Patent ID: 7392201

Claim:
A computer-implemented process for developing models for forecasting future person-level health care costs for use in underwriting health insurance comprising the steps of: storing in a computer readable memory historical health care claims data and enrollment data for a plurality of people for each of a base period and a next period separated by a lag period, where the person-level health care claims data comprise at least a claim code and a claim amount; programming a computer processor associated the computer readable memory with risk factor definitions that assign risk factors; processing with the programmed computer processor the base period health care claims data and enrollment data to for each of the plurality of people to assign at least one claim based risk factor from the base period claim codes and at least one enrollment based risk factor from the base period enrollment data; storing the risk factors assigned to each of the plurality of people in the computer readable memory; programming a computer processor associated with the computer readable memory with at least one interaction capturing technique; processing with the programmed computer processor the risk factors assigned to the plurality of people with the interaction capturing technique to determine the ability of individual risk factors and combinations of risk factors to forecast the health care costs associated with the plurality of people in the next period; storing the determined abilities in the computer readable memory; programming a computer processor associated with the computer readable memory to select a plurality of risk factors having the greatest ability to forecast next period person-level health care costs; storing the selected risk factors; and processing with the computer processor selected risk factors to generate a model comprising a combination of the selected base period risk factors and the associated logical and mathematical operations that when applied to those risk factors predicts person-level health care costs in the next period.