HCMS Unveils Purple Solution for Obamacare


HCMS Group today unveiled our Purple Solution for the fight over Obamacare between Democrats and Republicans in Washington. We outlined it in a news release: http://www.prnewswire.com/news-releases/we-need-a-purple-solution-for-americas-healthcare-conundrum-300389869.html. Click here for research findings supporting our position, and here to see the elements of the plan.

Our point is that there is a simple, proven solution to the challenges created by the Affordable Care Act. We test-drove and refined it in the state of Wyoming, and we advocate it every day for self-insured employers. We’ve shown that it works to reduce healthcare waste while protecting health.

For more news from HCMS, click here.


What’s Eating Up Your Paycheck? Healthcare Costs (Healthcare Waste)


Healthcare waste helps keep wages flat, widening economic inequality and fueling voter anger and frustration.

healthcare waste causes wage stagnation

Tuan Azizi/Getty Images/Thinkstock


Everybody talks about how insanely expensive healthcare and health insurance are. And there’s lots of talk about how wages have barely kept up with inflation for at least eight years.

But nobody’s really talking about how those two things – surging healthcare costs and stagnant wages – are directly connected. New research by HCMS Group, a healthcare reform company based in Cheyenne, Wyo., dramatically shows the link.

For a substantial cross-section of private employers and the people they cover, healthcare costs rose more than 10% in 2014, the study showed. Worker pay climbed just 4.1%. For those making less than $30,000 – predominantly women – wages inched up 0.5% while their healthcare costs jumped almost 17%.

What’s the connection? Well, employers lump wages and benefits together in their budgets for worker compensation. As healthcare expenses drain progressively more money out of total compensation budgets, there’s less available to put in people’s paychecks. Many employers try to limit their healthcare costs by raising premiums, copays, out-of-network charges and deductibles. But that just takes even more money directly out of people’s pockets, without improving health.

The study spotlights one of the biggest but least discussed economic effects of runaway health benefit costs. Flat wages widen economic inequality – one of the things fueling voter anger and frustration this election year.

“The key to resolving wage stagnation is to reduce healthcare waste and funnel those dollars into wages,” said Dr. Hank Gardner, the CEO of HCMS Group.

Healthcare waste is at the center of the problem. Waste is overtreatment by medical providers and overconsumption by patients, with risky narcotics at the top of the list. Waste accounts for 30% of national healthcare spending. The current healthcare benefits system encourages waste and does little to improve health.

The HCMS study of wages and healthcare costs was based on the company’s unmatched Research Reference Database, which includes healthcare, compensation and paid time off data for almost 4 million Americans whose benefits are provided by more than 300 employers.

healthcare costs and wage study

In 2014, average wages in the healthcare costs study group of more than 140,000 people rose 4.1% to $81,371. Average health plan costs – including those paid by employers and directly out of employees’ pockets – jumped 10% to $10,263 a person. Among people earning less than $30,000, wages increased $124, or 0.5%, while their health plan costs surged $797, or 16.6%.

People in higher income brackets had higher raises – 4.3% for those making $30,000 to $80,000 and 4.2% for salaries higher than $80,000. Meanwhile, their healthcare costs rose substantially less than expenses for people in the under $30,000 group. The data show how the costs of healthcare waste fall disproportionately on those with lower incomes, contributing to economic inequality.

“This shows the power and importance of real healthcare reform,” Gardner said. “We need to put more money in people’s pockets. People with the lowest incomes – notably women and single mothers – wind up paying the most for healthcare waste in the form of forgone wages.”


For self-insured employers HCMS Group offers offer comprehensive, REAL healthcare reform solutions to reduce healthcare waste and costs while improving health. Please contact us at HCMSgroup.com or call (877) 883-5786.

— Bob Simison on behalf of HCMS Group data analytics.

Behind the Surge in Healthcare Cost: Healthcare Waste, by the Numbers

Behind the Surge in Healthcare Cost: Healthcare Waste, by the Numbers



an elephant calm in a restaurant interior. photo combination concept

There’s an elephant in the healthcare cost room that nobody wants to talk about. It’s healthcare waste, and it adds up to almost $1 trillion.

Researchers including the government’s own Institute of Medicine have found that 30% of the nation’s $3.2 trillion in annual healthcare spending is wasted.  According to research conducted by HCMS Group, waste in the form of over-treatment and over-consumption accounts for 30% to 40% of healthcare costs for risk-bearing employers and health plans.

