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Mitchell Launches Medical Price Index for Auto Casualty Insurers

Leverages Big Data to Track Medical Cost Inflation and Utilization Patterns (May 07, 2012)

SAN DIEGO, CA -- (Marketwire) -- 05/07/12 -- Mitchell, a leading provider of technology, connectivity and information solutions to the Property & Casualty claims and Collision Repair industries, today introduced a unique data source to track medical cost inflation and treatment utilization trends impacting the auto casualty market. Prepared by Mitchell's new Risk and Performance Optimization (RPO) Unit, the Medical Price Index ("MPI") is among the first regularly updated census of provider billing and treatment behavior as it relates to medical bills from auto casualty claims in the United States.

The MPI provides measures of cost per procedure and service utilization rates on a monthly basis -- across geography, provider specialty, treatment and diagnosis groups, and facility types, and is available on a subscription basis with quarterly updates. Over five years of historical data are currently available.

Mitchell RPO Vice President Keith Peterson states, "Cost inflation rates in auto casualty claims are close to 10% per annum; outpacing the consumer price index and 20% higher than other measures of general medical inflation. It appears auto casualty insurers bear the brunt of cost shifting of medical treatment through over utilization and not the cost of individual procedures (see Figure 1)." The MPI provides a method to track medical procedures costs, utilization and how they are impacted by a range of regulatory, economic, and social factors.

The RPO Unit was launched in March 2012 to conduct deep analysis of claims data processed through Mitchell's casualty and auto physical damage businesses. The MPI embodies RPO's mission of delivering analytics-based automation through Mitchell's core software platforms to help claims operations resolve claims faster, mitigate fraud, waste and abuse and maximize policy holder's claim experience.

Mitchell's Senior Claims Consultant for auto casualty, Dr. Ed Olsen, adds, "Legislators frequently use state fee schedules to manage costs. However, most medical fee schedules do not address utilization and there are relatively few measures available to separate unit costs from utilization impact." As showcased in Figure 2, unit charges are growing at a rate less than the National CPI, as reported by the Bureau of Labor Statistics, for medical care in all regions except for the Mid-West. The regions demonstrating this slower unit charge growth rate include States with well-established medical fee schedules. The Mid-West region, with its outsized unit charge rise, is primarily the effect of unlimited Michigan PIP and its lack of a medical fee schedule. By contrast, Figure 3 highlights the Florida experience where the medical fee schedule decreased the average allowed amount per unit by 22% -- but provider behavior increased the number of units per claimant by 42%. The net effect was an overall increase of 12% in the average allowed amount per claimant in Florida PIP claims.

The RPO Unit helps Mitchell apply new analytics, data warehousing, and consulting resources to the complex claims management challenges facing its U.S. clients. The RPO Unit is based at Mitchell's San Diego Headquarters office and draws on Mitchell's wealth of industry, workflow automation and data management expertise.

About Mitchell
Mitchell empowers clients to achieve measurably better outcomes. Providing unparalleled breadth of technology, connectivity and information solutions to the Property & Casualty claims and Collision Repair industries, Mitchell is uniquely able to simplify and accelerate the claims management and collision repair processes.

As a leading provider of Property & Casualty claims technology solutions, Mitchell processes over 50 million transactions annually for over 300 insurance companies/claims payers and over 30,000 collision repair facilities throughout North America. Founded in 1946, Mitchell is headquartered in San Diego, California, and has 1,700 employees. The company is privately owned primarily by the Aurora Capital Group, a Los Angeles-based investment group. For more information about Mitchell, visit

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Related Keywords: Medical Cost Inflation, treatment utilization, auto casualty, medical bills, claims management, USA, Marketwire, , Other,

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