Author Archives: HCMS Group

HCMS Group Is Now on Twitter


HCMS Group now has a company account on Twitter. Follow @HCMSGroup to receive the latest research findings, company news, and relevant retweets from the community. We will be using Twitter to enhance our communication with our clients, prospective clients, researchers, and others interested in health and human capital.

If you have any questions, please feel free to email us at


Press Release: HCMS Group Introduces Healthcare Cost, Quality Solution


-For Immediate Release-

HCMS Group Introduces Healthcare Cost, Quality Solution
Predictive analytics combined with clinical prevention services results in cost savings

Cheyenne, WY—HCMS Group LLC this month introduced the 5|50 Solution™ as a system to address the biggest cost problem in U.S. healthcare for employers, healthcare providers, government, and individuals. The program is saving hundreds of millions of dollars annually while improving people’s health.

The problem: 5% of the population accounts for 50% of medical spending, and half of that money is used for treatments that are ineffective or threaten to increase patient risk. The 5|50 Solution combines predictive data analytics with clinical prevention services to offer clients an economics-based way of addressing this problem. The program has cut expenses by 10% to 15%.

HCMS Group, a national health information services company, has developed a unique predictive risk index as the first step in addressing the 5|50 problem. This metric – the Human Capital Risk Index® (HUI, patent pending) – converts more than 300 characteristics including medical diagnoses, pharmaceutical use, and health-related time off into a single number for each individual. People in the 5% high-cost group have HUI scores of 2.0 or higher, double the average person’s risk.

HCMS monitors HUI scores month to month. Individuals with rising risk come to the attention of KnovaSolutions®, the HCMS clinical prevention service. KnovaSolutions’ advanced-degree nurses and pharmacists provide telephone and email support for individuals and families in managing complex health situations. Data shows that the service helps patients to become better healthcare consumers, returning to health more quickly and spending less than those who don’t have the service.


For additional information, contact:

Bob Simison, HCMS Group Communications
(307) 638-0015

Darcy Barnard, HCMS Group Marketing & Sales
(307) 638-0015


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To see this press release on PRWeb, 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 comorbidities and disability costs, with co-morbidity costs nearly twice that of condition-specific costs.

Figure 2: Top Condition Comorbidity Analysis

The co-morbidity analysis emphasizes the need to treat the individual, not a specific condition. In the case of musculoskeletal conditions, common comorbidities 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). Continue Reading


VSP Press Release: Employers Offering Vision Insurance Save $5.8 Billion on Healthcare


Study Finds that Annual Comprehensive Eye Exams Detect Chronic Diseases and Reduce Emergency Room Visits and Hospital Admissions, Saving Employers Billions

Rancho Cordova, California–A recent study conducted by HCMS Group, a human capital risk management firm that analyzes data to help employers reduce waste in health benefits and increase human capital, revealed that employers who offer their employees stand-alone vision benefits experienced $5.8 billion in cost savings over four years due to reduced healthcare costs, avoided productivity losses, and lower turnover rates. 1

The HCMS study determined that individuals who receive an annual comprehensive eye exam are more likely to enter the healthcare system earlier for treatment of serious health conditions, thereby significantly reducing their long-term cost of care. Additionally, people are more likely to get an annual comprehensive eye exam than a routine physical.2

First to Identify Chronic Diseases

Comprehensive eye exams provide the only possible non-invasive view of blood vessels and the optic nerve. As a result, eye doctors can detect early signs of chronic diseases before any other healthcare provider.3 In fact, the study found that eye doctors were the first to identify signs of diabetes 34 percent of the time, high blood pressure 39 percent of the time, and high cholesterol 62 percent of the time in patients.

“With healthcare costs increasing by 89 percent in the past 10 years and employer uncertainty surrounding the impact of the Affordable Care Act, identifying benefits that provide a positive return on investment is more critical to companies than ever,” said Jim McGrann, president of VSP® Vision Care, the company whose member population was analyzed in the study.4 “The HCMS study confirms that employees’ access to a stand-alone vision benefit provides a first line of defense in identifying and managing conditions that are straining our healthcare system and employers’ bottom lines.”

Potential Employer Savings

While the cost of healthcare is projected to rise another 6.5 percent for employers in 2014, HCMS found that employers can help manage these costs through preventive benefits like vision care—producing savings of up to $3,120 per employee over four years.5 The study found that for every dollar invested in a comprehensive eye exam, employers saw a $1.45 return on investment through lower healthcare costs, improved employee productivity, and lower turnover rates.