Why not talk about it? Well, it’s a touchy subject. Who’s to say what waste is when we’re talking about someone’s health? What’s waste to you might seem like a life-or-death necessity to me.

Nonetheless, that’s what we focus on at HCMS Group, because reducing waste is the best way to lower cost for employers while improving health. Wasteful over-diagnosis and over-treatment by the health industry contributes to over-consumption by patients that increases their risks.

“Most healthcare providers know they over-treat people,” said Dr. Hank Gardner, the CEO of HCMS, based in Cheyenne, Wyoming. “They do it because that’s what patients expect – lots of tests and procedures and prescriptions – and the providers have to worry about customer satisfaction scores.”

To understand healthcare waste, it’s important to know these three numbers:

5 50 30 on blue

For self-insured employers HCMS Group offers a free Healthcare Waste Estimator so you can know your 5-50-30 numbers. Please contact us at HCMSgroup.com or call (877) 883-5786.

— Bob Simison on behalf of HCMS Group data analytics.

How Employers Can Better Manage the Recovery-Time Dimension of Healthcare

How Employers Can Better Manage the Recovery-Time Dimension of Healthcare


A hidden dimension to healthcare costs lies in a workplace perk that most people take for granted: Paid time off to recover from an illness or injury. And most employers can improve their approach and improve health while reducing lost time by focusing on the right people, based on research by HCMS Group.

Work time lost because of illness or disability represents a major indirect cost in addition to the direct expenses of healthcare and other employee benefits. Sick days, disability, and workers’ compensation time off run into the millions of dollars every year for large employers and into the hundreds of billions for the U.S. economy, studies have shown.

The average worker with a disability claim uses about 11 days of recovery time a year, costing employers $5,577 annually (see figure 1 below). That is based on 10 million lost-time episodes from HCMS Group’s Research Reference Database of almost 4 million people covered by more than 300 employers.

But those averages mask the true nature of the issue. People in the 5% of the population that accounts for more than 50% of healthcare costs consume much more recovery time. For them, disability and sick time adds up to almost 92 days a year and costs almost $42,000. By comparison, members of the lowest-cost 50% use fewer than 2 sick days a year at a cost of less than $1,300. Clearly, the high-cost 5% group offers a great opportunity for helping people return more quickly to health and work, saving money on recovery time.

This is where most employers could improve their management approach. Almost every disability-management program in use today focuses on a patient’s primary medical problem. There’s a whole industry built around “disease management.” Do a Google search on that term, and you get more than 41 million entries.

What’s wrong with that? Well, a person’s primary disease is often only a relatively small part of the picture, based on more than a decade of research on the high-cost 5% group by HCMS. These are people with complex health needs who typically have 11 medical diagnoses and 10 healthcare providers, and are taking 10 prescription medications, HCMS researchers have found.

The additional conditions, known as comorbidities, account for anywhere from 50% to more than 90% of total healthcare costs for people in the 5% group, according to HCMS data (see figure 2 below). For example, among people with cardio-metabolic syndrome–one of the highest-cost diseases–the primary heart condition amounts to just 9% of total medical costs. For those with a musculoskeletal condition, the cost of treating the basic injury to the body’s structure of bones, joints and muscles comes to just 24% of the total.

Consequently, disease management that focuses on a single dimension of a person’s set of conditions will fail to address most of what else is keeping that employee away from work. The main takeaway from these research findings is the need for a whole person-centered approach to helping people return to health and to work.

— Bob Simison, HCMS communications, on behalf of HCMS Data Analytics

Figure  1: Average disability cost by population group, from the lowest-cost 50% to the highest-cost 5%.

Disability Claimant PRA

(Click image to enlarge)

Figure 2: Cost of primary condition and comorbidities, by category of primary disease.

Disability Claimant Comorbidity Analysis

(Click image to enlarge)

Recovery Time: Another Dimension of Healthcare Cost Management

Recovery Time: Another Dimension of Healthcare Cost Management



How a Person-Centric Risk Management Model Helps a Speedy Return to Work… and Health.

HCMS Newsletter December 2014

Work time that is lost because of illness or disability represents a major indirect cost to employers in addition to the direct cost of healthcare and other health benefits. Most disability management programs focus primarily on a patient’s primary medical disease—hence the term disease management.

