Modeling Approach and BackgroundTruRisk is a Limited Liability Company founded in early 1998 by Greg Binns, Ph.D. and Mark S. Blumberg, M.D. Their professional collaboration on risk adjusted studies for Life and Long-Term disability products added value to predictive power by including person level medical claims. Today, TruRisk is fortunate to have recruited employees that have decades of experience working with healthcare related medical data. The major objective of TruRisk has been to develop and apply risk forecast models to improve premium rate setting for health insurer offerings. We recognize that dollar costs of past claims are the "experience" used by health insurers and that this valuable information must be included in models intended to forecast future costs as a basis for setting premiums. TruRisk also believes that models developed specifically for a given client's book of business will be superior to general purpose (off-the-shelf) models. Clients differ in their premium pricing cycle, their databases and benefit packages as well as in the health status of their enrollees. While developing a forecast model customized for a given client may initially require a little more time and effort than simply using a model off-the-shelf, there are number of features of the TruRisk approach which facilitate this modeling. We have a large library of TruRisk developed predictor variables which include groups diagnostic, demographic, financial information and TruRisk experience variables. The selection of variables and their weights is mostly empirically driven. Coding is based on system wide experience and proven definitions within the healthcare industry. TruRisk uses this information to further enhance fields necessary for use in reporting and modeling thus avoiding the use of physician and other opinions. Some TruRisk innovations have been awarded US patents:
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