The HCMS study also found that those who had a chronic condition identified through an eye exam needed less medication to manage their condition and were 26.7 percent less likely to have emergency room visits and hospital admissions versus patients who had diseases detected by another healthcare provider.

About the Study

The study and comparison groups were drawn from a population of 120,000 enrolled employees and spouses of six large commercial clients of both HCMS and VSP Vision Care. The clients represented various industries across the United States, including engineering, technology, retail, financial services, and physical laborers.

HCMS matched vision claims data for members covered by VSP Vision Care to medical, pharmacy and employer data obtained from the clients’ medical and drug carriers.  Over a period of four years, HCMS compared patients whose chronic health conditions were first identified as a result of a comprehensive VSP eye exam against those who entered the healthcare system through traditional means, such as a routine physical.

Parameters: Individuals in the study had an index date between January 1, 2007, and December 31, 2008. They also had to be enrolled in a health plan for the six months prior to and 48 months after their index date to measure health plan and lost-time outcomes. Termination analysis required six months prior to and at least six months after each employee’s index date. The index date was the date they were first identified – either by: 1) a VSP condition indicator, 2) medical diagnosis within 180 days post-VSP exam, or 3) medical diagnosis without VSP exam. Groups 1 and 2 were the study group and group 3 was the comparison group.

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To view this release on VSP’s website, please visit:


About HCMS

HCMS Group, as a privately-held independent business, is the only combined health information data analytics and clinical prevention services company which helps businesses reduce their health benefit costs and support those employees with the greatest health risks. With a Research Reference Database (RRDb) of more than 3.5 million employees and their dependents, HCMS maintains the most comprehensive data for research purposes including human resource, medical, prescription drug, absenteeism, disability, workers’ compensation, and productivity costs. HCMS provides services to employers of all sizes in various industries, health organizations, and government.

About VSP Global

VSP Global® unites industry-leading companies to bring high quality, high fashion eyewear, customized lenses and ophthalmic technology to help people see across the globe. VSP Global companies include not-for-profit VSP® Vision Care, the largest vision benefits and services company with 64 million members and a network of 30,000 eye doctors; Marchon® Eyewear Inc., the 3rd largest manufacturer, designer and distributor of quality fashion and technologically advanced eyewear in the world; Eyefinity®, the largest premier practice management software company for the eyecare industry; VSP Optics Group, industry leaders in new lens technologies, production processes, service and logistics. VSP Global companies operate in 100 countries on 6 continents.


  1. The study’s savings were measured based on multiplying per-employee savings over VSP Vision Care’s entire 60 million member enrollment. The study population was representative of the U.S. population and was spread across the country.
  2. “Preventive Health Examinations, and Preventive Gynecological Examinations in the US,” Archives of Internal Medicine, 2007.
  3. “Onset of NIDDM occurs at least 4-7 yr before clinical diagnosis,” Diabetes Care, Vol 15, Issue 7 815-819.
  4. “2013 Employer Health Benefits Survey,” Kaiser Family Foundation, August 2013.
  5. “Factors affecting 2014 Medical Cost Trend,” PricewaterhouseCoopers, June 2013.

Share in Social Media

  • Vision benefits yield $1.45 return on investment, save companies $5.8B #HealthTalk #HealthCosts
  • Eye doctors are first to detect chronic disease—up to 62% of the time #HealthTalk


VSP Contact:
David Carr

HCMS Group Contact:
Justin Schaneman, Vice President of Data Analytics


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.

Continue Reading


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.

Figure 1: Human Capital Risk by Annual Salary

High wage compensation associated with less human capital risk

When an employee’s income increases, their HUI risk score decreases. A HUI risk score of 1.0 is average. Employees with annual earnings of less than $25,000 have a higher than average HUI score that is almost 15% higher than employees earning greater than $75,000.

While other factors have been shown to influence both health and earnings, this relationship between salary and human capital risk persists even when controlling for education, age, and gender.

Bonuses can reduce risk

Variable compensation, in the form of overtime and performance bonuses, changes the way people behave by creating incentives for workers to engage in health preservation activities to ensure that they are present and their work is rewarded. If an employee is at work, their efforts will be noticed and compensated for. If an employee is absent, they may have missed the opportunity to be productive and earn bonus compensation.

Moreover, an employee that feels fairly compensated for their labor is less likely to try to utilize health and disability benefits in order to make up for the compensation that they feel they deserve.


An employee’s human capital risk can be reduced with higher salary and bonus compensation. Employees with these benefits are incentivized to stay healthy so that they can be at work more (“a day’s work for a day’s pay”).