Variation in Recovery Time

Using our big data Research Reference Database on nearly 4 million people from over 300 employers with 10 million lost time episodes, our research shows the importance of population risk analysis and a person-centric approach in reducing lost-time cost.

Figure 1 is a population risk analysis on disability claimants that demonstrates the huge variation in lost time. Half of the claimants in this population lost 1.7 days from work while the high-risk 5% population lost an average of 91.5 days –over 50 times more than the other population. Our predictive Human Capital Risk Index (HUI) shows risk well before actual lost time which provides a preventive intervention disability management strategy.

Figure 1: Disability Claimant Population Risk Analysis

Disability Claimant PRA

(Click image to enlarge)

The Need for a Person-Centric Approach

Further research shows why a disease-centric disability-management system is less effective because, as shown in Figure 2, the cost of the primary disease in disability cases is only a fraction of the total cost and does not account for the many comorbidities, or additional diseases, those disability claimants have. This situation drives the need for a proactive, preventive, and person-centric approach that is informed by the predictive HUI which allows for focus on the whole person, not just the primary disease.

Figure 2: Disability Claimant Comorbidity Analysis

Disability Claimant Comorbidity Analysis

(Click image to enlarge)


Implementing a predictive analytic person-centric disability management strategy that focuses on the high-risk 5% population has major potential for reducing disability-related lost time and returning workers to productive health.

HCMS Implementing Two-Factor Authentication for All Online Services

HCMS will soon be implementing an additional layer of security for access to online services such as O|BI, iHUI, and SMA. The new security feature is called two-factor authentication. You may be familiar with earlier generations of two-factor authentication that utilized dedicated tokens—a gizmo with a button that generates a code. We will utilize mobile devices and land lines as our method of two-factor authentication. Basically, you will register a mobile device and/or a land line. When you log in, you will be required to confirm your login via a code texted to your mobile device or a phone call to the land line. In addition to entering your password, two-factor refers to the fact that you have to supply something you know (a password) and something you have (the mobile device or land line) in order to log in, increasing security by reducing the chances your account can be hacked. More to come soon on this important new security feature!

KnovaSolutions in Action: Improved Family Health

KnovaSolutions Member ImageA middle-aged factory worker with neck and back pain was scheduled for surgery when he enrolled in KnovaSolutions. He had been in and out of work for almost a year and was taking narcotic pain medications. His wife’s elderly parents lived with them and his wife was on multiple medications related to stress.

His KnovaSolutions nurse discussed non-surgical options for pain management and the pharmacist reviewed non-narcotic medications for pain. The KnovaSolutions team also assisted the couple to locate resources within the community to help with the care of her parents.

With the information and support provided by KnovaSolutions, the member decided to postpone surgery while he tried other therapies. He also switched to non-narcotic pain medications which allowed him to return to work and so far, he has not missed any additional days. With the community resources to assist with care for her parents, his wife has decreased the number of medications she takes and reports feeling more in control of their home situation.

Both the member and his wife reported “how nice it is to have someone interested in more than just running tests or giving you pills.”

Click here to view or download this newsletter as a PDF.

The Illusion of Healthcare Reform: Why Healthcare Exchanges Are the Wrong Answer

The Illusion of Healthcare Reform: Why Healthcare Exchanges Are the Wrong Answer


HCMS Newsletter November 2014

To reduce ever-increasing healthcare costs, self-insured American employers are now offering benefit plans and giving workers subsidies for buying health insurance from a menu of plans in private healthcare exchanges. A new health risk score analysis shows how consumers’ choices exposed some health insurance providers to substantial losses.

Allure of Multiple Choices

The government Affordable Care Act healthcare exchanges are the model that consultants are using to construct private healthcare exchanges for private employers. These roughly match the levels of coverage in health exchanges created under the Affordable Care Act. They range from high-deductible, low-premium bronze and silver plans to low-deductible, high-premium gold and platinum plans.

A Behavioral Economics Population Analysis

Using our comprehensive Research Reference Database, we analyzed what happened when a benefit program is replaced with a private health exchange. We used our Human Capital Risk Index® (HUI, patent pending) to compare plan populations.

