While big data has the power to transform the health insurance industry, regulators don't often capitalize on the given opportunity.
For instance, big data could help alleviate the burden on insurers and provide a deeper understanding of insurer behavior and consumer experience, finds a report from the Robert Wood Johnson Foundation.
Because the Affordable Care Act includes only data categories and does not outline what specific types of data should be collected and how, regulators need a framework that captures the maximum level of data in a cost-effective manner. The report suggests that regulators need to rely on both traditional summary reports and the current revolution of big data in order to implement the collection of information.
One category listed in the ACA is enrollment information. The law requires insurers to report on enrollment and disenrollment in order to identify outliers or potential trends. Yet to fully implement this requirement, regulators should have access to insurers' raw data--currently, insurers often report limited summary-level data to state and federal officials.
Another category included in the ACA requires insurers to provide information regarding their claims practices. To fully benefit from this information, regulators need to collect the data from insurers at the transaction level. For the most part, states do not collect data on how many claims are denied and their reasons. But if regulators had consistent access to such data, they'd have a better understanding of how insurers handle enrollee grievances, notes the report.
While insurers adopted big data relatively early on, for many regulators, it's an entirely new concept. So instead of an oversight system that relies on insurers compiling summary data reports, regulators should take a new approach via big data and use sophisticated analytics to capture insurers' behaviors.
- here's the report (.pdf)