifecycle within the company, because identifiers are tied to policies, not individuals. In addition, many struggle to incorporate emerging data sources, such as clinical data from electronic health records (EHRs) and consumer-based information that delivers critical insights about lifestyle choices. Predictive analytics and data mining technologies are not widely or effectively leveraged in healthcare, despite their remarkably sophisticated use in other industries such as retail, financial services and social media. Consequently, most companies have little sense of how separate departments are interacting with a single person, which undermines the ability to engage effectively with individuals, much less properly manage a population s health. If somebody calls customer service and the person answering the phone can t see prior interactions, he or she is operating in the dark as to how best to engage the caller. If companies can t identify potential health risks early or understand how best to engage people in preventive and chronic disease management programs, how can they effectively lower the costs of care and improve people s health? 3

4 s Future Depends on Data-Driven Part II: What Can Be Done The next generation of health insurance demands that precisely segmented consumer groups receive tailored value propositions that align features, price, brand and channel. And that is just the starting point. From there, health insurers must continually and positively engage these consumers in every interaction they have with the company. The good news is that today s tools enable health plans to do just that to use the data they have more effectively, and incorporate new data sources that fuel a more granular approach to marketing, customer retention and health management throughout the consumer lifecycle. By building on and learning from advances in other industries, health plans and insurers can employ proactive analytical and integrated marketing tools that can more effectively engage customers across every conceivable channel from snail mail to , the web, social media and mobile applications. Numerous examples are already emerging. ~ ~ Proper use of data and analytics can lead to timely, event-based outbound communications with targeted product offers to individuals by gender, language, age, health status, number in family, employer, line of business, geography and/or income level. ~ ~ Companies can offer consultative product selection, including enrollment assistance in the appropriate product based on financial and health needs and confidently streamline the underwriting process for low risk prospects. ~ ~ Onboarding efforts can ensure properly targeted materials, including patient education specific to people s health status. Even with people who have limited claims experience, companies can quickly gather the needed information and lock appropriate health management strategies in place, including wellness/prevention programs and chronic disease management. Smart, targeted efforts can help transition people from brand-name pharmaceuticals to generics. ~ ~ Health plans and insurers also can leverage in-bound communication and event triggers picked up at almost any point of contact to target health management strategies as well as cross-selling opportunities and new product offers and renewals. ~ ~ Health plans and insurers can use their data and analytics to better understand provider profiles and geographic factors to inform contract arrangements and understand how to steer consumers to the highest quality and most efficient providers. They can do this with new levels of detail and insight that can help better engage all providers in delivering more efficient care and all members in finding the best providers. ~ ~ And as Health Insurance Exchanges are established in 2014, health plans and insurers can use data and analytics to effectively mitigate the risks associated with these exchanges. They can, for example: Manage member turnover by using non-traditional data sources to understand preferences and then delivering the right communications in the right amount at the right time to the right person through the right channel. Effectively manage adverse selection by having the right health management strategies in place based on reliable consumer profiles. Compete effectively on quality, efficiency and price by employing behavioral analytics to properly segment members, understand provider profiles and geographies, and be responsive to member needs in ways that strengthen the brand. A strategic effort that combines all or most of these elements would be a powerful competitive advantage in the era of retail health. And companies can help ensure a more successful effort by also using their data and analytics framework to answer key questions that include: ~ ~ How will consumers make purchase decisions in a more transparent, less restrictive market, especially one mediated by online exchange? ~ ~ Which consumer segments will be most attractive; what will it take to identify, activate and retain them? ~ ~ How can risk be managed in the absence of experience with this new segment? ~ ~ How should investments be staged to preserve scarce capital? ~ ~ What will be needed to attract individual consumers? ~ ~ What cost structures will be needed to offset the downward pressure on margins and capital? 4

