How Small Insurers Can Use Big Data to Get Massive Results

Healthcare Simplified - Episode 6

August 21, 2017

When playing a word-association game, if you hear the word "healthcare," your first thought is probably not "battleship."

But, according to Dustin Plantholt, Chief Sales and Marketing Officer of Evergreen Health, Inc., “battleship” is actually an apt metaphor for large national health insurers. They both have an important role to play and look impressive, but trying to turn either of those bad boys in a new direction is tough.

On the other hand, small, local insurers like Evergreen have a much easier time adjusting course. They’re like the speedboats zipping around the bases of the crawling behemoths.

Small but Mighty

Detriments of a small company compared to a large one are easy to list, with fewer resources and less name recognition being the most prominent. But smaller companies do have several advantages.

Our society is increasingly centered around online, rather than in-person, experiences. It’s where we shop, find restaurants, connect with friends and colleagues, and search for necessities like health insurance.

Despite this focus on the Internet, there is still something comforting about going somewhere where everybody knows your name. Healthcare customers want all of the functionality and security of a large health insurer with the comfort of knowing their insurer is just down the street.

Big companies can try to have a local presence, but they just don’t have the same feeling of community. A smaller company, where the employees both work and live in the same state where their customers do, just feels more secure and welcoming.

The Importance of Data

One of the detriments of smaller companies listed above is the lack of resources. Unlike big national brands, smaller companies can’t just buy their way into a share of the market or enter a new area of growth by artificially lowering their rates.

That’s why many small companies like Evergreen have gotten extremely good at utilizing data to make up for those restricted resources. Smaller companies may also not be able to collect as much data as their larger counterparts, but they are able to analyze and utilize the data they do collect in a timely manner.

Data helps keep both health insurance companies and client companies engaged. Customers tend to get frustrated when rates continually rise, but there are ways to prevent this from happening.

If health insurers look at all of this available data to calculate risk scores and find the areas of highest cost, they can work with client companies and individual customers to promote actions that drive down costs. The data is just a way to pinpoint where to begin working together to make those high cost categories less frequent problems.

For example, certain prescriptions cost the health insurer thousands of dollars annually. The customers aren’t aware of this behind the scenes cost, or how it affects their rates.

By using the metrics to figure out which medications are racking up the highest costs, health insurers can work with client companies to develop better wellness programs or share information with their employees in ways that reduce the frequency of those expensive prescriptions claims.

In the same vein, doctor’s visits for minor ailments that require no tests to be run happen all the time. Many insurers and companies have partnered together to find ways to decrease unnecessary claims like this by promoting virtual doctor’s visits online or encouraging telephone conversations for basic questions.

Progress like the previous examples requires both good data and engaged health insurance providers. This sort of focus is crucial for smaller companies. They can’t buy their market share, so whatever they win has to be well-managed to encourage customers to stick around well into the future.

Conclusion

Using data in innovative ways helps small, local companies compete with the national carriers. Large national health insurers have all the impressive size and capability of an iconic battleship, but they also have the issues of movement that come with that size.

On the other hand, smaller insurers can adjust more quickly to changes in the market. They’re more likely to implement new methods of doing business like focusing on the local life or using data to predict and manage costs.

Sometimes it pays to be small but mighty.

This post is based on a podcast interview with Dustin Plantholt from Evergreen Health, Inc. To hear this episode, and many more like it, you can subscribe to Healthcare Simplified.

If you don’t use iTunes, you can listen to every episode here.