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

Foster Care

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 — HCMS Newsletter September 2014


September Newsletter 

Health & Economics… Connecting the Dots

The HUI Risk Index: The Magic Number for Health Management 

HUI Risk IndexTo 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.

Health Insurance Exchanges Increase Risk of Workers’ Compensation Claims

Sick in BedUsing private health insurance exchanges to hold down corporate health benefits spending results in higher use of workers’ compensation, researchers at HCMS Group found.

An analysis of private-employer data in the HCMS Research Reference Database showed that workers who selected health insurance plans with lower monthly premiums and higher deductibles filed more claims for workers’ compensation than the year before. Most of the people in the study opted for the less-expensive plans, designated bronze and silver under the Affordable Care Act.

Many American self-insured employers opted into private insurance exchanges in an effort to reduce their exposure to volatile and surging healthcare costs fueled by the healthcare law. Private exchanges are similar to the public exchanges established under the legislation. Notable employers using these exchanges to replace risk-bearing self-insurance plans include Sears Holdings, Darden Restaurants, Petco Animal Supplies, and IBM. These companies gave workers subsidies for buying health insurance from a menu of four or five plans, typically engaging a consulting firm to set up the exchange.

The HCMS findings show how medical-cost risk can migrate from one expense category to others, as documented years ago by HCMS. To prevent that from happening, employers need integrated health benefits data to carry out a comprehensive health benefits overhaul. This should take into account not only medical benefits but also incentives related to workers’ compensation and short-term disability. HCMS research shows that employers can lower total benefit costs by 10% to 15% by offering a single aligned-incentives health plan with a health account, incentives to use primary care and prevention services for complex medical situations, and a deductible design that favors value-based use of hospitals and specialists offering the best care at the lowest cost.Change in Lost Time for Bronze and Silver Plans

HCMS researchers compared expenses from the first five months of 2014 with those from the first five months of 2013. People with high-deductible health plans filed 8.1% more claims for workers’ compensation in the 2014 period than a year earlier. This suggests that people migrated to the workers’ compensation system in response to cost-sharing incentives. That happens mostly with musculoskeletal conditions (such as back injury or pain and carpal tunnel) where patients and providers have leeway to say whether it is work-related or not. If chalking a condition up to work avoids out-of-pocket expense to cover a deductible, then workers have an incentive to do so.

Bottom line for employers: The study shows that reducing the risk of healthcare costs is more complex than simply steering workers to medical insurance exchanges. These systems will push some of that risk back to employers in the form of increased use of workers’ compensation and lost time benefits. This should be a major factor for employers in deciding on healthcare exchanges.

– By Robert L. Simison, HCMS Communications
On behalf of HCMS Data Analytics

In Search of the Best Hospitals

Hospital Center of ExcellenceNew HCMS research provides an answer to one of the most vexing questions involving healthcare cost and quality: How do you evaluate provider performance?

Benefit providers and employers have increasingly embraced the idea of steering patients to “centers of excellence,” or providers that deliver the highest quality of care at the best prices.  However, providers often resist evaluation on cost and quality performance because the risk of their patients can’t be accurately measured and therefore the performance outcomes are flawed.

HCMS Group’s individual health predictive risk metric provides an answer to that objection. The HCMS Human Capital Risk Index® (HUI, patent pending), can measure how well any medical provider–hospital, specialist, primary care provider–manages the cost and quality risk of patients. The HUI risk index is based on more than 300 personal characteristics including medical diagnoses, prescriptions, and health benefits use.

HCMS researchers evaluated a regional group of nine hospitals. The hospitals had average patient HUI scores several times higher than the overall average score of 1.0 for the general population (see table below). The average cost of a broad mix of hospitalizations ranged from $13,080 to $75,726 per person. The data was from the HCMS Research Reference Database, which includes almost 4 million people covered by more than 200 employers.

