The tri-state organization of the Delta Dental Plan of Michigan, the
Delta Dental Plan of Ohio, and the Delta Dental Plan of Indiana
administrates dental benefits for 3.5 million subscribers in almost
3,700 groups ranging in size from 10 subscribers to a half million.
Last year 6 million claims for dental treatment were processed andpaid.
It is easy to imagine that processing an average of 115,000 claims per
week (referred to as the inventory) is a difficult task.
Shear volume alone, however, is not the only challenge, there are
several other factors which make claim processing difficult.
Among these is the random variation in the size of the inventory due
to the randomness of the inventory generator, i. e. the process by
which an individual subscriber determines when to submit a claim.
Superimposed on this short term variation are seasonal variations.
Consider for example the fact that yearly policy maximum's are reset
on January 1 each year --- with a corresponding increase in the number
of claims submitted during that month.
Adding to this background of variations, is a general increase in the
number of subscribers, due both to the growth of individual employee
groups and to a continuing addition of new employee groups.
The combined effect last year was in increase in the number of
subscribers of over 344,000.
The project will be to construct a model of the inventory generator
driven by statistical inventory history, projected individual employee
group growth, and the actual and projected new employer group
The model output should be a weekly inventory projection for the next
The ideal completed project deliverable would be computer program in
a modern portable language that implements the model.
It is highly desirable that the model and program be well documentedand
constructed so that the model and the program can be modified to reflect
changes in the health care industry.
This summary prepared with the assistance of E. Kiernanof Delta Dental.