Definition of 'Actuarial Analysis'

The examination of risk by a highly educated and certified professional statistician. Actuarial analysis uses statistical models to manage financial uncertainty by making educated predictions about future events. Insurance companies, banks, government agencies and corporations use actuarial analysis to design optimal insurance policies, retirement plans and pension plans and to analyze investment risks.

Investopedia explains 'Actuarial Analysis'

For example, actuarial analysis is an essential task performed by insurance companies to analyze data and estimate the probability of an insurance claim being filed for a given event. This work allows insurance companies to predict with a reasonable degree of accuracy the amount of claims they will pay out, which helps them determine what premiums they must charge to remain profitable.

Definition of 'Actuarial Assumption'

An actuarial assumption is an estimate of an uncertain variable input into a financial model, normally for the purposes of calculating premiums or benefits. For example, a common actuarial assumption relates to predicting a person's lifespan, given their age, gender, health conditions and other factors. Actuaries use large tables of statistical data which correlate the uncertain variable to a variety of key predictive variables. Given the values for the predictive variables a sound actuarial

assumption can be made for the uncertain variable.

Investopedia explains 'Actuarial Assumption'

Actuarial assumptions are important because they allow for the equitable transfer of risk in many situations. For instance, when underwriting life insurance policies, it is important to understand the probability that the insured might pass away during the policy period. Given an accurate actuarial assumption for this probability, it is easy to calculate a fair premium for such a policy. Without the ability to accurately figure these probabilities, very few people would be willing to provide insurance. If they were, it would have to be more expensive to allow room for unexpected losses.

J Manag Care Pharm. 2007 Apr;13(3):262-72.

Actuarial analysis of private payer administrative claims data for women with endometriosis.
Mirkin D, Murphy-Barron C, Iwasaki K. Source

Milliman, Inc, New York, NY 10119, USA. david.mirkin@milliman.com

Abstract BACKGROUND:

Endometriosis is a painful, chronic disease affecting 5.5 million women and girls in the United States and Canada and millions more worldwide. The usual age range of women diagnosed with endometriosis is 20 to 45 years. Endometriosis has an estimated prevalence of 10% among women of reproductive age, although estimates of prevalence vary greatly. Endometriosis is the most common gynecological cause of chronic pelvic pain, but published information on its associated medical care costs is scarce.

OBJECTIVE:

The aim of this study was to determine (1) the prevalence of endometriosis in the United States, (2) the amount of health care services used by women coded with endometriosis in a commercial medical claims database during 1999 to 2003, and (3) the endometriosis-related costs for 2003, the most recent data available at the time the study was performed.
METHODS:

This study was a retrospective review of administrative data for commercial payers, which included enrollment, eligibility, and claims payment data contained in the Medstat Marketscan database for approximately 4 million commercial insurance members. All claims and membership data were extracted for each woman aged 18 to 55 years who had at least 1 medical or hospital claim with a diagnosis code for endometriosis (International Classification of Diseases, Ninth Revision, Clinical Modification [ICD-9-CM] codes 617.00-617.99) for 1999 through 2003. Claims data from 1999 through 2003 were used to determine prevalence and health care resource utilization (i.e., annual admission rate, annual surgical rate, distribution of endometriosis-related surgeries, and prevalence of comorbid conditions). The cost analysis was based on claims from 2003 only. Cost was defined as the payer-allowed charge, which equals the net payer cost plus member cost share.
RESULTS:

The prevalence of women with medical claims (inpatient and/or outpatient) containing ICD-9CM codes for endometriosis was 1.1% for the age band of 30 to 39 years and 0.7% over the entire age span of 18 to 55 years. The medical costs per patient per month (PPPM) for women with endometriosis were 63% greater ($706 PPPM) than those of the average woman per member per month ($433) in 2003; inpatient hospital costs accounted for 32% of total direct medical costs. Between 1999 and 2003, these women with endometriosis who were identified by either inpatient and/or outpatient claims had high rates of hospital admission (53% for any reason; 38% for an endometriosis-related reason) and a high annual surgical procedure rate (64%). Additionally, women with endometriosis frequently suffered from comorbid conditions, and these conditions were associated with greater PPPM costs of 15% to 50% for women with an endometriosis diagnosis code, depending on the condition. Interstitial cystitis was associated with 50% greater cost ($1,061 PPPM); depression, 41% ($997 PPPM); migraine, 40% ($988 PPPM); irritable bowel syndrome, 34% ($943 PPPM); chronic fatigue syndrome, 29% ($913 PPPM); abdominal pain, 20% ($846 PPPM); and infertility, 15% ($813 PPPM).
CONCLUSIONS:

Women with endometriosis have a high hospital admission rate and surgical procedure rate and a high incidence of comorbid conditions. Consequently, these women incur total medical costs that are, on average, 63% higher than medical costs for the average woman in a commercially insured group.