Consumer Choice & the Pricing Problem

What did we find? People are smart and make rational decisions in choosing the health plan option that best fits their needs. Those who chose the lowest-premium, highest-deductible bronze plans had HUI scores of 0.6, well below the average of 1.0. Silver plans attracted HUI scores of 1.0; gold, 1.49; and platinum, 1.75. This shows that consumers made rational decisions based on assessments of their own risk.

Using traditional actuarial risk analyses, insurance companies significantly overpriced the bronze and silver plans. Bronze premiums of about $4,000 were twice as high as the participants’ actual health costs in 2013. Gold and platinum plans were under-priced — by about 40 percent for the platinum level.

Recipe for Failure

For insurance companies with greater exposure to gold and platinum policies — with above-average HUI scores — the potential for losses was as high as 20 percent. Those companies that attracted below-average HUI ratings stood to be well in the black with margins of 50 percent.

There are two takeaways: HUI scores could have great utility in plan pricing, and offering a single, aligned-incentives health plan would prevent the problem.

Multiple Medications: A Top Problem in the 5% Population

The use of multiple prescription medications, or polypharmacy, is a common problem within the 5% high-risk, high-cost population that the KnovaSolutions clinical prevention service engages. The average person in this group is taking more than 10 unique prescription medications. Polypharmacy causes poor job productivity, high absence rates, and low work quality.

The KnovaSolutions team, which includes a licensed pharmacist and master’s-prepared nurse, addresses the issue of polypharmacy by assessing the medications for interactions, duplication, compliance, effectiveness, and appropriate dosages. This assessment leads to many positive outcomes for the member including improved adherence in medications, a decreased number of medications without adverse side effects, less time away from work with medication adjustments, as well as improved health and productivity.

Research Findings

A Game-Changing Predictive Health Risk Index

We’re all defined by numbers such as age, weight, and credit scores. Each of these tells something about you now or in the past, but none of them can predict your future. Learn how our Human Capital Risk Index® predicts your future health here.

KnovaSolutions in Action: Alternatives to Drugs and Surgery

KS Knee ImageA female KnovaSolutions member who was recovering from surgery for colon cancer told her KnovaSolutions clinical prevention team about chronic pain in her left knee. Cortisone treatments and prescription pain medications over the years hadn’t provided significant relief.

The member asked about other options. Her KnovaSolutions nurse discussed with her the risks and benefits of knee surgery and non-surgical alternatives.

With support from her clinical prevention team, the member decided to try a physical therapy program aimed at strengthening the muscles that support the knee. With completion of the program and continued exercise, she reports the knee is now nearly pain-free. She says she is happy she avoided another surgery and no longer needs narcotic pain medications.

Healthcare Reform Seminar in Nebraska

Nebraska employers and healthcare organizations participated in our first healthcare reform seminar Nov. 14 in Omaha. The 26 individuals representing 20 companies learned how they can seize the initiative to carry out their own market-based reform programs even as the Affordable Care Act substantially increases costs with mandates for expanded benefits.

HCMS participants included Dr. Hank Gardner, our CEO; Shawn Petrini, our chief clinical officer; Justin Schaneman, vice president of data analytics; Dean Thompson, vice president of marketing and sales; and Neil Sullivan, senior human capital management consultant.

The program covered population risk analysis, the problems associated with health insurance exchanges, and the superiority of econometric over actuarial modeling. Breakout sessions provided deeper dives into the elements of our 5|50 Solution.

We plan to host a series of healthcare reform seminars in 2015 around the country and will be in touch when we come to a city near you.

Check out our website’s new content and updated design:


Click here to view or download this newsletter as a PDF.


A Game-Changing Predictive Health Risk Index

A Game-Changing Predictive Health Risk Index


We’re all defined by numbers. Social Security number, age, height, weight, bank account, credit score. Each of them tells something about you now or in the past, but none of them can predict your future.

There’s a new kind of number that is designed to predict something – your future health. It’s HCMS Group’s Human Capital Risk Index® (HUI, patent pending). The HUI (pronounced “Huey”) score takes into account more than 300 variables, including how many and what kinds of prescription drugs you take, what medical diagnoses you have, your healthcare history, how much time you’ve lost from work, and other important factors like your job compensation.

There are many other health risk calculations available — for assessing your chances of having kidney failure, heart disease, cancer and other diseases. Health insurance companies and health benefits consultants are creating broader metrics, attempting to get ahead of medical costs. Most of these are based on healthcare claims data and specific disease factors.