Researchers adjusted the cost totals to account for the different risk profile of each patient. The calculation produced a Value HUI (V|HUI) that links cost to the patients’ risk profiles. On this basis, the two top-rated hospitals had risk-adjusted costs of $4,410 and $4,791, putting them in the range of the most effective institutions that HCMS has studied. The lowest-ranked institution had a risk-adjusted cost of $12,116, almost three times as high as the No. 1 provider.

The V|HUI calculation provides an indirect measure of quality. Lower cost relative to individual patient situation suggests less bouncing from specialist to specialist and fewer unnecessary procedures and medications, all of which increase expenses and subject patients to more risk. There is no direct method of rating healthcare quality. The most-often used evidence-based medicine guidelines don’t measure the right things, are subject to small sample sizes, and don’t account for individual conditions.

HCMS researchers also compared the findings with the results of a self-reporting tool widely used for ranking hospitals. There was no correlation. The top hospital based on the self-reporting index ranked 6th in the V|HUI ratings. The two best institutions based on V|HUI scored in the middle and at the bottom of the self-evaluation scale.

HCMS Study of 9 Regional Hospitals

Centers of Excellence Hospital Comparison

Employers and benefit providers can provide economic incentives in the form of deductibles and cost-sharing to encourage patients to use top-rated hospitals and providers. Further research will refine the analysis to identify centers of excellence in specific procedures of the sort that business groups and insurance companies have singled out, such as hip and knee replacement; bariatric, spine, and transplant surgeries; and cancer treatment.

To learn more about how to evaluate centers of excellence in healthcare reform, listen to our webinar recording here.


– Robert L. Simison, HCMS Communications

On behalf of HCMS Data Analytics



The 5|50 Solution: A Comprehensive Solution to a Complex Problem — HCMS Newsletter August 2014


August Newsletter 

Health & Economics… Connecting the Dots

The 5|50 Solution™: A Comprehensive Solution to a Complex Problem 


Five percent of any population accounts for more than 50% of employer benefit costs (the 5|50 problem). Individuals in this 5% group typically do not have a primary healthcare provider, so their treatment tends to be fragmented. These people often receive disability compensation, and they average 10 providers, 11 diagnoses, 32 tests, and 10 medications annually.

What We Know

We recently announced our 5|50 Solution™ as the unified package of our advanced data analytics and clinical prevention services. This combination offers employers and individuals a rational, data- and economics-based way of addressing the 5|50 problem.

Using our data analytic capabilities, we also know that half of the money being spent on the 5% group is probably putting individuals at higher risk—rather than contributing to health improvement.
This also drains valuable resources and is part of the reason why the U.S. spends 30% more on healthcare than comparable countries, without similar gains.

Economics and Health

People have inherent capacities to contribute to family, work, and the community (their human capital). Since people will do what is in their best interest, it’s important to understand the economic incentives that are embedded in health benefit policies and how they influence individuals.

Our Human Capital Risk Index (HUI®, patent pending) takes those policies into account along with roughly 300 other variables to identify people at risk of entering the 5% group. We can then provide them with clinical prevention services through KnovaSolutions® to help them return to health while reducing costs.

5|50 Solution Values

  • People matter for their human capital abilities and motivations, both in and out of the workplace.
  • Prevention is the best medicine.
  • Economic incentives are important to understand.
  • Healthier people and less wasteful spending are in everyone’s best interest.

Research Findings

Education and Health
Health risks for people with a college degree are 20% to 30% lower than for those with a high school education. The finding is based on our Human Capital Risk Index® (HUI, patent pending) and verifies previous research results. Click here to visit the full post.

Health and Performance
There’s a strong link between better health and better job performance, according to research based on HUI scores and year-end evaluations. It may be that high performance relates to self-responsibility for health, or that illness hurts productivity. Click here to visit the full post.

Data Center Enhancements

We are excited to announce significant upgrades to our primary data center, enhancing security and adding capacity for growth. In the process, we are relocating the data center to a new, state-of-the-art facility in Cheyenne, Wyoming. This will result in greater physical and network security, provide for expansion, and dramatically improve redundancy and fault tolerance in critical infrastructure resources—power, internet connectivity, and cooling.

