laboratory testing

When we talk about alcohol abuse and misuse, we can’t help but talk about the impact on mortality and a life insurer’s bottom line.

Traditionally, insurers have primarily relied on applicant self-admission, the MIB, motor vehicle reports (MVRs), and the occasional APS “surprise” to identify potential alcohol-related risks. But how effective are these tools?

Alcohol use by the numbers

alcohol on shelf

According to the National Institute of Alcohol Abuse and Alcoholism, an estimated 88,000 deaths annually are attributed to excess alcohol consumption (62,000 men/26,000 women). This is the third leading preventable cause of death, only behind tobacco and poor diet/physical inactivity. In 2015, nearly 27 percent of people ages 18+ reported they engaged in binge drinking in the past month, while seven percent engaged in heavy alcohol use. The National Council on Alcohol and Drug Dependency estimates close to 15 million full-time workers are heavy drinkers. Furthermore, approximately three-quarters of the economic cost of alcohol abuse is related to binge drinking.

Underwriting the drinkers

Some insurers may wonder if traditional underwriting tools are sufficient to identify potential alcohol abusers. A cost-effective test to identify and properly price alcohol risk is the blood alcohol concentration (BAC) assay. Simply adding this to your testing profile provides blood alcohol values and an indication of your applicant’s recent alcohol intake.  

In a 2018 analysis of ExamOne applicants, alcohol screening had a positivity rate of less than one percent. This is lower than marijuana and amphetamines, but higher than cocaine, methamphetamines and morphine. A person who screens positive at the time of their exam has a blood alcohol concentration level above 10 mg/dL, and most likely would have been drinking within five hours or less of the blood draw. Given that paramedical exams are typically scheduled well in advance and are most often performed during business hours on a weekday, or early in the day on Saturday, a BAC elevation at the time of collection can be strongly suggestive of problem drinking. On a more important note for insurers, individuals who have an elevated BAC level tend to have the same mortality rate as applicants who fall in our Risk IQ 99 percentile (nearly 10X median risk).

life insurance blood alcohol concentration positivity

Next steps

Many ExamOne clients have started screening all applicants and believe that the savings in accidental death claims more than cover the cost of the testing. Depending on face amount distributions, detection of a single case declinable on the basis of BAC may provide expected mortality savings more than equal to the cost of many months of blanket testing. If you are interested in adding this test to complement or enhance your current underwriting tools, please contact your Strategic Account Manager. 

Historical laboratory data is of unique importance to insurers because it provides a retrospective view of an applicant’s health. Insights from our LabPiQture report can help insurers build a longitudinal history of an individual’s last seven years.

historical laboratory data

Brian Lanzrath, our Director of Analytics and LabPiQture expert, answers some of the commonly asked questions we receive from our clients. 

Interpreting the number of encounters and hit rates in our data

Q. How far back does your database pull results?
Our database pulls up to seven years of historical laboratory data, and we are continually working to expand our data sources. Recently, we incorporated LabCorp data into our LabPiQture results.

Q. How many encounters are detected through LabPiQture?  
It’s important to remember that not all life insurance applicants have had a clinical testing encounter within the FCRA-mandated seven-year lookback period. By our best estimates, 75%-85% of the all-ages life insurance population has had an encounter in the past seven years.

More specifically, we estimate that only around 40% of males 18-29 have had laboratory testing performed in the past seven years. However, this increases to ~60% for ages 30-39, ~70% for ages 40-49, ~77% for ages 50-59 and up to 84% for ages 60+.

Our studies also show that close to 90% of women across all age groups have had laboratory testing performed in the past seven years.

Of course, not all encounters are captured in our product as it exists today. Conditional on a laboratory test having been performed in the last seven years, there is roughly a 60-70% chance that it will be present in our data.

Q. What is the current LabPiQture hit rate?
The all-ages raw hit rate is 53%. The residual 47% includes both applicants who have not been tested clinically within the previous seven years, and tested individuals who are not present in our data. Hit rates are positively correlated with age and female gender, with men under 30 exhibiting by far the lowest rates. There are individual regions (including D.C., New Jersey, Arizona, and Connecticut) where our hit rates exceed 70%.

Top diagnoses and doctor account specialties

Q. What are the most common diagnoses reported through LabPiQture?
The table below shows the top ICD-10 codes and the percentage of applicants that had this ICD code in their LabPiQture report. As users gain experience with the ICD system, and the subset of medical conditions most often diagnosed/managed though laboratory testing, more nuanced interpretations of the broad categories below tend to become routine.

For instance, Z01 hypothetically includes any specialist checkup – anything from a dental cleaning, to a vision exam, to a hearing test. In practice, though, few of these encounters prompt laboratory testing. OBGYN checkups, by contrast, routinely generate tissue pathology data in the form of Pap smears – and indeed, 90% of LabPiQture Z01 codes are associated with Pap and HPV results. Z11 (“Encounter for screening for infectious/parasitic diseases”) is similarly broad in principle and would historically have been associated with conditions as wide-ranging as tuberculosis and hookworm. In practice, though, for modern populations this almost always indicates STD (including HIV and HCV) testing.

You can find a list of the top five diagnoses codes among females and males here.

Q. What are some the leading account doctor specialties?
Below is a list of our top 25 specialties. Drug rehab (#10) is of particular note. As recently as five years ago, this specialty was not in the top 25. In fact, it was only barely in the top 50. The greater prominence of this specialty reflects both the demand-side effects of the opioid epidemic, supply-side changes in mandates for health plans to cover many forms of drug treatment.

Learn more about LabPiQture and how you can leverage it in your underwriting process

For more information on LabPiQture and the data included in this report, you can access a link to our previously recorded webinar.

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