Perhaps you get trees’ worth of reports from your insurer or wellness vendor, but the words they use are foreign and confusing.  Although there isn’t enough time to deconstruct them all, here are three technical terms that often appear in these kinds of reports, and what they mean: 
1. Prevalence rate and incidence rate: 
These terms are separate, but are often (wrongly) used interchangeably. The prevalence rate of diabetes, for example, is the number of people in your group who have diabetes divided by the total number of people in your group. Prevalence is usually expressed as a percentage; so you might see that your group’s diabetes prevalence rate is 4.5%. Prevalence rate can also be called population rate.  
Incidence rate is the number of people newly diagnosed with diabetes in the time period, usually a year. There is nothing in medical claims data that flags a person as being a “new case”.  Only by reviewing medical charts could someone determine whether a case was new. So, if you see something in your report referring to incidence rate, you can assume they mean prevalence rate. You can also assume that they do not know their population health terms.  
2. Major Diagnostic Category (MDC) 
This is a very commonly used term, and widely misunderstood. All diagnoses or illnesses are put into one of the 25 Major Diagnostic Categories. With only 25 categories, a wide range of illnesses get lumped together. For example, anemia and heart attacks both are part of the Circulatory System category. Insurers often give clients a report of all claims dollars by MDC.  So you could see that your plan spent $500,000 on digestive system, $200,000 on nervous system, and so forth.  
One common misperception is about the term “major.”  “Major” refers to the categories, not to the illnesses being summarized. Every medical claim will have a diagnosis and will fit into one of the categories, whether the claim is for a bruise or for a heart attack.  
MDCs give you a high level picture of where your plan dollars are going, but like any high level picture, it is fuzzy at best.  
3. Risk factor 
An overweight person has a risk of developing diabetes. A smoker has a risk for developing emphysema. Losing weight and quitting smoking would reduce their “risk factors.” The distinction that many people overlook is that reducing a risk factor is not the same as reducing health costs.  
Not everyone who is overweight goes on to develop diabetes. Likewise, plenty of smokers do not get emphysema. Lots of reports imply that reducing risk factors is directly cutting health costs. An accurate analysis would weigh the risk factor reduction against the likelihood of future medical expenses. 
Press your insurer or wellness vendor to explain their reports.  You will get more out of the report. And you never know when you might get a chance to play a population health scientist on television.    
Guest blogger Linda K. Riddell is a principal at Health Economy, LLC, where she works with clients on gaining practical tools to comply with health care reform, and to maximize the new opportunities that reform offers. She can be contacted at LRiddell@HealthEconomy.net.

Perhaps you get trees’ worth of reports from your insurer or wellness vendor, but the words they use are foreign and confusing.  Although there isn’t enough time to deconstruct them all, here are three technical terms that often appear in these kinds of reports, and what they mean: 

1. Prevalence rate and incidence rate: 

These terms are separate, but are often (wrongly) used interchangeably. The prevalence rate of diabetes, for example, is the number of people in your group who have diabetes divided by the total number of people in your group. Prevalence is usually expressed as a percentage; so you might see that your group’s diabetes prevalence rate is 4.5%. Prevalence rate can also be called population rate.  

Incidence rate is the number of people newly diagnosed with diabetes in the time period, usually a year. There is nothing in medical claims data that flags a person as being a “new case”. Only by reviewing medical charts could someone determine whether a case was new. So, if you see something in your report referring to incidence rate, you can assume they mean prevalence rate. You can also assume that they do not know their population health terms.  

2. Major Diagnostic Category (MDC) 

This is a very commonly used term, and widely misunderstood. All diagnoses or illnesses are put into one of the 25 Major Diagnostic Categories. With only 25 categories, a wide range of illnesses get lumped together. For example, anemia and heart attacks both are part of the Circulatory System category. Insurers often give clients a report of all claims dollars by MDC. So, you could see that your plan spent $500,000 on digestive system, $200,000 on nervous system and so forth.  

One common misperception is about the term “major.” “Major” refers to the categories, not to the illnesses being summarized. Every medical claim will have a diagnosis and will fit into one of the categories, whether the claim is for a bruise or for a heart attack.  

MDCs give you a high level picture of where your plan dollars are going, but like any high-level picture, it is fuzzy at best.  

3. Risk factor 

An overweight person has a risk of developing diabetes. A smoker has a risk for developing emphysema. Losing weight and quitting smoking would reduce their “risk factors.” The distinction that many people overlook is that reducing a risk factor is not the same as reducing health costs.  

Not everyone who is overweight goes on to develop diabetes. Likewise, plenty of smokers do not get emphysema. Lots of reports imply that reducing risk factors is directly cutting health costs. An accurate analysis would weigh the risk factor reduction against the likelihood of future medical expenses. 

Press your insurer or wellness vendor to explain their reports. You will get more out of the report. And you never know when you might get a chance to play a population health scientist on television.    

Guest blogger Linda K. Riddell is a principal at Health Economy, LLC, where she works with clients on gaining practical tools to comply with health care reform, and to maximize the new opportunities that reform offers. She can be contacted at LRiddell@HealthEconomy.net.

 

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