However, the predictive powers of most disease risk calculators are limited, according to company benefit managers who’ve tried them. “It seemed like we were always looking in the rear-view mirror,” says one.

What sets the HUI risk index apart is that its design gives the number considerable predictive power, based on more than a decade of research using the HCMS Group’s research reference database of almost 4 million people covered by more than 1,600 employers. As a person’s HUI score rises above an average of 1.0 for the general population and approaches 2.0 or higher, the chances of a complex health situation and high medical costs increase dramatically, research shows.

HCMS researchers compared the HUI score with a common disease risk metric and measured each index’s findings against actual healthcare costs for the 12 months through July 2012. The HUI’s predictive power for health benefit costs for the entire population was almost twice that of the disease index. It was also superior in forecasting disability compensation costs for the 5% of patients who account for more than 50% of medical spending. And it was almost twice as accurate in assessing a person’s likelihood of being in the 5% high-cost group. (See graphic below.)

The difference lies in the HUI’s unique formulas. It gives full weight immediately to medical diagnoses rather than waiting for medical claims to materialize. Expenses for some diseases such as cancer accumulate over time and may show up months or years later. The HUI score also relies on a big-data reference database that includes much more than just healthcare claims, providing a more complete picture for the whole person.

The HUI score is as dynamic as a credit score. Just as people are able to repair their finances and improve their ability to borrow, new research is showing that patients who own their health by helping themselves through adopting healthier behaviors become better consumers of medical care and improve their HUI scores – and their health.

Predictive Power of Risk Index


*Based on an R2 statistical measure of significance used to assess predictive power measuring the relationship between risk score and total health benefit costs.
** Based on a pseudo R2 as measured from the logistic relationship between risk score and the likelihood of being high cost.
— By Robert L. Simison, HCMS Communications

On behalf of HCMS Data Analytics

The HUI Advantage: A Person-Centric Predictive Risk Index

The HUI Advantage: A Person-Centric Predictive Risk Index


HCMS Newsletter October 2014

Our Human Capital Risk Index® (HUI, patent pending) signals rising risk in advance of costs. This makes smarter population health management possible. Individual HUI scores can be instrumental to informed clinical decision-making. And the combined HUI score for an insured population can provide an accurate risk assessment for setting premium pricing.

What Goes Into It

The HUI (pronounced “Huey”) score is based on more than 300 weighted risk variables for each person. They include prescription drug use, medical diagnoses, and disability and workers’ comp time — in addition to the cost of health benefits. A diagnosis of lung cancer, for example, immediately gets full weighting in a person’s HUI score, although big expenses come months later.

Health Management

The index is the cornerstone of our 5|50 SolutionTM because it identifies people in the 5% of the population who account for 50% of healthcare costs and those who soon will be in that group. Constant risk monitoring flags individuals with rising HUIs so that they can be provided prevention and primary care services sooner via our KnovaSolutions® clinical prevention service.

Clinical Decision-Making

More and more healthcare organizations such as hospital groups, HMOs, and on-site workplace clinics are using individual HUI scores at the point of service to support clinical decisions and monitor health outcomes. If a patient has a HUI of around 1.0, a doctor instantly knows it’s someone with average risk. A score of 2.0 or higher alerts the provider that the patient may have multiple diagnoses and a complex set of prescription drugs.

Risk-Pool Assessment

Our research found that the premiums for many health insurance plans offered on public exchanges this year were substantially lower than 2013 medical costs for the enrollees. In one case, expenses per person were 20% higher than premiums. A review showed that HUI scores for the covered population were significantly higher than average. The insurance carrier thus could factor HUI scores into pricing and reduce the risk of losses.

Data as a Service (DaaS)

Human Capital Risk Index® (HUI) scores are delivered to providers at the point of care via Data as a Service (DaaS). HCMS provides a real-time data service to deliver HUI via a stand-alone web interface, as well as via an Application Programming Interface (API) that allows HUI to be embedded in EMR/EHR software as well as other web applications. Common interoperability standards such as XML are supported. Contact your HCMS account team for more information.

Research Findings

Foster-Teen Pregnancies Are 5 Times the Rate for Other Girls

Teen pregnancy rates among foster children may be higher than previously thought. More than one in five teenage girls in foster care had a pregnancy in our study of Wyoming children ages 14-18.

