Predictive Analytics Case Study: Andrew M. Webster, MS, ASA, MAAA
Andrew M. Webster planned to build a career discovering and designing new materials. But one presentation changed his professional calling.
An electronic medical record company visited his college and recounted how half of New Orleans hospitals lost their paper-based records during Hurricane Katrina. The electronic patient records persisted. Rather than build large scale simulations designing materials, Webster decided to "make a real, immediate difference in healthcare."
He went to work for one of the country's largest electronic medical companies and earned a master's in actuarial science.
Actuaries provide "near-real time cost surveillance" for health insurers. They also add quality assurance, the ability to judge machine processing - overcoming any statistical pitfalls or biases - and they can look into the future to offer reasonable forecasting.
In 2014, Webster put all those skills to the test when he founded Validate Health. His company gives health providers access to actuarial modeling and predictive analytics that help optimize their profitability in the face of shrinking margins. Tapping into newly-available clinical data sources, and automated workflow technology, Webster and his team help providers establish focused interventions that save clients from preventable financial risks.
For one project, Validate Health culled and evaluated medical and pharmacy claims data to identify patient trends. They found that for a certain class of drugs, the setting where 25 patients received care had a million dollar consequence for the plan sponsor's bottom line.
Once the team discovered the problem, Webster said it was easy to intervene, create a targeted program and monitor its progress.
Webster's team found that by rerouting those patients requiring a very specific infusion drug from a hospital outpatient setting to a clinic, their client could recover the $1 million while still ensuring patients received the right level of care.
In another case, Webster's team helped a 20-physician independent practice determine which segment of its patient population was the most costly. It turned out to be a specific Medicare Advantage Plan for patients with Chronic Obstructive Pulmonary Disorder. The practice redesigned its discharge protocol and developed a COPD care management program to help keep patients out of the hospital.
"Without the fair, accurate and timely guidance an actuary provides, they wouldn't know to make these changes," Webster said.
They used that month-long pilot program to prove the value of creating an automated software program that can do the same for other healthcare providers.
One of the things Webster enjoys most about working in health insurance is he doesn't have to sit in the background.
"You don't have to set the premium and then wait for 30 years for someone to die or retire," he said. "You can impact people and their claims as they happen."
Webster doesn't just rely on his actuarial skills. He has also worked in a hospital alongside healthcare providers. He knows firsthand the differences between patients who seek care in long-term acute settings and those who only need preventive care. And he understands the underlying healthcare delivery process.
"I wish every actuary had the time to be on the front lines," Webster said. "We need to take an active role in care and helping our providers do it in a cost-effective manner."
Webster finds an "ethical, philosophical, and meaningful purpose" in his work: enabling healthcare providers to deliver quality care to patients and improve patient outcomes. He believes actuaries can help transform healthcare delivery.
"The technology that's spawning in healthcare leads to incredibly interesting and challenging data for actuaries to work with," he said. "There is unprecedented opportunity for actuaries today."