New Research: When Integrated Data Meets HR Solutions

New Research: When Integrated Data Meets HR Solutions


Leveraging data has surpassed the scope it once covered, with emerging technology in our work, businesses, homes, and beyond. At HCMS Group, we believe in mastering the art of integrated analytics to show how data can be used to improve health and cost outcomes for both employers and employees for a healthier, more productive workforce. But is there any evidence to back this up? Since we’re a data company at heart, of course the answer is yes.

In a recent study shared with the Disability Management Employer Coalition (DMEC), our team broke down the modern workplace and how organizational systems and processes can improve a business.

Here is some of what we found:

  • The majority of a business’s claim spending comes from the top 5 percent of cases when absenteeism, disability, and workers’ compensation are involved.
  • Our clinical prevention model helps identify individuals who will become high risk and high cost to a business.By using HCMS and its systems, users were demonstrably more likely to feel empowered, take charge of their health, and improve the quality of their lives.

Read the full article in @Work Magazine’s Technology and Integration edition.

HCMS and WorkPartners brings together the power of integrated health and productivity solutions, advanced health analytics, and individualized clinical prevention services to further complement and strengthen WorkPartners’ current service offerings.

Introducing Behavioral Economics to Healthcare

Introducing Behavioral Economics to Healthcare


Dr. Hank Gardner discusses the origins of HCMS Group’s revolutionary approach to healthcare.

What sets HCMS Group’s approach to healthcare apart is the combination of behavioral economics concepts with the holistic bio-psycho-social model for medical practice, Dr. Hank Gardner said in the introductory installment of the periodic HCMS Innovation Vlog.

He described three economic tenets on which the healthcare information company’s work with employers and health organizations is built. They are that there’s no free lunch, so there are trade-offs in costs and priorities; that consumers/patients need to determine priorities in healthcare; and that it’s necessary to keep score by capturing data and analyzing outcomes.

“As benefit costs go up – particularly in the component of healthcare cost that is represented by healthcare waste – resources to pay wages go down,” Dr. Gardner said. “It’s one of the very critical issues American businesses face these days. As benefit costs increase, resources for wages diminish.”

Click here to view the Innovation Vlog.

Foster Teen Research Series – Part 1

Foster Teen Research Series – Part 1


Foster Teen Research Blog Series

Why Are 18-Year-Olds in Foster Care 20 Times More Likely to Have a Child?

Research by HCMS and the Wyoming Department of Family Services shows sharply higher teen pregnancy rates among foster children than previously estimated.

In the year they turn 18, girls in foster care are 20 times more likely to have a child than teens living with their families.

Recently published, peer-reviewed research by HCMS Group and the Wyoming Department of Family Services explores the dimensions of the problem and identifies a surprising new correlation that may help explain it. The study will appear soon in Child Welfare, the research journal of the Child Welfare League of America.

HCMS first looked into this issue three years ago and found that teen pregnancy rates were significantly higher for girls in foster care than previous research suggested. Our initial analysis didn’t identify causes, though other experts have cited unstable living situations, adolescence, and exposure to sexual abuse.

Working with the state DFS, our data analysts Justin Schaneman and Pamela Pendleton subsequently designed a more rigorous study following 5,326 Wyoming girls from the time they were 15 until they turned 19. The analysis, covering more than 11 years, compared foster teens with two groups of girls living at home. One group’s healthcare was covered by Medicaid – as was that of the foster-care group – and a second group had private health insurance.

Here’s what the data showed year by year:

Why were the differences so stark, especially between the foster teens and girls with private health insurance? Based on published research, we suspected a correlation between the pregnancy rates and substantially higher prescribing rates of narcotic, psychotropic, and other drugs for foster children.

We’ll have more on what we discovered in our next post. But here’s a hint: Our research showed that foster teens were four to six times as likely to have a mental health diagnosis as girls living at home and covered by private medical insurance.


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: 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 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 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


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

Copyright © 2019 HCMS Group LLC.

All rights reserved.