The new data center is operated by Green House Data—one of the most energy-efficient data centers in the world, 100% powered by renewable energy. With a dry climate, easy access to all major cross-country fiber-optic cable lines, Cheyenne is an optimal location for a green data center. We are pleased to be one of the first tenants in this new Wyoming resource.

KnovaSolutions in Action: Better Health, Less Stress

A middle-aged female reported feeling overwhelmed by heart, lung, and more than a dozen other conditions when she joined KnovaSolutions in 2012. Her annual benefits were costing $29,200 at the time. She was seeing 13 specialists and taking 15 prescription medications. With a HUI score of 3.5, her health risk was 3.5 times that of the average person. She had 17 diagnoses that included cardiovascular, respiratory, depression, and musculoskeletal conditions.

Over the course of a year, her dedicated KnovaSolutions team consisting of a nurse, a pharmacist, and a medical research librarian spent 18 hours consulting with her by phone. She is now using a primary care provider to coordinate her care. She has reduced the number of prescription medications she is taking to 8 and decreased her overall risk by 37%. She reports feeling healthier and much less overwhelmed. Her annual benefit costs have fallen by 80% and now total $5,649.

HCMS Update

HCMS Group Colorado Office

HCMS opened an additional office in August in Loveland, Colorado. The new location houses many of our Colorado staff members, including data analysts and account managers. The new facility reflects the firm’s growth and provides space for continued expansion of the staff to meet the needs of new clients.

We are pleased to welcome Robert L. Simison to our team as a communications consultant. Bob’s very successful career has included work as an investigative reporter at The Wall Street Journal and Bloomberg News. He has a degree in journalism from the University of Kansas.


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

Healthcare Reform Webinar Series Video 5: Centers of Excellence and Finding the Best Care

In the fifth webinar in our healthcare reform series, Dr. Hank Gardner, Dr. Tim Ryan, Rene Sims, MSN, RN, and Justin Schaneman, MS discussed centers of excellence and how clinical prevention plays a role. Watch the video recording to hear how centers of excellence are commonly evaluated and learn a new way of evaluation that measures how efficiently healthcare networks/providers manage patient risk.

For HD viewing, please click on the video and then click on “HD” in the bottom right of the pop-up window. The HD button will be blue when it is turned on.

Have any questions or comments? Leave a comment and we’ll be sure to get back to you.

To see the other videos in this series, please click here.

Which Comes First — Better Health or Better Job Performance?

Better Health or Better Job PerformanceThere’s a strong link between better health and better job performance, according to a study by HCMS Group.

People who rated in the top 20% on year-end performance reviews also had the lowest medical costs and the lowest health risk scores, HCMS researchers found. The analysis covered several thousand professional workers in the HCMS database over 12 months. The performance evaluation system classified the group in three performance bands—the lower 20%, middle 60%, and upper 20%.

There are two ways of looking at the findings. One is that high job performance correlates with a high sense of responsibility, so the better workers try harder to maintain good health. The other is that healthier people are simply better able to perform at a high level in the workplace, while for others illness may cause productivity to suffer.

There’s been relatively little research on the connection between work performance and health. One study by Brigham Young University’s department of health science found that employee engagement, health behavior, and physical health were significantly associated with job performance and absenteeism. The research was based on 20,000 employees of three U.S. companies who completed surveys between 2008 and 2010.

For each of the three performance groups in the HCMS study, researchers calculated the average annual medical costs and the average risk score, using the Human Capital Risk Index® (HUI, patent pending). The HUI score takes into account about 300 variables for each individual, including medical diagnoses, health plan costs, compensation policies, and use of disability and workers’ compensation benefits. The average risk is 1.0.

Risk Score Health Plan Cost by Performance Group

Medical costs for the entire group averaged $5,455 for the year. Those in the top-performing 20% had average health expenses of $4,100, more than a third lower than the middle group’s $5,600. People in the lowest performance band had healthcare costs 41% higher than those in the middle band.

