With increased governmental regulations and skyrocketing medical costs due to aging populations and greater disease burdens, it is time to consider risk-based stratification or segmentation to better understand your plan members, patients or employees.

What is risk-based segmentation?

In the past, you might have categorized individuals by how they used the health care system and what services they’ve received, but that strategy only gives you part of the picture.   Risk-based segmentation uses current and prospective medical costs, health status, attitudes and level of health care engagement1 to stratify individuals from any population – plan members, patients or employees.

Why not use claims data?

Claims data is useful, but can only provide a glimpse into the potential risks and rewards of your population.   The data can reveal the prevalence of disease amongst those who seek treatment, but it cannot identify which individuals have undiagnosed conditions and which ones are avoiding treatment.   Claims data can indicate which preventive treatments are being followed, but cannot tell you how best to engage each individual in their personal health care and which wellness programs and incentives will resonate with each one.
By the time you receive claims data, it could be up to six months out of date, and new health plan members could be halfway through a 12-month coverage period before you know anything about their health and potential risks.   Risk-based segmentation provides immediate, actionable results.

How do you use risk-based segments?

Individuals are assigned to an initial segment based on available internal information and appended third-party demographic and psychographic data.   Once segmented, you can quickly identify high-risk individuals who could benefit from personalized, immediate intervention.
To maximize effectiveness, you should interact with each individual based on their communication preferences.   Individuals that tend to put their trust in provider relationships are encouraged to visit their personal doctor to receive specific preventive tests and screenings.   Information seekers are given educational materials and opportunities to interact with like-minded individuals.  The most confused and disengaged consumers are targeted for personal contact from case managers and disease management professionals to maximize the return on these expensive resources.
As additional information becomes available through medical claims and other sources, the risk-based segment assignments are adjusted to improve the accuracy of each designation.

Key deliverables.

There are a number of outcomes from a risk-based segmentation project:

  • Understanding of the risk profile of your population relative to the overall market
  • Stratification of your population (and the market) in terms of risk profile, level of engagement1, attitudes and product preferences
  • Prioritization of individuals for maximum effectiveness
  • Product design and benefit preferences for each segment
  • Receptivity to wellness programs and most effective incentive options by segment
  • Targeted marketing and communication approaches for each segment
  • Segment attribution models to be applied for list scoring, face-to-face and Internet selling situations

Why we recommend risk-based segmentation?

Using claims data alone only shows you who already has a health problem.   Preventing future illness and medical costs by catching diseases early and getting consumers more engaged is the best way to manage and minimize risks within your member, patient or employee population.   Risk-based segmentation makes it possible to identify future medical risks, prioritize those individuals most likely to respond and communicate with them in a manner that reaps long-term benefits for them and your organization.

1DSS Health Care Engagement Index™ (HCEI) was designed specifically for the purpose of measuring individuals’ level of engagement with their personal health.  Visit the DSS website to learn more about the HCEI and how it was created.