Title: What works?
Healthcare actuaries are increasingly responsible for advising their employers and clients in areas of managed care. Managed care links traditional health actuarial financial work to areas of medical practice, to address the fundamental question: what works? These relatively new responsibilities have required an expansion of actuarial techniques into non-traditional areas, and, in particular, epidemiology and biostatistics.
Our study is about a specific area of statistics, survival analysis, of great potential application in non-traditional managed care practice. We illustrate with two applications of survival models to solve real-world problems in areas of health actuarial practice: the estimation of survival of permanently disabled workers receiving lifetime benefits for occupational illness and injury and the prediction, using a model incorporating drug dosage information, of the expected future lifetime of hospice patients.
Both case studies are examples of practical models that can be applied within a business context. They will serve a more important purpose, if they show health actuaries the potential value of the application of an external technique within their evolving practice.
Mr. Duncan is Adjunct Professor of Actuarial Statistics at the University of California Santa Barbara, president of Santa Barbara Actuaries Inc. and chair of the Vitality Group Actuarial Committee. Mr. Duncan holds degrees in Mathematics and Economics from Natal University and Balliol College, Oxford and is completing a PhD at Heriot-Watt University, Edinburgh. He is a fellow of the Society of Actuaries, the Institute of Actuaries, the Conference of Consulting Actuaries and the Canadian Institute of Actuaries, a Certified Specialist in Predictive Analytics (CAS) and a Member of the American Academy of Actuaries. He is active in public policy and healthcare reform, and served on the board of directors of the Commonwealth of Massachusetts Health Insurance Connector Authority from 2007-2014. He was also a member of the board of the Society of Actuaries (2012-5). He is the author of numerous peer-reviewed papers, and several books and book chapters. His latest book, a second edition of “Healthcare Risk Adjustment and Predictive Modeling” (Actex Publications) was published in May 2018.