Economic model for measuring the cost and value of a particular health insurance plan

• US 7,958,002 B2
• Filed: 10/28/2009
• Issued: 06/07/2011
• Est. Priority Date: 10/31/2001
• Status: Expired due to Term

• Current Assignee: NCQA
• Original Assignee: NCQA
• Inventors: Bost, James
• Primary Examiner(s): Pats; Justin M
• Application Number:
  US12/607,838
• Publication Number:
  US 20100106661A1
• Time in Patent Office: 587 Days
• Field of Search: 705/11
• US Class Current: 705/7.38
• CPC Class Codes: G06Q 10/063 Operations research, analysis or management
• CPC Class Codes: G06Q 10/0639 Performance analysis of employees; Performance analysis of enterprise or organisation operations
• CPC Class Codes: G06Q 10/1057 Benefits or employee welfare, e.g. insurance, holiday or retirement packages
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

The present invention provides a system and method for measuring the relative economic benefits from services offered by health care plans. The present invention quantifies value of health care quality by indicating an economic return on the investment in health care quality, enabling organizations and businesses to view health care quality in a familiar paradigm that extends health plan differentiation beyond premium and benefits. Businesses may employ the present invention to compare different health care plans or classes of plans, such as accredited versus non-accredited plans. Specifically, a particular plan or class of plans may provide improved monitoring, treatment and control of various medical conditions, and the present invention quantifies the economic benefits to employers from the improved health care for employees. In one embodiment, the present invention looks to a set of specific medical conditions and is based on three key steps. First, the present invention identifies the overall level of employees at the organization affected by these conditions. Second, the present invention uses the reduction in absenteeism and low productivity days made possible by improved monitoring and control of the medical conditions. Third, the present invention calculates a monetary valuation to the firm of the reduction in absenteeism and low productivity days based on the firm'"'"'s average revenue per employee, average daily wage, and other parameters.

Claims

1. A computer readable storage device comprising software for use by an organization having a number of members of differing ages, said software containing instructions for causing a microprocessor to determine the total annual reduction in sick days and low productivity days for a medical condition, said instructions causing the microprocessor to perform the steps of:

a. providing data relating to the members of the organization, the data including a list of age ranges (R₀-R_k) and a list of ailments (A₀-A_i) that may cause the members of the organization to experience;

i. a sick day in which a member of the members of the organization is absent or unable to work on a given day, or

ii. a partial impairment day in which the member'"'"'s productivity on the given day is lowered or partially impaired,

b. for a first ailment (A₀) for a first age range (R₀), providing information which includes;

i. the number of members (N₀) within the first age range that may be expected to be affected by the first ailment,

ii. the number of sick days (S_c) the member is expected to experience in a set time period when the first ailment is controlled by a first health plan (H₀),

iii. the number of sick days (S_n) the member is expected to experience in the set time period when the first ailment is not controlled by the first health plan (H₀),

iv. the number of partial impairment days (P_c) the member is expected to experience in the set time period when the first ailment is controlled by the first health plan (H₀),

v. the number of partial impairment days (P_n) the member is expected to experience in the set time period when the first ailment is not controlled by the first health plan (H₀),

vi. a control percentage (C₀) for the first health plan (H₀), and

vii. a control percentage (C₁) for a second health plan (H₁),

c. determining a result by subtracting C₁ of H₁ from C₀ of H₀ and saving the result as a multiplier (m₀),

d. determining how severe the partial impairment of the member'"'"'s ability to work is and expressing this severity as a percentage (I₀), wherein a higher percentage indicates a greater impairment of the member'"'"'s ability to work,

e. determining a difference between the number of sick and low productivity days the member is expected to experience by subtracting (S_n+I₀×

P_n) from (S_c+I₀×

P_c) and saving the difference (f₀),

f. determining a total annual reduction (T₀) in sick days and low productivity days for the first age range for the first ailment by multiplying (N₀*f₀*m₀).

g. determining the value (V) of the member to the organization per day based at least in part on either;

(i) an average daily replacement cost of hiring a temporary worker when the member is absent from work, or

(ii) annual revenue of the organization, the number of members of the organization, and annual number of workdays per member, and

h. determining the expected amount of money (E₀) the organization could expect to pay for the first age range for the first ailment by selecting the health plan (H₀) by multiplying (N₀*V*T₀).

2. The computer readable storage device of claim 1, comprising the additional substep under step b of providing health information including a cost (k₀)of the first health plan (H₀).

3. The computer readable storage device of claim 1, comprising the additional steps of repeating steps b-f for a second age range (R₁) for the first ailment to determine a total annual reduction in sick and low productivity days for said second age range.

4. The computer readable storage device of claim 1, comprising the additional steps of repeating steps b-f for all remaining age ranges (R₁-R_k) for the first ailment to determine a total annual reduction in sick and low productivity days for each said age range.

5. The computer readable storage device of claim 1, comprising the additional steps of repeating steps b-h of claim 1 for all remaining age ranges (R₁-R_k) for the first ailment to determine a total amount of money the organization could expect to pay by using the first health plan (H₀).