One of the most pernicious fallacies in the world of health care is the belief that there is a clear trade-off between the cost and the quality of care. In truth, health care insurers can leverage health care data to simultaneously reduce costs and enhance patient care. That’s the visionary case now being made by Louisville-based Humana as it focuses on ways to strengthen its relationships with members.
"The purpose of the industry in the past was generally unlinked to the end user," says Dr. Jack Lord, a physician and Humana's chief innovation officer, in a recent issue of ComputerWorld. "It tended to focus on itself, and on employers acting in sort of a benefactor role to employees. The result was a consumer and public push-back."
Humana’s deep analysis of health care data, however, has enabled it to roll out an array of personalized options and benefit plans. This lets individual policy holders, for instance, choose higher deductibles and larger co-pays in exchange for lower monthly payments. Meanwhile, web-based tools support member decisions in an accessible and dynamic way, while eliminating needless paper, printing and postal charges. The result: lower costs and higher customer satisfaction. Eventually, the $13 billion company intends to offer fully customized health coverage for every individual – much as Dell offers custom-order computers.
Humana relies on a full array of analytic tools to assess terabytes of data, provide personalized options and price them optimally. It uses patented algorithms developed by scientists, engineers, mathematicians, economists and many others. Central to the company’s effectiveness is the ability to model and predict the likelihood a given health plan will be chosen, and what it will cost. It can even identify at-risk individuals at an early stage and intervene to avoid catastrophic illness.
The new models – which draw on complexity theory, genetic programming and an array of sophisticated pattern recognition techniques – are designed to be predictive, not just retrospective. In fact, the company’s innovation center has developed a number of models it calls “insight engines,” which assess claims, identify new markets, enhance products and predict costs. One engine – dubbed SimHealth – is designed to run scenarios that simulate various possible consumer choices and model the implications.
Visionary leadership of this sort has enabled Humana to deepen its relationships with all stakeholders and differentiate itself in a difficult market. Given such compelling examples, we can hope the health care industry – one of our most wasteful and unproductive – might one day heal itself.
