Investment Firm Uses Healthcare Provider Data for Evaluation of the US Traumatic Brain Injury Market
The Client’s Business Need
This case study illustrates the use of US health insurance payer data to assist with investment decision making.
An institutional investor contacted Rowinski Group regarding a potential investment in a Seattle, Washington- based company. The company was developing a product line of non-invasive systems to diagnosis and to monitor the regression or progression of the Traumatic Brian Injury (TBI) following testing and treatments. Diagnosis and monitoring is possible because the company’s system can be used over the entire TBI spectrum. There was a portable system for use in memory centers and sporting events. For moderate care intensive sites of service, such as the skilled nursing facility, a mid-range system was available. For the most care intensive site of service, the hospital neurology ward and the neurocritical care unit, a high-end system is under development.
The client’s business need was for Rowinski Group to help them with their investment due diligence. To do this they asked us to provide them with 1) based on several different diagnostic TBI tests stratify the procedure volume data for mild, moderate and severe TBI, and 2) the TBI patient discharge volume from U.S. hospitals and emergency departments.
Our Approach
To determine the TBI diagnostic procedure data and the TBI patient discharge volume, we first spend time to identify relevant sources from U.S. commercial and public health insurance databases and confidential third-party reports. The investment in time was large because of we had to review both commercial and public health databases and reports.
Once we identified the most relevant payer databases and third-party reports, we developed and back tested the algorithms to query, extract, stratify and consolidate the TBI diagnostic test procedure and patient discharge data from the variety of databases.
We consider US health insurance payer databases to be of high value for the following reasons,
- The data is actual and is not forecasted nor an aggregate of forecasts.
- The data is current.
- The data is customizable.
- The data allows us to conduct historical analysis for trending purposes.
- The data is available for multiple healthcare providers such as the physician, the emergency department, the hospital and the physician office.
- The data is derived from reputable sources such as United Healthcare, Humana and Medicare.
The Results
Our customized market analysis using US health insurance payer data determined the TBI diagnostic procedure volume data was larger than the institutional investor had forecasted. In addition the hospital vs. the emergency department TBI patient discharge data was materially different than the investors were expecting.
A primary reason for the disparity between our findings and the client’s expectations is a result of the data specificity we can achieve by using health insurance payer and reimbursement data when compared to third party, boilerplate-marketing reports, which the client was using.
We used actual, not forecasted, data and from multiple sites of care; not one site of care. This type of data specificity is not possible with the third party, boilerplate-market reports because these reports use forecasted data, often from one site of care, to calculate their “aggregate forecasts”.
To further enhance our data specificity, we conducted longitudinal analysis, which allows us to follow patients as they move between sites of care such as the emergency room and the hospital to the hospital outpatient.
Our high-level of specificity and customized approach to market sizing is cost competitive and uses different research methodologies than the third party, boilerplate- market reports.
There is no reason for any company, start up to large multinational to settle for anything less.
