Frequency vs severity

A group-health policy is two cost problems wearing one premium. Many small claims and a few large ones can both add up to a substantial bill. This page reads Loop's broker book on both axes at once: how often a category appears, measured as its share of all claim records, and what each claim costs, measured as the average incurred per claim. Incurred is the amount recorded against the claim — not the amount the hospital billed, and not a measure of what a household paid.

Read on either axis alone and the book misleads. The most-filed category on this book averages ₹2,910 a claim. The category with the highest average of the ten is the least-filed of them.

The 10% of claims with the highest costs account for 47.6% of claim costs#

Rank claims by their recorded cost, from highest to lowest. The first 10% account for 47.6% of all costs.

The 50% of claims with the lowest recorded costs account for 6.9% of total costs.

This shape is not peculiar to Loop, though the published comparisons count people where this table counts claim records — one person can have several claims here but is counted once in those studies.

Concentration uses all claim records, including zero-incurred claims and amounts treated as zero when missing or invalid. It measures shares of claims, not members or admissions. Each threshold uses the first whole claim that reaches it. Methodology.

The ten categories split three ways: common and cheap, common and costly, rare and costly#

Crossing claim share against average cost sorts the categories into groups that behave differently.

The groups are a cut rule, not a property of the disease. Common means a category holds at least 5% of all claims. High cost means its average exceeds ₹43,129, the average incurred per claim across the whole book. Both lines are conventions, and two categories sit close enough to matter — more on that below.

These ten are the nine largest categories by incurred-cost share, plus general health services, which is the most-filed category on the book and sixteenth by incurred-cost share. Together they are 72.9% of claims and 71.9% of incurred cost, not the whole book; the rest sits in smaller keyword buckets and in claims the classifier could not place. No category among these ten is both rare and low-average — which is a property of a table built from the largest cost-share lines and the most-filed one, not a finding about the categories left out. Those are not assessed here.

Cardiac is the clearest case for reading both axes at once. It has the highest average of these ten at ₹1,09,946 and the smallest claim share at 3.3%, while ranking fourth by incurred-cost share. A high average does not make cardiac the largest category by share. For context from outside this book: Global Burden of Disease estimates reported in a 2016 review put India's age-standardised cardiovascular death rate at 272 per 100,000 against a global average of 235 (Prabhakaran, Jeemon & Roy, Circulation, 2016) — population mortality, not a severity grade for a claims category.

Categories are first-match documentation labels, not clinical diagnoses or severity grades. Their average cost is not a typical claim amount; the distributions have long tails. Combined shares use unrounded figures, so they can differ from the sum of displayed rows.

Common categories have lower averages; rare categories have higher averages#

These three groups are the ten tabled categories and nothing else: the 27.1% of claims and 28.1% of incurred outside the table belong to none of them.

Half of all claims fall in the common, low-average group, while about one claim in eight falls in the rare, high-average group. The first pattern combines higher volume with a lower average; the second combines a higher average with lower volume. The gap between the averages is 2.6× — ₹73,688 against ₹28,337.

That is the whole argument for reading the book twice. Looking only at claim frequency can draw attention away from the rare, high-average group. The third group needs attention on both measures: musculoskeletal injury and gastrointestinal claims are common and have higher averages, at ₹74,287 per claim on 10.9% of claims.

Two categories sit within ₹350 of the ₹43,129 line between the two cost groups#

Most categories are clearly one thing or the other. Two are not. Maternity averages ₹42,816 and genitourinary and kidney claims average ₹42,952 — ₹313 and ₹177 below the ₹43,129 cut respectively. A small change in the cut point moves both across it. The displayed averages round to the rupee, so these are real distances; they are just short ones, and neither category sits in the low-cost group the way general health services does at ₹2,910.

Maternity gives this boundary a practical importance. It is 10.6% of all claims and 10.5% of incurred cost. Pregnancy can allow time to arrange care in advance, although delivery or complications may not follow the plan. The Maternity and Delivery page takes delivery type, deductions and newborn claims apart; this page only places the line on the map.

Parents and in-laws account for a larger share of eye and cataract spending (71.5%) than of cardiac spending (67.2%)#

The household layers — employee, spouse, child, parent or in-law — are not spread evenly across categories. But they do not line up with cost the way the groups might suggest.

Eye and cataract is the most parent-concentrated category in this table — more so than cardiac — and it sits in the common, low-cost group at ₹32,772 a claim. The parent and in-law layer leads two of the rare, expensive categories and two of the common, cheap ones. A parent-led category can therefore sit on either side of the average-cost line. Employee claims lead both common, high-cost categories, and spouse claims lead maternity at 76.4%.

Shares here are shares of each category's incurred cost, not of its claim count; the two differ. Cardiac's parent layer accounts for 67.2% of the category's incurred cost. The household structure across the whole book — how the layers divide claims and incurred cost overall — belongs to Family Claims, and a category share and a book-wide share are different measures that should not be averaged together.

The count ranking and the incurred-cost-share ranking are different lists#

The most common mistake in reading a claims book is to rank categories by how often they appear and call the top of that list the cost problem. On this book the top of the count list is general health services, at ₹2,910 a claim and 1.1% of incurred cost — the lowest average on the page. Musculoskeletal injury has the largest incurred-cost share, 10.7%, and is only seventh by count. Cardiac carries the highest average of the ten categories tabled here and is not among the ten most frequent categories at all.

The two rankings are set out one each on the Top Categories by Frequency and Top Categories by Incurred pages. The matrix exists to stop the count from masquerading as the cost.

Open questions for WHI 2027#