BOSTON, MA – Interest in population-based health management is growing.

So says, Marilyn Schlein Kramer, president and CEO of DxCG, provider of predictive modeling tools for medical and financial management. DxCG’s software gathers medical and pharmacy claims information so that end users can predict future healthcare needs and evaluate past performance.

“The models have gotten better, data collection is cheaper and there’s more data to do modeling,” Schlein Kramer explained.

But more importantly, at a time when healthcare costs continue to skyrocket, Schlein Kramer said that being able to analyze claims information and predict medical expenses is a timely financial tool for employers, health plans and providers. Schlein Kramer is seeing more and more financial directors, and not just medical directors, looking to predictive modeling as a management tool.

Jocelyn Young, program manager for healthcare IT research for Framingham, Mass.-based research firm IDC, agreed. She noted that the predictive modeling market is in its early stages but comes with the promise of providing more effective patient information and a deeper understanding of health benefits.

Young said that predictive modeling lets health plans better determine their book of business, providers better manage their disease management programs and employers determine more accurately contribution amounts for employees – and cost-effectively purchase health plans.

Health plans are a growing client of predictive modeling tools. Chicago-based Blue Cross and Blue Shield Association signed a contract in October 2003 to license Impact Pro, a predictive modeling software tool developed by Waltham, Mass-based Integrated Healthcare Information Services, a provider of healthcare IT products and services.

BCBSA intends to use the tool to help attain risk and clinical profiles for use in member plans’ care and disease management strategies.

Given the fact that BCBSA comprises 42 independent, locally operated Blue Cross and Blue Shield companies that together provide healthcare coverage for more than 88.7 million people, such deals illustrate the importance of predictive modeling.

A compelling case

Howard Brill is a senior health economist at Rochester, N.Y.-based Monroe Plan for Medical Care, which includes more than 2,700 providers. Brill said that DxCG’s track record in peer-reviewed research papers provided a compelling case for Monroe Plan for Medical Care’s use of DxCG’s predictive modeling tool for identifying candidates for intensive case management in its diabetes disease management program.

While Brill admitted that it’s too early to determine the benefit of predictive modeling with regard to the Plan’s disease management program, he concluded “the research is strong enough to show that predictive modeling is superior to identification based on current utilization to continue and use and expand the use of DxCG for predictive modeling.”

Joan Waranoff, director of health information and performance improvement for San Francisco-based Blue Shield of California, said that BSC chose DxCG’s predictive modeling tool to gain valuable insight into its population and business. BSC is the state’s third largest health plan and has 2.6 million members.

BSC installed DxCG a little over a year ago. Waranoff said that she anticipates BSC developing other applications down the road in the areas of underwriting, financial planning, and case management – areas where predictive modeling is touting its value.