Download - Medicare Cost Analysis
Medicare Cost Analysis
Group 8
Ganesh, Rafael, Zhuang
Outline
• Introduction
• Business Objectives
• Exploratory Analysis
• Unsupervised Learning
• Supervised Learning
• Predictive Modeling
• Recommendations
Part OneIntroduction01
What’s Medicare?
• Medicare is the federal health insurance program for people who are 65 or older and certain younger people with disabilities
2013 Medicare Facts
• Accounted for 14% of the federal budget • Represented 20% of total national health spending • Covered 54 million beneficiaries• Benefit payments totaled $583 billion
Source: Kaiser Family Foundation - https://kaiserfamilyfoundation.files.wordpress.com/2014/07/7305-08-the-facts-on-medicare-spending-and-financing.pdf
• Submitting false statements• Billing for services or supplies not furnished• Billing for services not medically necessary
Sources of Medicare Fraud and Abuse
Business Objectives
Finding similarities among medical procedures (Clustering)
Discovering consistency among charges (Classification – Decision Tree & Logistic Regression) m
Predicting cost of a procedure in a given state (Predictive Modeling)
Data Description
Hospital Data
3 million rows
Columns- State- Procedure- Cost ……
Medicare Provider Data
9 million rows
Columns- Demographics- Specialty- Patient Distribution ……
Part TwoExploratory Analysis02
Average Medicare Payments$1,068
$281$218
Submitted Allowed Actual Payment
Med
icar
e Pa
ymen
t
Most Frequent ProceduresFr
eque
ncy
Avg.
Med
icar
e Pa
ymen
t Per
Pro
cedu
re
- Broken Ankle- Broken thigh- Correction of Bunion
- Removal of plaque and insertion of stent- Transplantation of donor heart
Costliest ProceduresFr
eque
ncy
Avg.
Med
icar
e Pa
ymen
t Per
Pro
cedu
re
- Removal of plaque and insertion of stent- Transplantation of donor heart- Transplantation of donor liver
State wise Procedure Frequency
State wise Procedure Payment
Part ThreeData Analysis03
Unsupervised Learning – Clustering
• Best Clustering - 3 Clusters
• Important attributes: - Average cost - Patient age - Patient race - Disease type - Provider type
Unsupervised Learning – Clustering
• Business question: Are costs of different procedures in different states consistent with the national average?
• Input: - State - Procedure - Average Cost - Number of Services
Supervised Learning – Decision Tree & Logistic Regression
Decision Tree - Result
Procedure: AnestheticNo. of Services: >369,366
Decision Tree - Result
Procedure: Surgical TreatmentsDrug Administration: N
Decision Tree - Result
Procedure: Removal of Leg Plaque, Balloon Dilation…No. of Providers: < 4No. of Services: < 400
Decision Tree - Result
Procedure: Cardiac Surgeries No. of Providers: < 4No. of Services: < 400
• Business question: How much will a procedure cost in a given state?
Predictive Modeling – Linear Regression
Linear Regression Coefficients
• Business question: How much will a procedure cost in a given state?
• Higher the number of services, lower the expected cost• Higher the number of providers, lower the expected cost• Procedures without drug have higher expected cost than the ones with drug
administration
Predictive Modeling – Linear Regression
Recommendations
RecommendationsAddressing procedure cost differential between states: Increase physician enrollment in states with lower representation to increase competitiveness of physician availability.
RecommendationsAddressing potentially improper billing of commonly “abused” procedures: Institute more stringent rules for procedures known to be most common and expensive via expanded review edits.
Costly and Frequent Procedures:- Plaque removal in leg artery- Balloon Dilation- Surgery equipped with Endoscopy