2024 SOA ImpACT Conference - Session 3D: Maximizing Outcomes with Cost Constraints in Assigning Treatments to Patients in ROI Driven Analysis in Healthcare 10.28.24 Recording

This session includes a new idea based on dynamic treatment regime work (OWL) and integrating cost into this work. This will enable identifying the best treatment for a patient based on both outcomes and cost. This is novel for actuaries because in previous analysis we have used cost only in the after-analysis, whereas here we use it in the actual analysis and treatment identification. Moreover, this analysis provides a way to consider multiple treatments for a patient (including the no treatment option) and choosing among those multiple treatments, for both outcomes and cost. This session will share the background theory and set up a case study. The case study will parallel what is in the analysis in the book by Ian Duncan 'Predicting Hospital Readmission with Case Management Recommendation.' This analysis will then go further to compare a situation where there are multiple potential case managers. Also, this will potentially explore care pathways and choosing the best care pathway for a patient based on health outcomes and cost combined. A popular approach in healthcare is to assign treatment interventions to patients that maximize outcomes. Such treatments typically lead to improved patient status, especially beneficial when the right treatment is assigned to the right patient (at the right time). However, many of the current approaches have focused on health outcomes without considering cost in the formulation. Here we propose an approach that optimizes for both health outcomes and costs. The approach presented here develops on the outcome weighted learning (OWL) work in dynamic treatment regimes. The main idea is to generate treatment recommendation for a given patient cohort, that synthesizes both outcomes and cost considerations of the proposed treatment. This ultimately enables an ROI driven approach for treatment recommendations that actuaries could use in their work offering a more comprehensive framework for decision-making.