Wakely Risk Insight (WRI)

Understanding Profitability in the Individual and Small Group (ACA) Markets

It is impossible to manage what you cannot measure, and measuring performance in the risk adjusted environment is now more challenging than ever. We used to be able to look at drivers of cost in order to gain insight into the experience. In a risk adjusted environment – drivers of profitability can be counter intuitive, for example the older, sicker, and costlier individuals may actually be improving the financial performance of the plan than vice versa. 

Wakely Risk Insight (WRI) performs two key functions. It allocates important financial items such as risk adjustment transfers, fees and taxes, etc. at the member level. Secondly, it applies a sophisticated slicing and measuring algorithm to isolate drivers of profitability for further analysis. 


The reporting includes:

  • Information from public data sources on state and carrier profitability and competitive positioning
  • Analyzing and comparing profitability of your organization by:
    • Demographics
    • Metallic tier
    • Hierarchical Condition Categories (HCCs)
    • New vs. existing enrollees
    • On/off exchange
    • Claim cost deciles and quartiles
    • Rating area
    • Renewal quarter or partial enrollment
  • Regional benchmarks that include:
    • High level utilization and unit cost by service categories
    • Impact of supplemental diagnosis codes (from chart reviews) for your organization vs. sampled average
    • Utilization of specialty/high-cost drugs for your organization vs. sampled average
    • Prevalence and net income by each individual HCC for your organization vs. sampled average
  • New in 2020: COVID related exhibits, including:
    • Prevalence in population, including testing
    • Stratification of cases by severity (including hospitalization, days of stay, ICU/ventilator usage)
    • Utilization and unit costs
    • Year-over-year comparison to detect potentially deferred care
    • Specific drug usage (e.g. Remdesivir)
    • Comparisons and benchmarks (once enough data is available)

Allocation and Segmentation

One of the keys of WRI is the allocation of key financial amounts (e.g. taxes, fees, risk adjustment transfers, other adjustments) at the member level. The member-level file with allocated amounts is available to the client as well. Once amounts are allocated, a sophisticated algorithm similar to a decision tree searches through various member segments to calculate their relative importance in driving plan profitability. In this manner the key drivers of profitability are revealed and can be monitored over time. 


Informed by Unique Data Assets

Wakely has unique data assets including one with over ten million ACA lives. We have crafted key regional benchmarks that are included in the WRI exhibits for useful comparisons. 

Analyzing Drivers of Profitability

In the WRI analytics, we examine a number of hypothesis to see if there are any obvious drivers of profitability for a given health plan. The standard set that we test includes demographics, metallic tiers, medical conditions or HCCs, rating area, quartiles of cost, etc. In addition, we have the flexibility to test client-specific inputs such as profitability by acquisition channel, providers, hospital networks, etc. 

Understanding and Adapting to Change


WRI is not static. We constantly curate the exhibits to make them relevant, useful, and effective. For example, in 2020 we are adding new exhibits related to COVID. There are also important regulatory changes (e.g. state-based reinsurance programs) that have important financial implications for sections of the ACA population.  

Next Step

For more information on WRI or to schedule a discussion/demonstration, please contact us at Products@Wakely.com.