Click here to read the full post.

Website Update

We are pleased to announce that our website will be updated by the end of this week. The update will include a new design, introduction video, and success stories. Please be sure to visit in the next few days to see the latest content.

Dr. Hank Gardner Named Distinguished Alumnus by University of Wyoming

Dr. Hank Gardner was recently honored as a distinguished alumnus by the University of Wyoming. He is one of three alumni who was recognized at the Homecoming festivities in Laramie, Wyoming the weekend of October 18th.

Gardner attended UW on academic and athletic scholarships and went on to the University of Rochester School of Medicine & Dentistry in upstate New York.

Beyond his work at HCMS, Gardner has been an Army doctor in Vietnam, a pioneer in the managed care movement in Western New York, a leader in community health initiatives in Detroit, and a healthcare entrepreneur in New York City.

KnovaSolutions in Action:
Improved Health Ownership & Averted Surgery

AllergiesA KnovaSolutions member who presented with mold, pollen, and grass allergies complicated by chronic sinusitis was with months of fatigue, poor quality of life, and failing job performance. Frequent visits with an ear, nose, and throat specialist and an allergist resulted in several medications with no real improvement and that added to his fatigue. Sinus surgery was recommended but without any real assurance that it would fix the problem.

The KnovaSolutions information and support service helped him take control of his health by identifying and documenting his sinus and allergy symptom patters and triggers. Non-drowsy allergy medication options were discussed as well as home remedies and lifestyle adjustments in the home such as using a humidifier and using the air conditioning over having the windows open.

These health management actions resulted in improved sinus symptoms by avoiding triggers and using several home remedies. He has stopped using his prescription allergy medication and sees his primary care doctor regularly to follow up. He avoided sinus surgery and reports having more energy and is able to engage in his normal work and leisure activities.

Click here to view or download this newsletter as a PDF.

Foster-Teen Pregnancies Are 5 Times the Rate for Other Girls

Foster-Teen Pregnancies Are 5 Times the Rate for Other Girls


Teen pregnancy rates among foster children may be higher than previously thought.

More than one in five teenage girls in foster care had a pregnancy in a study of Wyoming children ages 14-18, according to HCMS Group. The girls’ pregnancy rate was almost five times the rate for teenagers covered by the Wyoming health plan for state employees, and 11 times the rate for girls covered by private medical insurance in the state.

National data on pregnancies don’t break out foster teens. One often-cited study found that girls in foster care in Iowa, Illinois and Wisconsin were 2.5 times as likely to become pregnant as those not in foster care. Among all girls ages 15-19, the pregnancy rate in 2010 was 5.7%, the authoritative Guttmacher Institute in New York reported this year. In Wyoming, the rate was 5% among girls covered by the state health plan, 2% for those under private insurance and 22% for foster teens.

The analysis of teen pregnancy rates in Wyoming may be the first based on statewide data. The study covered more than 7,500 girls between January 1, 2003, and December 31, 2013. HCMS Group maintains a research reference database that includes Wyoming records from private medical plans, the state-employee program and Medicaid, which covers children in foster care. Wyoming is the least populous state with 583,000 people.

Among child welfare professionals, there’s little mystery to why pregnancy rates are much higher for foster children. Those who have studied the matter cite the combination of unstable living situations, adolescence, and exposure to sexual abuse. There is also a lack of training for foster parents in teaching girls about self-protection and self-esteem. Some of the pregnancies are accidental, and in other cases girls set out to fill a void in their lives by creating a family of their own, studies have shown.

Wyoming Teen Pregnancy Rates

As the Wyoming girls reached the ages of 16-18, the rates jumped to between 25% and 29%, according to HCMS. For girls 16-18 who were covered by the state health plan, the rates were 6% to 7%, while those with private benefit programs had rates of 3% to 4%.

“Many people forget this is not the immaculate conception,” said Eileen Mayers  Pasztor, professor, School of Social Work, California State University, Long Beach, who has long studied and worked in the child welfare field. “There always is a father, and where is the training for young men regarding self-esteem and responsibility and fatherhood? There also is the issue of social justice when teenage girls become pregnant and their babies’ fathers are over 18 years of age; isn’t sex with a minor rape?”