Similarly, the HUI risk scores average 1.0 for the top-performing group, or 17% lower than for those in the middle group. The lower-rated band had average risk scores 17% higher than those in the middle. The research also found that those in the middle and lower performance groups were two to three times as likely to have a disability claim. Workers’ compensation filings were twice as high for the bottom group as for the upper two categories.


– Robert L. Simison, HCMS Communications

On behalf of HCMS Data Analytics


Higher Education, Lower Risk to Health

Human Capital Risk Index EducationA college education doesn’t just raise your earnings potential. It may also lower your risk of poor health.

Health risks for people with a bachelor’s degree are 20% lower than for those with a high school education, and more than 27% lower than for people who didn’t finish high school, according to research by HCMS Group LLC. Holders of doctorates have risk scores 10% lower than for people with a bachelor’s degree.

The findings are based on the HCMS Group research reference database. Health risk reflects the company’s Human Capital Risk Index® (HUI, patent pending). The index weights more than 300 characteristics on each individual, including clinical diagnostics, medical and pharmacy benefit use, workers’ compensation claims, and disability time used. A score of 1.0 represents average risk across the entire database of 3.7 million people. The analysis of education level was based on a database subset for which the average risk score was higher than 1.0.


HUI Risk Scores by Education Level

For people who didn’t complete high school, HUI risk scores were 1.82, almost double the overall mean. The lowest score for any group was 1.19, for those with Ph.D.’s.

Other researchers have documented the link between higher education and better health. This month, the National Bureau of Economic Research published a working paper, “Education and Health: Evaluating Theories and Evidence.” The authors calculated that the health returns on education increase education’s total value by 15% to 55%. Earlier research sponsored by the Robert Wood Johnson Foundation examined the role in this phenomenon of health knowledge and behaviors, employment and income, and social and psychological factors.

The conventional wisdom is that a higher degree of formal education correlates with a higher degree of health knowledge. Our research also suggests a significant compensation impact. Employees with a higher level of education are more likely to have higher-paying jobs with more compensation at risk through incentive compensation structures. These workers have a stronger incentive to protect their health to ensure continuing success.

The HUI score, based on more than a decade of research by HCMS Group, is the most accurate person-centered risk score available. It is central to the company’s 5|50 Solution™ which is designed to address the 5% of any population that accounts for 50% of employer’s benefit costs.

– Robert L. Simison, HCMS Group Communications

On behalf of HCMS Group Data Analytics.


Can a Backache Be Contagious?

Contagious BackacheIf you have a backache, a knee sprain, or some other injury to the body’s structure of bones, joints, and muscles, the risk that someone else in your family has such an injury rises by more than a third.

That’s what researchers at HCMS Group LLC discovered in analyzing healthcare data on more than 3.7 million people whose medical benefits were provided by more than 200 employers. They found that when a covered employee has medical costs for treating a musculoskeletal condition, there’s a 27% likelihood that a dependent will, too. That compares with a 20% risk for dependents when the employed family member doesn’t have such an injury.

Among dependents, the risk is higher for adults than for children, but the findings are consistent across all groups. (See figure 1 below.)

Likelihood of Dependent Musculoskeletal Cost

For more than a century, economists and psychologists have observed a contagion effect in social networks and workplaces. One 1996 study found that health symptoms often spread through groups of workers without any physical cause. In 2000, researchers, led by Dr. Hank Gardner,  the CEO and principal owner of HCMS Group, analyzed data on claims for workers’ compensation and family leave. They found evidence that workers learning from each other about the benefits fueled a contagion effect in filing of claims.

With respect to musculoskeletal conditions, multiple cases within a family can have significant cost ramifications. Average annual expenses for treatment of these conditions range from $500 to $55,087, according to HCMS Group research. The low end of the scale is for the healthiest 50% of the population. At the high end are those in the 5% of the population who account for 50% of healthcare costs. People in this group have an average of 10 other conditions, with several medications and specialists involved in their treatment. (See previous blog post. For information on HCMS Group’s 5|50 Solution™ designed to address this problem, click here.)