Canadian Healthcare Fund Analysis and Model

Research StudiesProposal Requests

Canadian Healthcare Fund Analysis and Model

BACKGROUND and PURPOSE It is well known that Canada has a public healthcare system. Part of the overall management activities of this program is periodic review of costs and the responsibility of the federal government to negotiate with the provinces an amount for future funding of the various health programs for the next renewal period. The current funding period will expire in 2014. A credible, objective model to estimate future growth is needed. RESEARCH OBJECTIVE The objective of this research would be to contract with a Canadian researcher or a joint U.S./Canadian team to investigate underlying factors which are critical to Canadian Healthcare and would be useful to the upcoming renewal. Some of the items of interest include: a. A brief comparison of Canadian and U.S Healthcare systems. An introductory comparison of health care funding and freedom of choosing providers in the U.S. and Canada. b. Determining sources for Canadian healthcare data. c. General healthcare cost trends in Canada. d. Historical utilization and projected utilization on a macro-economic basis. e. How much of provincial and federal budgets will projected costs consume, assuming the current tax base is maintained. f. How much the Federal Health Transfer will cover (if the current formula is maintained). g. What human resources will be needed from the total workforce (if current productivity levels and/or progression are maintained for the various health care providers). h. To what health conditions and/or practitioners will most of the future resources be directed. i. Projected amount of funding needed to adequately cover costs for the next negotiated period. Aggregate cost data at a macro-economic level would be needed. Sources for data may include the Canadian Institute of Health Data Base, Statistics Canada, or other reliable sources. The researcher(s) would need to be familiar with the possible sources of health care information. An approximate budget of $20,000 (U.S.) has been established for the project. The researcher(s) is to examine one or more of the above issues and summarize the results in a report made available to SOA membership. Benefits to the selected researcher, the SOA and CIA would include:

Useful information for members related to U.S and Canadian Healthcare Key research on a public policy issue Enhanced image of the actuary Actuarial voice in important public policy issues (in this case, National Canadian Healthcare) Potential for significant promotion and media attention

It is expected that the researcher(s) will work closely with a Project Oversight Group (POG) in meeting the objectives of the project. The researcher(s) will also provide the POG with periodic progress reports. Members of this group will be available to provide feedback and guidance to the researcher(s) as needed. PROPOSAL To facilitate the evaluation of proposals, the following information should also be submitted: A. Identification of the issues the researcher(s) will address in the study. B. Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education, and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted. C. An outline of the approach to be used, emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis, specifically what the Researcher(s) will do with inconclusive or otherwise incomplete survey results. D. Cost estimates for the research. We expect to reach agreement on a fixed cost for this project with the Researcher(s). While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor. E. A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. F. Ideas regarding the form and distribution of the final report, both for immediate release and for permanent reference (e.g., submission to the North American Actuarial Journal or other SOA publication). G. Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed. SELECTION PROCESS The SOA's sponsoring committees are responsible for the selection of the proposal to be funded. Input from other knowledgeable individuals also may be sought, but the sponsoring committees will make the final decision. The SOA's Research Actuary will provide staff actuarial support.

Questions Any questions regarding this RFP should be directed by fax, or e-mail to: Ronora Stryker, SOA Research Actuary (Fax: 847-273-8514; e-mail: rstryker@soa.org). NOTIFICATION OF INTENT TO SUBMIT PROPOSAL If you intend to submit a proposal, please send written notification by November 23, 2011 to:

Jan Schuh SOA Sr. Research Administrator f: 847.273.8556 email: jschuh@soa.org SUBMISSION OF PROPOSAL Please e-mail a copy of the proposal to: Jan Schuh at jschuh@soa.org Proposals must be received no later than December 2, 2011. It is anticipated that all researchers who have submitted proposals will be informed of the status of their proposal no later than December 9, 2011. Note: Proposals are considered confidential and proprietary. CONDITIONS The Society of Actuaries reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available to proceed. The Society of Actuaries also reserves the right to redirect the project as is deemed advisable. The Society of Actuaries intends to copyright and publish the results of this research. The research will be considered work-for-hire and all rights thereto belong to the Society of Actuaries. However, appropriate credit will be given to the Researcher(s).