Chapter 4: Opening Vignette, Highmark, Inc.
1. Why are companies such as Highmark using data mining applications?
Highmark, one of the largest health insurers in the United States, uses data mining applications to analyze patient data which could possibly lead to better managed care at lower costs. The company uses data mining applications to make it easier for them to find the connections certain diseases have to each other. According to Turban (2008), “Data mining used at Highmark will draw a relationship between a diabetic patient and other parameters’ (page134)”. Data mining helps Highmark distinguish the right diagnoses for each patient, which in turn gets reimbursement from the Medicare and Medicaid. The name of the system that Highmark uses is SAS enterprise miner. According to an article on SAS.com (2011), Highmark director Brian Day states, “Using SAS, we can identify which cases have the highest probability of reimbursement potential. Our revenue management area would then submit a change and receive proper reimbursement." Other health care organizations are using predictive software to predict who is likely to become sick, and be expensive to treat in the future.
Data mining applications can greatly benefit all parties involved in the healthcare industry. For example, data mining can help healthcare insurers detect fraud and abuse, healthcare organizations make customer relationship management decisions, physicians identify effective treatments and best practices, and patients receive better and more affordable healthcare services” (Koh, Tan, 2011).
Other health insurance companies such as Highmark use data mining applications for other reasons. The U.S. branch of a British health insurance company, Aviva PLC, looked at 60,000 insurance applications. By using data mining, they were able to use consumer-marketing data to predict a person’s risk for illnesses such as high blood pressure. They assumed that many diseases are caused by lifestyle...