Using Big Data to Lower Your Employee Hospital Costs

In a scene reminiscent of the crime predictions in the Tom Cruise-movie, Minority Report, healthcare companies are using sophisticated algorithms to predict when a patient might become ill, suffer a setback in care, or otherwise need hospitalization in the near future. Put simply, big data is being used to lower employee hospital costs.

Independence Blue Cross of Philadelphia is working to identify those among its customers who are sick or frail enough to be on the edge of hospitalization. Computers sift through all available information such as billing claims, lab results, medications, height, weight, and family history to calculate a score for individual patient risk.

Says Somesh Nigam, chief informatics officer at Independence, “The health care data we provided these algorithms is equivalent, I think to [all the data in] five Wikipedias.”

Making such predictions gives caregivers a head start in heading off whatever may be in store. It might be having a visiting nurse help someone get a blood test for diabetes or a change in a patient’s medication. The ultimate goal is to prevent hospital readmissions, a huge drain on finances, costing Medicare alone $15 billion annually.

Reducing Hospital Readmissions the Kaiser Permanente Way

Here in Washington state, Kaiser Permanente (formerly Group Health) is taking similar steps in taking a proactive care approach with its members. Through its outgoing engagement efforts, the organization sends various forms of communication—letters, automated voice mails, secure emails, online reminders, and more—to inform patients about screenings, lab tests, medications, and upcoming appointments. Internal statistics show that 90 percent of members who receive an annual letter indicate they have taken action as a result.

We also rely on big data and algorithms to create alerts regarding patients at risk for readmission or serious complications. In this way Kaiser Permanente is able to proactively reach out to members who would benefit from our care management programs.

Disease Management helps employees effectively deal with conditions such as diabetes, asthma, and congestive heart failure so they avoid costly and devastating complications. Our efforts have proven to be so effective that Kaiser Permanente’s commercial HMO plan (as Group Health Cooperative) was rated the top-performing health plan for helping members manage chronic conditions—in the entire country.

Complex Case Management is a full-court press for patients who have multiple conditions and providers, and who are having difficulty managing all of their health issues. Patients often enter the program after hospitalization, and nurse care managers help them avoid a readmission

Transition Management helps members receive appropriate care coordination from the time they enter an ER or hospital, through discharge to various care settings, and into their recovery—including giving patients the tools, resources, and follow-up to manage their health.

Healthy Results

The results of all this support have been impressive:

  • After one year, improvements in transition management saved $51 million.1 Non-Medicare admits and hospital days were reduced by 3.5 percent and 7.6 percent, respectively.2
  • Group Health Physicians (now Kaiser Permanente Physicians) was awarded the eValue8 2010 Innovations Award from National Business Coalition on Health for deploying Lean quality improvements to reduce hospital readmissions.
  • In the 2016eValue8 report from Washington Health Alliance, Kaiser Permanente’s commercial HMO plan (as Group Health Cooperative) was rated the top-performing health plan in the entire country for helping members to get and stay healthy.



Care and Coverage Work to Bring Down Your Hospital Costs

An integrated system like Kaiser Permanente, where care and coverage work together, is better able to focus on high-risk patients and care transitions to help members avoid being readmitted—or even admitted—to the hospital. Which in turn can help lower the overall cost of your employee health plan. The Rand Corporation reports companies state that 87 percent of their health care cost savings come from chronic condition management programs.



    1. Group Health Inpatient Savings Report, 2010
    2. Group Health Cost Management Database
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All plans offered and underwritten by Kaiser Foundation Health Plan of Washington or Kaiser Foundation Health Plan of Washington Options, Inc.