It’s human nature to go with what we know and to resist change. This is especially true in the health care industry. It may not transform in the next year or five years, but it is unmistakably shifting to keep up with the times. Technology and an abundance of data continue to change health care delivery and management, and actuaries are well equipped to help health care organizations adapt—and thrive—in the midst of this change.
As hospitals and health care providers adopt value-based care, they take on more risk. It’s widely known that analytics are essential to understanding and managing those risks, but, while artificial intelligence (AI) and machine learning are efficient analytics tools, successful risk mitigation is more demanding. To make these automation technologies truly effective, these hospitals and health care providers are finding the need for actuaries who can interpret data and trends, and creatively spot disruptions. Actuaries have a depth of insight that machines—and other types of data analysts—can’t replicate.
Here’s an example: Recently, while reviewing an automated model, I noticed an unexpected change in some months of data, so I dug into the trend. It turned out that the basis for the data had changed from one month to the next. No automated algorithm was going to catch and address that anomaly. But to an actuary who has spent an entire career staring at thousands of models and data patterns, incongruities became apparent.
Identifying data incongruities can significantly reduce risks for health care companies. Actuaries can help minimize patients’ readmissions resulting from inadequate care. They can indicate a patient population’s predisposition for illness. They can do these things because they can interpret information and have the business acumen to use those interpretations to help create organizational or process changes, a critical skill that neither analysts nor artificial intelligence hold.
So, as AI feeds algorithms with data from thousands of inputs throughout health care, actuaries are prepared to turn those predictive models into real-world insights. In other words, actuaries turn data into action.
Actuaries are most often known for their work with insurance companies and government agencies. With this traditional background, they are also well positioned to help advance hospital systems and providers. The new demands placed on the health care industry by value-based care underscore the necessity of smart analytics coupled with experienced actuarial analysis.