— Robert L. Simison, HCMS Communications

On behalf of HCMS Data Analytics





The HUI Risk Index: The Magic Number for Health Management

The HUI Risk Index: The Magic Number for Health Management


HCMS Newsletter September 2014

To address the 5|50 problem (the 5% of any population that accounts for more than 50% of health benefit costs), it’s necessary to identify who is in the high-risk group, or soon will be. Our Human Capital Risk Index® (HUI, patent pending) is uniquely designed to do just that, and data compiled by HCMS proves the predictive power of the index as the foundation for our 5|50 Solution™.

Conceptual Basis

The HUI (pronounced “Huey”) grew out of a different understanding of healthcare from other risk metrics. Others focus on the cost of diseases and actuarial studies of demographics such as age and gender. They don’t consider the whole person and economic incentives.

Econometric. The HUI reflects the role of behavioral economic incentives in healthcare—for patients and providers. In addition to disease, the HUI incorporates data on health-benefit design, compensation systems, and time-off policies.

Person-centered. Our philosophy is that risk assessment must take into account the whole person, not just specific diseases, including compensation and work history.

What It Is

Based on more than a decade of research on 4 million people, the HUI risk index incorporates more than 300 weighted risk variables for each individual. These include medical diagnoses, prescription drugs, compensation, and use of disability and workers’ comp.

A person with average risk has a score of 1.0. For example, someone with diagnoses of lung cancer and asthma, taking antibiotics and breathing drugs, and with a history of workers’ comp and disability time off has a HUI of 8.35.

How It Works

Its design makes the HUI not just a measure of risk but more importantly a predictor of risk. Metrics based on medical claims are lagging indicators because of delays in the payment system. In our 5|50 Solution, monthly risk monitoring identifies individuals whose HUI scores begin climbing. These people can then be provided prevention and primary care service earlier.

Research Findings

Health Insurance Exchanges Increase Risk of Workers’ Compensation Claims

Click here to read the full post.

In Search of the Best Hospitals

How do you evaluate provider performance? Click here to read the full post.

Member Center Update Includes HUI Scores

We are happy to share that members in KnovaSolutions, the clinical prevention service of the 5|50 Solution, now have access to their individual Human Capital Risk Index (iHUI) score via the KnovaSolutions Member Center. The Member Center is a confidential portal that provides a safe, secure way for members to communicate with their KnovaSolutions Clinical Team.

With the addition of the iHUI, the Member Center provides members with better information to understand the impact of their healthcare decisions. The iHUI stresses the importance of owning one’s own health and being as an active and informed healthcare consumer. By measuring personal progress in health management using the HUI, individuals can monitor their health status.

As iHUI is added to the Member Center, our employer clients will receive an invitation for an iHUI member center orientation and to discuss the rollout of the iHUI to employees. If you have not already been contacted to schedule an orientation, you will be soon.

KnovaSolutions in Action: Improved Health & Caregiving

A KnovaSolutions member enrolled in the clinical prevention service with high blood pressure, elevated cholesterol, chronic back pain, and lost work time. His wife suffers from a brain injury and could no longer care for herself. Results were sleepless nights, frequent sick days, and costly medical bills.

His KnovaSolutions nurse informed him of resources that were available to assist him with night-time caregivers and medical equipment. They also discussed lifestyle changes and stress-relieving strategies to help him manage his own health.

Today, the member has hired night-time caregivers through a community program that fit within their budget. He is now sleeping better at night and has been able to miss less work. His back pain has improved due to the lifting equipment provided by the community program. With reduced pain, less stress, and a commitment to a healthier diet, his blood pressure and cholesterol have stabilized. In general, he has a healthier life.

We’re Now on Twitter

We now have a company account on Twitter. Follow @HCMSGroup to read the latest research findings, company news, and relevant health and human capital news from the community.

Hank Presents at MedX

Hank at MedXDr. Hank Gardner unveiled HUI for the first time before an academic healthcare conference at Stanford University’s MedX Conference on September 6.

Gardner outlined the unique features of the HUI metric (patent pending) before more than 100 people attending the conference. Read more here.




Click here to view or download this newsletter as a PDF.


KnovaSolutions Member Center Login KnovaSolutions Member Center Login  
O|BI Client Login O|BI Client Login

Copyright © 2017 HCMS Group LLC.

All rights reserved.