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Fundamentals of Human Resource Management 6th Edition by Raymond Noe, John Hollenbeck, Barry Gerhart,Patrick Wright
Edition 6ISBN: 978-0077718367Fundamentals of Human Resource Management 6th Edition by Raymond Noe, John Hollenbeck, Barry Gerhart,Patrick Wright
Edition 6ISBN: 978-0077718367 Exercise 17
Big Data Looks Like a Sure Bet for Caesars Entertainment
Companies have much more data available to them than they used to. If used properly, this "big data" can be a path to better spending on employee benefits. More and more managers are improving decisions by basing them on data instead of HIPPO (the highest-paid person's opinion) or intuition alone.
Caesars Entertainment is an example of a company using big data to improve its spending on health insurance. The company analyzes patterns in its employees' health insurance claims. They track variables such as the usage of particular medical services, the degree to which employees and their dependents use name-brand instead of generic drugs, and the number of emergency room visits (especially costly, at an average $1,200 for an outpatient visit).
Of course, sometimes an expensive procedure is necessary to protect a patient's health or life. But in the case of emergency rooms, patients sometimes use these facilities for nonemergency conditions that could be treated elsewhere at a far lower cost. A visit to an urgent-care center, for example, costs around $100 to $200. So when Caesars' analysis showed that employees of its Harrah's property in Philadelphia were far more likely to visit hospital emergency rooms than employees company-wide, it investigated.
The data showed that the Philadelphia workers and dependents sought immediate care at urgent-care centers only 11% of the time, versus 34% company-wide. The cost of that care would be far less if more of those Harrah's workers would choose urgent-care centers instead of emergency rooms. So Harrah's conducted an information campaign to remind employees of the high cost of ER visits and to provide them with a list of alternative facilities. Two years later, the use of urgent-care facilities had risen from 11% of emergencies to 17%, and employees were less likely to make multiple trips to the emergency room. Overall, since Caesars started monitoring the data about emergency room use, it has reduced the number of visits by 10,000, and the use of less expensive facilities has cut health care spending by $4.5 million. That kind of savings should translate into lower premiums for health benefits.
Given that the insurance company and employees are the ones paying the bills for emergency room visits, how does encouraging employees to use lower-cost facilities help Caesars reduce its costs
Companies have much more data available to them than they used to. If used properly, this "big data" can be a path to better spending on employee benefits. More and more managers are improving decisions by basing them on data instead of HIPPO (the highest-paid person's opinion) or intuition alone.
Caesars Entertainment is an example of a company using big data to improve its spending on health insurance. The company analyzes patterns in its employees' health insurance claims. They track variables such as the usage of particular medical services, the degree to which employees and their dependents use name-brand instead of generic drugs, and the number of emergency room visits (especially costly, at an average $1,200 for an outpatient visit).
Of course, sometimes an expensive procedure is necessary to protect a patient's health or life. But in the case of emergency rooms, patients sometimes use these facilities for nonemergency conditions that could be treated elsewhere at a far lower cost. A visit to an urgent-care center, for example, costs around $100 to $200. So when Caesars' analysis showed that employees of its Harrah's property in Philadelphia were far more likely to visit hospital emergency rooms than employees company-wide, it investigated.
The data showed that the Philadelphia workers and dependents sought immediate care at urgent-care centers only 11% of the time, versus 34% company-wide. The cost of that care would be far less if more of those Harrah's workers would choose urgent-care centers instead of emergency rooms. So Harrah's conducted an information campaign to remind employees of the high cost of ER visits and to provide them with a list of alternative facilities. Two years later, the use of urgent-care facilities had risen from 11% of emergencies to 17%, and employees were less likely to make multiple trips to the emergency room. Overall, since Caesars started monitoring the data about emergency room use, it has reduced the number of visits by 10,000, and the use of less expensive facilities has cut health care spending by $4.5 million. That kind of savings should translate into lower premiums for health benefits.
Given that the insurance company and employees are the ones paying the bills for emergency room visits, how does encouraging employees to use lower-cost facilities help Caesars reduce its costs
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Fundamentals of Human Resource Management 6th Edition by Raymond Noe, John Hollenbeck, Barry Gerhart,Patrick Wright
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