– Robert L. Simison, HCMS Group Communications

On behalf of HCMS Group Data Analytics


This is the final installment in the series on musculoskeletal discoveries. Please visit the links below to read the other posts in this series:

1. Musculoskeletal: Top Contributor to Total Claim Costs

2. Musculoskeletal Costs Nearly Twice that of Condition-Specific Costs

3. The $55, 087 Backache


Healthcare Reform Webinar Series Video 4: The Importance of Primary Care

The fourth video in our healthcare reform webinar series focuses on the importance of primary care. Watch this live webinar recording of Dr. Hank Gardner, Dr. Nim Patel, Shawn Petrini, MSN, RN, and Justin Schaneman, MS as they discuss a market solution for healthcare reform, primary care and clinical prevention analyses, key issues with primary care usage, and clinical prevention’s synergy with primary care.

For HD viewing, please click on the video and then click on “HD” in the bottom right of the pop-up window. The HD button will be blue when it is turned on.

Have any questions or comments? Leave a comment and we’ll be sure to get back to you.

To see the other videos in this series, please click here.

The $55,087 Backache

It costs an average of $55,087 a year to care for the sickest Americans who have a backache or some other injury affecting the body’s structure of muscles, joints, and bones. That is according to data compiled by HCMS Group on 3.5 million people, and the total is more than 100 times the cost for treating similar conditions among the healthiest Americans.

Why? It’s because people in that part of the population typically struggle with multiple conditions that complicate treatment, HCMS research shows. (See earlier blog post). This group amounts to about 5 percent of Americans, and yet they account for half the medical spending. By contrast, the healthiest group includes 50 percent of the population and spends relatively little on health care. (See overview of population risk analysis).

Figure 3 contrasts the expense of treating musculoskeletal situations with spending on all other conditions. The population is broken into groups based on where they rank in total costs of all medical treatment.

Figure 3: Average Annual Cost for Musculoskeletal and other Conditions, by Spending Group

Further analysis of the data shows that the risk of back or other muscular and skeletal problems is also much higher among the 5 percent who are the least healthy. HCMS Group’s proprietary Human Capital Risk Index®, or HUI, takes into account more than 100 characteristics for each person, including diagnoses, use of medical care, drug prescriptions, and claims for disability and worker’s compensation. A score of 1.0 represents the average risk of the population as a whole.

In Figure 4, the risk of musculoskeletal problems among the sickest group is four times as high as among the healthiest. Across all four groups, the risk of having this kind of condition exceeds that of all other illnesses combined.

Bottom-line takeaway: The difference between a $500 and a $55,087 backache lies in who has it and what other conditions affect that person. The research findings show that healthcare programs need to be designed around holistic primary and preventive care centered on individuals. The programs should also incorporate a tool for identifying those most at risk—the comprehensive HUI score—and a system for helping these individuals to prevent, manage, and recover from their conditions.

Figure 4: Human Capital Risk Index® (HUI) Score for Musculoskeletal and Other Conditions, by Spending Group


– Robert L. Simison, HCMS Communications

On behalf of HCMS Data Analytics


Healthcare Reform Webinar Series: Video 3

The third video in our healthcare reform webinar series, The Pathway to Implementing a Single “Aligned Incentives” Health Plan, reviews why having this single health plan delivers the best results.

Watch this live webinar recording as Dr. Hank Gardner, Justin Schaneman, and Neil Sullivan discuss, analyze, and evaluate population risk, actuarial versus econometric modeling, the health insurance exchanges, and health risk assessments.

For HD viewing, please click on the video and then click on “HD” in the bottom right of the pop-up window. The HD button will be blue when it is turned on.

Have any questions or comments? Leave a comment and we’ll be sure to get back to you.

To see the other videos in this series, please click here.

Musculoskeletal Costs Nearly Twice that of Condition-Specific Costs

The figure below shows total musculoskeletal costs in comparison to other major chronic conditions for a collection of large employers in the HCMS Group Research Reference Database (RRDb). Musculoskeletal costs rank among the highest with respect to co-morbidities and disability costs, with co-morbidity costs nearly twice that of condition-specific costs.

