Can Data and Analytics Fix US Healthcare?

Can Data and Analytics Fix US Healthcare?

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David Wallace

Algorithms never sleep. They are constantly hard at work, toiling away at the complex intersection of healthcare, insurance and finance.

Predictive models forecast your medical future based on current profile, conditions and medicines. The financial programs grind away to ascertain how much will be paid for by an insurance company, possibly a federal program, by you as the patient and at what rate. 

Models calculate the likelihood of default and how much is owed or reimbursable to the doctor, facility and other parties.

The larger the organization, the more data it can assemble and the more powerful its computing or knowledge power. Optum Inc. contends that 30% of the world’s stored data is generated in healthcare, yet many organizations lack the ability or tools to realize its potential. 

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In just under a decade, the healthcare industry has scaled up from pilot data-collection programs to new industry standards and population-level analysis done by athenahealth, Optum, Philips Wellcentive, Cerner and others. Data that was once siloed is being freed to inform organizations laterally, from operations to marketing, finance to compliance. 

Pharmacy sales data, electronic patient records, personal genome details, doctor billing and related systems all contribute to the big-picture view. 

Data flows improve the patient-provider connection by speeding shared information, says Dr. Rajesh Davda, Cigna’s national medical director. He told an Optum conference audience that accountable care, backed by data, is solving some clinical and patient questions, but that it does not come quickly or cheaply enough.

“We’ve committed to the value-based platform” with accountable care and a large investment in infrastructure, he adds. “A decade ago, providers may not have had powerhouse analytics programs. Now they do. We need to share data back and forth and provide directional exchange.”

There is always the danger of one action creating an opposite reaction, along with other unintended consequences. Experts warn of the dangers of seeking silver-bullet solutions to the multifaceted issues affecting the US healthcare marketplace. 

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More data can actually lead to delays in patient care or systemic failures affecting patient safety. Lack of downtime, interruptions to power supplies or threats from hackers can frustrate frontline caregivers seeking an almighty “single view of the truth.” They may have a toolkit that does not supply useful, actionable details in a timely manner. Or it might open their choices to majority rule based on a database of similar incidents, with severe legal, regulatory or financial implications. 

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Cigna, for example, launched One Guide, an always-available web and telephone resource augmented by analytics data, to help patients. It offers tips and reminders, answers questions and encourages better health habits. 


LaunchPoint Corp. estimates that more than $1 trillion annually is wasted in the healthcare system because of human error, process complexity and changing insurance and eligibility details. Matching claims with payers alone can add 30% to the cost of a claim, if there are errors to be reworked and hours of time spent on billing corrections and resubmissions.

Discovery Health Partners, a division of LaunchPoint, addresses “payment integrity,” an area where problems cost as much as 7% of paid claim dollars every year. That means a 500,000-member health plan, with costs averaging $3,600 per member per year, will pay $1.8 billion in claims, of which up to $126 million is wasted.

“Given that members are changing plans at an ever-increasing rate, there are gaps in patient medical claims history as seen through the lens of any one payer,” argues Steve Forcash, LaunchPoint vice president for analytics. “The data and tools exist to truly disrupt the claims payment process, but many headwinds prevent health plans from going all in on change. Chances are, the vendors that take that risk will end up making an incredible impact on reducing waste in healthcare.”

Over the next 20 years, the US will have a knowledgeable, demanding and lucrative market for healthcare services and products. To succeed, though, companies will need skilled people to deliver services and the kind of coordination that has been missing since the days of the neighborhood house call.

As companies, people and networks shift into and out of markets, one concern is that data will not forecast the future as much as show what went wrong in the past. Experts warn of unreliable data and the need for long-term investments to ensure accuracy.


Data and trend analytics may be useful for directional guidance or setting boundaries, but not for zero-sum actions such as payments, patient care or critical interconnected systems. Industry averages or other comparisons have limited value in financial matters and cannot replace experience and skill in real-time clinical decisions.

“I would be under no illusion that these calculations would be objective,” says Paul Levy, former president and CEO of Boston’s Beth Israel Deaconess Medical Center. “The danger is these analyses will all give the illusion of precision, but [these] assumptions will be a black box with human judgments.”

The origin, reliability and usability of data is unknown, which invariably raises questions, Levy notes. Which data is shared? Which data set is best? How do you identify assumptions or flaws? Data is a raw material for searching, he says, not a set of answers that can be used as a proof point.

Hospitals and doctors are evolving their practice of medical care while coping with the turmoil of insurers entering and leaving markets, changing coverage levels, pricing and other externalities, says David Wildebrandt, a Florida-based managing director at Berkeley Research Group and former hospital CEO.

“We’ve had a department store model of inpatient care,” he says. “You go to the hospital and seek treatment. But care has gotten more customized, more ambulatory, more personal and patient centric. The payment models are struggling to change.” 

The data jigsaw puzzle relies heavily on in-network systems. Patients may have incomplete profiles if they visit independent urgent care centers and out-of-network specialists. Those holes create knowledge gaps.

Patient research, ratings and rankings now permit healthcare customers to evaluate and report their experiences quickly and globally. Wearable technologies have provided more data, but not more context. Conveniences such as mail-order pharmacies, web-based consultations and global competition for patients are new, competitive challenges.

Organizations should keep a watchful eye on trend lines. Baby boomers will need more healthcare services as that mass generation moves through retirement to old age. 


Wellness education, disease tracking and rapid response are some of the medical care components that benefit from the global scale and the speed of big data. Pattern-recognition software, combined with notifications, is changing medicine top to bottom, from global disease monitoring to patient admissions at local hospitals.

What does the future of healthcare analytics look like? Much depends on the regulatory and reimbursement policies set by government agencies and a doctor or facility that can react quickly to data-driven insights. 

It may resemble Aledade, Inc., which has grown to cover more than 240,000 patients in 15 states. Since 2014, the company has built a platform of Accountable Care Organizations (ACOs) that help medical practices and health plans monitor and improve both quality and costs of care. By using existing electronic records to create alerts when a patient visits a hospital or emergency room, the platform enables sharing of prescription data, patient histories and specialist conditions among local hospitals and health plans. For older, higher-risk patients, this kind of information can be fundamental but difficult to track.

The platform uses technology to prioritize cases and identify risks via scoring, and is designed to improve coordination and efficiency. It emphasizes wellness visits and prevention, ensures chronic care maintenance and closes gaps in timing and care.

Athenahealth estimates that more than 700 ACOs have formed since 2011, generating Medicare savings of roughly $400 million. The ACO model tracks the impact of treatments at the personal level and has built a metric that recognizes the cost savings when a future hospital visit can be avoided by addressing a potential health problem during a wellness visit. 

Whose data will record the number of emergencies that data prevented?

David Wallace consults on content strategy and corporate innovation. He has contributed to Reuters, The New York Times and Knowledge@Wharton and lives near Boston. 

Industry averages or other comparisons have limited value in financial matters and cannot replace experience and skill in real-time clinical decisions.
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