Use 360-Degree Data along with Predictive Analytics to Leverage Data into Sustainable Solutions.

1. ACTIONABLE INSIGHTS
THE PURPLE DATA CONSULTING GROUP
FLAVIO MOTA

2. EXECUTIVE SUMMARY
• Actionable Insights about Excessive Medicare Expenditures
• Cost Reduction Opportunities
• Limitations of the Data Analyses, Further Opportunities
• Conclusion

3. EXPENDITURES HAVE INCREASED AT
AN ALARMING RATE
 Costs are Increasing at an Alarming Rate
 2013, 2014, and 2015 had Large
Increases
 This Insight Warrants Further Investigation
 Implement Procedures to Reduce
Expenses
 Create Sustainable Solutions
 Use Data Analysis to Solve the Problem

4. THE DATA REVEALS OPPORTUNITY FOR
COST MANAGEMENT
• The Outliers (Extreme Observations)
• Not Evenly distributed
• Cone Shaped Pattern (Red Flag)
• Wide Range of Distances from Red Line,
Red Flag
• Investigation of the Outliers is Required
• Expense Predictors (X Variables)
• Research the Outliers
• Possible Fraud or Mismanagement
• Use this Actionable insight
• Launch Cost Control Measures

5. MORE SIGNS OF
TROUBLE
• Pattern of Outliers Signals Trouble
• Measuring the Predictors against Expenses
• Two Large Misplaced Tails (Right and Left)
• Outliers are not Evenly Distributed
• Possible Mismanagement or Fraud
• Conduct Research
• Stricter Due Diligence Requirements for Payments
• Provide more Training to Plan Administrators
• Leverage Business Intelligence
• Monitor Activity in Real Time

6. MORE EVIDENCE OF PROBABLE
MISMANAGEMENT
• Graph of Residuals is a Red Flag
• Cone Shaped Pattern
• Residuals are unevenly Distributed
• Heavy Cluster on the Left Side Suggests a Pattern
• Further Analyses will Probably Reveal Valuable
Insights
• 360-Degree Data is Needed
• Industry Research
• Similar Industries Need to be Compared to the Case at
Hand
• All Available Information Needs to be Considered

7. THE STRONGEST
CULPRITS
• The Biggest Predictors of Expenses
• Time
• Name Brand Prescription Medicine
• The Problem is Getting Worse Over Time
• Prescription Medications Greatly Predict
Expenditures
• Correlation does not Prove Causation
• Investigation is Still Warranted

8. CONCLUSION
• Limitations
• Only a Few Regression Methods were Used
• Data was Limited to One Data Set
• Further Investigation is Needed
• Industry Benchmarks are Needed
• Actionable Insights—Recommendations
• Use 360-Degree Data (all Available Sources)
• Gather more Data
• Use other Statistical Methods
• Investigate Spending on Name Brand Medication