Figure 2: Top Condition Co-Morbidity Analysis

The co-morbidity analysis emphasizes the need to treat the individual, not a specific condition. In the case of musculoskeletal conditions, common co-morbidities include obesity, diabetes, and hypertension. Treating theses diseases individually is therefore inefficient; an effective treatment plan needs to address the individual.

Musculoskeletal: Top Contributor to Total Claim Costs

Our next Health as Human Capital research blog entries will focus on people with musculoskeletal conditions. Using Major Diagnostic Category (MDC) disease classification, figure 1 illustrates the aggregate cost of musculoskeletal diseases compared to other common disease conditions. Musculoskeletal claim costs consistently contribute to over 20% of all medical spending, costing nearly twice as much as the next leading category. Musculoskeletal conditions are comprised of several conditions ranging from medically well-defined arthritis to medically poor-defined repetitive-motion injuries. Each circumstance represents a different treatment challenge.


Figure 1: Percent of Total Medical Spending by Major Diagnostic Category

Percent of Total Medical Spending by Major Diagnostic Category


Optimal Number of Primary Care Visits?

Optimal Number of Primary Care VisitsIntroduction

With the increasing interest in learning how to improve the use of primary care, we have modeled the optimal number of annual primary care visits related to Health Plan Costs as shown in the graph below. Increasing primary care is a key element in the HCMS Aligned Incentives Health Plan as described in our webinar series (please click on these links to view the first and second webinar recordings in our healthcare reform series).

Healthcare Reform Webinar Series: Video 2

In the second webinar in our healthcare reform series, HCMS Group CEO Dr. Hank Gardner and VP of Data Analytics Justin Schaneman discuss the Data Analytics used in the successful implementation of effective healthcare reform.

Watch this live webinar recording and listen to a detailed analytic discussion on health plan selection bias, primary care, econometric modeling, population risk analysis, and more.

For HD viewing, click on the video and then click on “HD” in the bottom right of the video. The HD button will be blue when it is turned on.

To see the other videos in this series, please click here.

Advantages of a Bundled Paid-Time-Off (PTO) Plan

Advantages of a Bundled PTO PlanBackground

High instances of sick leave and vacation leave are significant contributing factors to high employer benefit costs and low employee productivity. Various HCMS Group studies have shown that bundled paid-time-off (PTO) plans, as opposed to plans with separate banks for sick and vacation time, are associated with reduced absences, lower health plan costs, and increased employee productivity.

Isn’t It Time You Knew… How Employee Tenure Status Drives the Use of Health Benefits?


The Analysis

When an employee is about to be terminated, their consumption of health benefits increases by over 50%. Previous HCMS Group research indicates that the difference in cost for terminating employees is largely due to the incentives generated by their pending change in benefits coverage (55%). The rest of the cost disparity is explained by differences in health status (roughly 30%) and demographics (roughly 15%). Figure 1 below illustrates the annual cost of employees in each population cohort: new hires, steady population, and terminated. The employee costs for terminated employees are calculated in the year prior to termination.

Isn’t it Time You Knew… How Employee Compensation Impacts Human Capital Risk?


The Analysis

Figure 1 illustrates the relationship between the HCMS Human Capital Risk Index® (HUI) and employee compensation. The HUI uses a broad set of person-centric integrated medical, pharmacy, and lost time metrics (including disability data) to produce the HUI risk score. The HUI score adjusts for most demographic variables such as age and gender.

Isn’t it Time You Knew… How Health Plan Design Impacts Employee Work Performance?



Health plan design not only impacts employee engagement and lost time, but also how well year-end productivity goals are met (or not met). When it comes to the three health plan types featured below, high-deductible health plans produce the most engaged and highest-performing employees.

Most Likely to Exceed Year-End Goals

Employees that choose a high-deductible health plan (HDHP) show increased engagement at work, are on the job the most and, as shown in Figure 1 below, also exceed year-end work goals more than employees who choose an Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO) health plan. More than twice as many HDHP employees exceed year-end goals than HMO employees.