Henn - Trend 101 Purdue University MA/STAT 170 presented by...

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“Trend 101” Purdue University MA/STAT 170 presented by Andy Henn Directory & Actuary III September 30, 2010
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2 Company Confidential | For Internal Use Only | Do Not Copy Trend 101 Session Overview x What is Trend? x Types of Healthcare Claims Trend x Trend Normalization
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What is Trend?
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4 Company Confidential | For Internal Use Only | Do Not Copy What is Trend? Trend is the percent change in a statistic from one period to another x Measured between similar time periods h For example, 3Q2009 to 3Q2008 or calendar year 2009 to 2008 x Common periods h 1-month h 3-month h 12-month
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5 Company Confidential | For Internal Use Only | Do Not Copy Trend is like a lake created by a dam across a river Water flows in from the river and out from the gates of the dam. The water level represents the trend level If the (water) flowing in is greater than the water flowing out, the trend rises If the (water) flowing in is less than the water flowing out, the trend recedes Now substitute “claims” in place of (water). What is Trend?
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Types of Healthcare Claims Trend
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7 Company Confidential | For Internal Use Only | Do Not Copy Trend statistics measured in health insurance - Per Member Per Month “PMPM” (example below) - Unit cost - Utilization: Admits or days for Inpatient (IP), visits for Outpatient (OP) & Professional (PR), and scripts for Rx All statistics are measured for all types of service (IP, OP, PR and Rx) PMPM Example: Types of Healthcare Claims Trend Year Month Claims Memberhsip PMPM 1 1 1,500,000 $ 6,000 250.00 $ 1 2 1,100,000 $ 6,030 182.42 $ 1 3 1,850,000 $ 6,060 305.28 $ 1 4 1,400,000 $ 6,090 229.89 $ 1 5 1,500,000 $ 6,120 245.10 $ 1 6 1,800,000 $ 6,151 292.64 $ 1 7 1,350,000 $ 6,182 218.38 $ 1 8 1,900,000 $ 6,213 305.81 $ 1 9 1,600,000 $ 6,244 256.25 $ 1 10 1,800,000 $ 6,275 286.85 $ 1 11 2,100,000 $ 6,306 333.02 $ 1 12 1,900,000 $ 6,338 299.78 $ 1 Total 19,800,000 $ 74,009 267.54 $ Trend 2 Total 22,770,000 $ 77,709 293.01 $ 9.5%
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8 Company Confidential
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This note was uploaded on 04/25/2011 for the course MA 170 taught by Professor Staff during the Spring '08 term at Purdue.

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Henn - Trend 101 Purdue University MA/STAT 170 presented by...

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