5 s Future Depends on Data-Driven Part III: How It Gets Done Gartner has said companies that develop an effective integrated marketing management strategy will deliver a 50% higher return on their marketing investment. The technology exists today to realize those returns. The best example is the combination of Teradata the industryleading data warehousing analytics platform, with its data analytics units Teradata Aster and Aprimo. It begins with making the most of traditional models and traditional data sources. For this, the Teradata advantage begins with its industry-specific Logical Data Model (HC LDM), which makes data integration considerably more efficient. Just like blueprints describe and detail a floor plan of a building, the HC LDM details how data moves and interrelates within an organization. Teradata also enables in-database processing with SAS, which eliminates massive data movement and makes it possible for organizations to perform complex analyses of large data sets at ultra-fast speeds so that they can leverage their data for advanced analytics in ways that were previously impractical or impossible. Next, companies must layer what is known as big data complex, multi-structured data types that do not fit neatly into rows and columns on top of their traditional data. This is where Aster comes in. Aster is a discovery platform that helps uncover valuable insights and unlock new value from all data, both structured and unstructured. Pre-built analytic functions transform big data into insights, helping companies fully extract the value of that data. Answers to key questions like who is likely to disenroll and what interactions with a health plan commonly precede disenrollment are derived using the npath function in Aster. This analysis highlights when it s critical to take action to retain valuable members a considerably more effective insight than conventional approaches. In contrast, when conventional solutions try to transform multi-structured data by exporting data sets and creating STRATEGIC INSIGHT AND MARKETING/COMMUNICATION PROCESSES SEAMLESS CONSUMER ENGAGEMENT SOURCE DATA APRIMO MULTI-CHANNEL MARKETING/ COMM. MANAGEMENT. CHANNELS Web CUSTOMERS External Data Member/ Patient Claims Teradata Customer Data + External RDBMS HCLDM Consumer-Centric Data Management Assets Campaign Design APRIMO MARKETING OPERATIONS Workflow and Rules Campaign Automation Plan Spend Leads Marketing Assets Call Center Physician Partner Physician Medical/ EMS ASTER BIG DATA ANALYTICS Social Media Call Center/ Web Transactions Teradata Aster Mining Modeling Reporting Trending Profiling Segmenting Mobile Consumer BIG DATA Figure 1. Teradata Customer Engagement Infrastructure. 5

6 s Future Depends on Data-Driven a plethora of independent data marts, they wind up with a number of flaws that limit their usefulness. Data latency problems, lengthy processing times, limited insights and excessive costs all hamper the ability of conventional approaches to use new data formats effectively. In contrast, Aster simply bolts big data analytical capabilities to the conventional data infrastructure, complementing the Teradata integrated data warehouse and reducing the effort and degree of difficulty for implementing big data analytics. The Teradata warehouse gives the analysis team timely access to all current and historical data, fuels and consumes results from the Aster platform and makes analytics operational in a real-time rules engine. Then there is the critical third piece: Aprimo, an integrated marketing/communication solution. Aprimo enables a health plan to take precise action at the moment when an intervention or outreach to a member is identified so that the right message is delivered to the right person and at the right time using the right preferred channel. It taps into all the consumer data in Teradata to understand consumer preferences and health needs, and it enables both traditional campaign creation and iterative consumer dialogues driven by individualized insights. Companies use Aprimo to statically or dynamically download dialogues and campaigns into the frontline system that paints web pages or drives call center screens or informs and personalizes any location where customer interactions occur. Additionally, Aprimo manages the operational side of marketing communications to expedite planning, budgeting, and asset creation with all of the necessary approvals, sign-offs and auditability required in an industry that is so regulated. The result is better, faster, more relevant interactions at moments of truth with consumers. And this is precisely the right capability for this moment in the healthcare industry. Precise Data-Driven Decisions Hold the Key to Personalized Service In an era of truly disruptive change in healthcare where it s clear that connecting with consumers is the key differentiator no health plan or insurer can afford to be making that effort without timely, reliable and relevant insights into consumer needs and preferences. Those insights absolutely depend on the ability to gather, analyze and act upon the wealth of information stored in companies rich and growing data stores. Now is the time to ensure that the proper tools and processes are in place to take advantage of those resources. For more information, contact your Teradata representative or visit Teradata.com/industry-expertise/healthcare/ About the author Rose Cintron-Allen is the Practice Lead Consultant for Teradata with over 30 years of experience in the health and life insurance industries. Rose s expertise is in developing decision support solutions for the healthcare industry and helping organizations meet their business challenges through technology solutions. As the Practice Lead, Rose has led decision support projects to maximize health and medical/pharmacy trend analysis, customer management, disease management, identification and outcome, and predictive analysis (health outcome, member disenrollment and fraud analysis). She has participated in various business improvement models to illustrate ROI using new technologies or business improvement practices. EndNote 1 Best Care at Lower Cost: The Path to Continuously Learning Health Care in America; National Academy of Sciences; Mark Smith, Robert Saunders, Leigh Stuckhardt, J. Michael McGinnis, Editors; Copyright 2012; /Best-Care-at-Lower-Cost-The-Path-to-Continuously- Learning-Health-Care-in-America.aspxs Innovation Drive Dayton, OH teradata.com The Best Decision Possible is a trademark, and Teradata and the Teradata logo are registered trademarks of Teradata Corporation and/or its affiliates in the U.S. and worldwide. Teradata continually improves products as new technologies and components become available. Teradata, therefore, reserves the right to change specifications without prior notice. All features, functions, and operations described herein may not be marketed in all parts of the world. Consult your Teradata representative or Teradata.com for more information. Copyright 2013 by Teradata Corporation All Rights Reserved. Produced in U.S.A.